30 May 2020 - ITR Notified

Income tax update

Income Tax Department  notifiy New ITR Forms for A.Y. 2020-21. 

An additional disclosure of investment made during 01-04-2020 to 30-06-2020 shall be required to be given.   

30 May 2020 News and Updates

30th May 2K20

Economic Times

 

Ø  SoftBank-Bharti JV eyes up to $750 million fund-raise

Ø  NPAs to soar by up to 600 bps in 2 yrs: Fitch

Ø  Projects worth Rs 21 lakh cr at a standstill in red zone

Ø  Q4 GDP growth likely to be at 3.6%: Care Ratings

Ø  China, India soak up oil from floating storage

Ø  Abu Dhabi state fund may invest $1 bn in Jio: Sources

Ø  Government frees exports of Paracetamol APIs

Ø  PNB Housing Finance takes over Vipul Ltd Project after default

Business Standard

 

Ø  US economy shrank at 5% annual rate in Q1, higher than initial estimate

Ø  India's cement production to fall 25-30% in FY21 as Covid-19 saps demand

Ø  Coal supply by Coal India to power sector dips 22% to 32 MT in April

Ø  Patanjali's Rs 250 crore NCD subscribed within three minutes of opening

Ø  Cash-strapped Jet Airways gets four new EoIs in fresh bidding round

Ø  Cairn initiates arbitration against $520 mn govt demand over discrepancies

Business Line

 

Ø  Google in talks to buy stake in Vodafone Idea

Ø  CBDT notifies minimum fee for India based fund managers managing offshore

Ø  Fresh measures for equity market, NBFCs on cards

Ø  Power exchange plans to launch real time market for trading in electricity contracts

 

Mint

Ø  Federal Bank has 35% of its loan book under moratorium

Ø  RBI imposes fines of Rs6.5 crore on three banks

Ø  Ceat Q4 net declines 19% to ₹52 cr

Ø  Franklin Templeton investors send legal notice to Sebi

Ø  Kia Motors announces additional investment of $54 mn in Andhra Pradesh

Financial Express

Ø  FDI in India jumps 13% to record $49.98 billion in 2019-20

Ø  Need to look at building economy with local skills: Suresh Prabhu

Ø  Government seeks $520 million from Cairn Oil & Gas; co slaps arbitration notice

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GST Portal Update:

EVC option has been activated for GSTR-1 return. Now, we can file GSTR-1 and GSTR-3B with EVC option in case of companies also.

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CBDT notifies new Form No. 26AS containing details beyond TDS /TCS pursuant. 

Notification No.30 of 2020

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GST Portal: EVC option has been activated for GSTR-1 return. Now, we can file GSTR-1 and GSTR-3B with EVC option in case of companies also.

Ministry of Corporate Affairs, vide Gazette Notification dated 26th May, 2020, has made the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) eligible to receive contributions from corporate social responsibility (CSR) corpuses of corporates.

Sebi is unlikely to agree to India Inc’s demand of waiving financial results disclosures for the first quarter of this financial year. Industry bodies Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (Ficci) had requested the regulator to relax the norms due to the disruption caused by Covid-19.

DGFT vide Notification No. 07/2015-20 dated 28.05.2020 has removed restriction on the export of Paracetamol API, with immediate effect.

PF Contribution @10% for Salary of May, June & July is Optional. Employer or employee can pay at normal rate of 12% FAQ of EPFO of 20.05.2020. 

Supreme Court has observed that Retirement of one partner amounts to dissolution of partnership firms consisting of only two partners: When there are only two partners and one has agreed to retire, then the retirements amounts to dissolution of the firm.

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👉🏻FM launches facility of Instant PAN through Aadhaar based e-KYC

(The allotment process is paperless and an electronic PAN (e-PAN) is issued to the applicants free of cost)

👇🏻 👇🏻 👇🏻

https://bit.ly/2TOChp4

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👉 If you had to guess a huge multibagger in the past month or so, chances are that a company clambering out of bankruptcy would not have led your list of wealth-builders. But shares of Alok Industries, a bankrupt company taken over by Mukesh Ambani’s Reliance Industries, have more than doubled in the past one month, hitting upper circuits for 17 consecutive times.

On Wednesday, too, the stock gained 5% to Rs 16.87, with more than 20 million buy orders on BSE and NSE. After the restructuring of equity, the stock was listed on February 27 at Rs 14 and declined to a low of Rs 3.92 on March 31. Since then, the stock has rallied 330%.

“Alok Industries, which was in a perpetual bear run, is hitting the upper circuit nowadays,” said Abhishek Karande, senior analyst, Reliance Securities. “It may go up like Ruchi Soya but it is better that retail investors stay away from the counter as they will not find exit so easily.”

A similar kind of rally was seen in another NCLT company, Ruchi Soya. Shares of Ruchi Soya, re-listed on January 27 after consolidation of equity, rallied more than 40 times in just three months valuing the company at Rs 23,500 crore, more than that of Adani Enterprises, Gujarat Gas, Bata India, Voltas, Trent and TVS Motors. However, since May 18, the stock is ending in the lower circuit consistently and has lost 30% to close at Rs 515.60 on Wednesday.

👉 The National Company Law Appellate Tribunal (NCLAT) has set aside the insolvency proceedings at Indu Techzone, providing relief to promoters led by I Syam Prasad Reddy, who is a co-accused in the disproportionate assets case against Andhra Pradesh CM YS Jagan Mohan Reddy.

The tribunal has ordered in favour of the company on the ground that lender IFCI had filed the insolvency petition after missing the deadline as per the Insolvency and Bankruptcy Code.

It allowed Indu Techzone to “function independently through its board of directors with immediate effect”. The May 22 order also provides relief to the Enforcement Directorate, which had attached certain assets of Indu Techzone in the disproportionate assets case and sought to exempt those from the insolvency proceedings.

The firm had approached the NCLAT after the National Company Law Tribunal’s (NCLT’s) Hyderabad bench ordered insolvency proceedings against it in November last year. It argued that the resolution application was barred by limitation — the period within which legal action could be initiated or a right enforced.

The ED had earlier submitted before the NCLT that it had registered a case in August 2011 against Jagan Mohan Reddy and others under the Prevention of Money Laundering Act, wherein Indu Techzone was one of the suspects.

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1.   Form 26AS will now be a complete profile of the taxpayer w.e.f. 01.06.2020

 

CBDT vide Notification dated May 28, 2020 amended Form 26AS in Sec 285BB w.e.f. 01.06.2020. Key takeaways are:

New form 26AS will also provide information in respect of “Specified financial transactions” which include transactions of purchase/ sale of goods, property, services, works contract, investment, expenditure, taking or accepting any loan or deposits of such value as may be prescribed but not less than of Rs 50,000.     

Information about income tax demand, refund, proceedings pending, and proceedings completed which may include assessment, reassessment under section 148,153A 153C, revision, appeal will also be shared in this form 26AS.      

Information on this form 26AS will not be a one-time affair at year end. This will be a live 26AS, as this will be updated regularly within 3 months from the end of the month in which such information is received.       

Form 26AS will now be a complete profile of the taxpayer for that particular year as against earlier form 26AS which just provided the information about taxes paid by way of TDS/TCS or self-assessing.    

This form will also have mobile no, email I’d and Aadhar no. of the taxpayer.      

Further an enabling provision has been notified empowering the CBDT to authorise DG Systems or any other officer to upload in this form, information received from any other officer, authority under any law. Thus any adverse action initiated or taken or found or order passed under any other law such as custom , GST , Benami Law etc. including information about Turnover , import , export etc. will also be put in this form 26AS so that not only the concerned taxpayer but  also all the Income Tax authorities will  know and have access to such information.      

This form 26AS will also provide information received by Tax Deptt from any other country under the treaty /exchange of information about income or assets of the taxpayer located outside India.     

The implication of this new form 26AS will be that banks , financial institutions or any other authority or customer , buyer etc. while carrying out due diligence of the person/ corporate concerned will now ask for form 26AS  so as to be sure that there are not any major issues about such person/corporates.   

This will now make difficult for any taxpayer to hide information from any bank / financial institution/ authority about any proceedings against under any law or tax demand, tax disputes etc.

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👉 The Chennai division bench of the National Company Law Tribunal (NCLT) has cleared the merger of Gurugram based KSS Abhishek Safety Systems with Takata India. The new amalgamated entity will now be called Joyson Anand Abhishek Safety Systems.

As part of the deal, Takata India reduced its equity share from Rs 174.4 crore to Rs 40.4 crore by ‘cancelling and extinguishing’ paid up share capital worth Rs 134 crore which will be set off against accumulated losses of Rs 134 crore. All employees of KSS Ashishek Safety Systems will now become employees of Takata India.

The merger is part of a tri-party joint venture announced in 2019 by auto component major Anand Group.

The tri-party merger involved merging the two joint ventures of Joyson Safety Systems (JSS). JSS' joint venture with Abhishek Group is KSS Abhishek Safety Systems and its JV is with Anand Group is Takata India.

Anand Group will now merge KSSA and Takata India to form a tri-party JV called Joyson Anand Abhishek Safety Systems.When the merger was announced last June, the merged entity was looking at hitting Rs 1,000 crore turnover by 2023.

Abhishek Auto Industries has a long association with Takata Corporation, the Japanese seat belt, airbag and security systems major. In 2000, it formed a 70:30 JV with Takata which was dissolved 6 years later. In 2007 it formed a JV with Key Safety System Inc USA to become KSS Abhishek Safety System.

👉 The NCLAT has dismissed an appeal filed by the wife and daughter of a former executive of IL&FS group that challenged a tribunal order permitting the government to implead them in the oppression and mismanagement case at the infrastructure conglomerate.

The National Company Law Appellate Tribunal, while dismissing the plea by Ashakiran and Akanksha Bawa, wife and daughter of Ramesh C Bawa, former managing director and chief executive officer of the debt-ridden group, against a National Company Law Tribunal order, also dismissed their plea that sought to reopen their bank accounts that were sealed.

A three-member bench of the NCLAT comprising Justice Jarat Kumar Jain and tribunal members Balvinder Singh and Ashok Kumar Mishra observed that the presence of the Bawas would enable the NCLT to effectively decide the case. “Impleading a party doesn’t mean that the charges are proved,” the appellate tribunal said.

The Ministry of Corporate Affairs had movedan application in the NCLT in April 2019 to implead the duo in the case of oppression and mismanagement in the IL&FS group entities.

The ministry had alleged that Ramesh Bawa had contravened the tribunal’s order by transferring amounts to bank accounts of his wife and daughter. It had also alleged that the transferred amounts were originally siphoned from the accounts of IL&FS and were withdrawn subsequently despite an order that prohibited the operation of bank accounts and lockers. The NCLT had allowed their impleadment in September last year.

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📲 Download my official Android app "Updates by CARJ" 📚 to stay connected with latest news and updates 📝

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28 May 2020 News and Updates

27th May 2K20

Ø  Fitch projects Indian economy to contract 5% this fiscal

Ø  GDP growth seen at 1.2% for Q4 FY20: SBI report

Ø  67% of 92 FPOs' biz hit due to COVID-19 lockdown

Ø  Discoms to get interim relief from Rs 90K cr: IndRa

Ø  States deficit jumps to 4.5 pc of GDP: Report

Ø  India jobless rate continues to hover above 24%

Ø  Firms may get input tax credit for masks, PPEs

Ø  Reliance Power wins lawsuit challenging validity of arbitration award

Ø  Govt to ask Central PSUs to ramp-up dividend payouts, share buybacks

Ø  Revised inter-creditor pacts may do away with need for 66% lenders' nod

Ø  PFC lends Rs 22,000 cr to Narmada Basin Projects for 225 Mw hydel project

Ø  JSPL's Q4 consolidated profit at Rs 306 cr, cuts net debt by Rs 4,379 cr

Ø  India Ratings estimates States borrowings at ₹8.25-lakh cr in FY2020-21

Ø  PSBs to provide emergency credit to MSMEs at 7.5% interest rate

Ø  Resolution of stressed thermal power assets set to trip

Ø  JK tyre rolls out its 20 millionth Truck/Bus Radial tyres

Ø  Tata BlueScope launches smart steel structures to fight Covid-19

Ø  Bharti Airtel promoter sells over $1 bn stake to Societe Generale, others

Ø  Mukesh Ambani may consider overseas IPO for Jio Platforms

Ø  Warner Music kicks off $1.8 billion Nasdaq IPO

Ø  Reliance's rights issue subscribed 3.13% on Day 4

Ø  Tech due diligence will be top priority for firms eyeing M&As

Ø  India facing its worst recession in current fiscal, says Crisil

Ø  SC issues notice to Centre, RBI on plea against interest on loans during moratorium

Ø  Vedanta seeks shareholders nod for delisting; e-voting till June 24

Ø  RBI to auction 84-day CMBs worth Rs 80,000 crore

 

Ø  Singapore cuts GDP outlook again as virus batters economy

Ø  India's Glenmark to test potential covid19 drug combination

Ø  Oil climbs as suppliers stick to output cuts, coronavirus lockdowns ease

Ø  India may need to pump $20 billion into state banks

Ø  April manufacturing IIP to contract by 50-60%: Report

Ø  One in six young people out of work due to Covid: ILO

Ø  Renault and Nissan rule out merger, unveil survival plan

Ø  NCLT approves IL&FS stake sale in GIFTCL to Gujarat

Ø  Cos' PM Fund donations to qualify as CSR expenditure

Ø  India, Australia bilateral virtual summit on June 4

Ø  India's Q1 GDP may contract 40%, states to lose Rs 30 trillion: Report

Ø  Anti-dumping duty likely on a rubber imported from China, 3 other countries

Ø  Govt may launch coal blocks auction under commercial mining on Jun 11

Ø  JP Morgan chief economist forecasts 'strong rebound' in Indian markets

Ø  Exchanges report 38% decline in daily average commodity volumes in May

Ø  Sebi unlikely give result disclosure waiver to India Inc for Q1FY21

Ø  GDP growth may rebound to 5% in FY22: Former RBI governor

Ø  Government considering to bring natural gas under GST: Petroleum Secretary

Ø  If plans fructify, NHPC will become world’s largest floating solar company

Ø  Dabur Q4 profit slides 24% due to Covid-19 impact

Ø  NTPC eyes majority stake in ADAG’s Delhi power utilities

Ø  IndiGrid InvIT expects to continue growth trajectory in FY21

Ø  Now, Microsoft looks to grab a $2 billion stake in RIL’s Jio Platforms

Ø  Sun Pharma delays FY21 sales guidance on covid-19 uncertainty

Ø  Adani Power gets nod to set up 1,320 MW plant in Madhya Pradesh

Ø  Patanjali to hit bond markets, to issue NCDs

Ø  SBI to automatically extend moratorium by another three months

Ø  Dabur India net profit slumps 24% in Q4; Chyawanprash sales surge

Ø  Need for growing NDB into global development institution: FM Nirmala Sitharaman

Ø  India initiates anti-dumping probe into imports of polyester yarn from 4 countries

Ø  ICRA expects muted participation in spectrum auction, sees industry debt rising

Ø  Despite pandemic, Tamil Nadu attracts 17 investors worth Rs.15,128 Cr

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Issues emerging From Covid 19

AVAILABILITY OF ITC ON MEDICAL INSURANCE?

Section 17(5) of the CGST Act blocks ITC on health insurance service. 

However, ITC is available where an employer is obliged under any law to provide the same to employees.

The Ministry of Home Affairs vide Order No.40-3/2020-DM-I(A) dated April 15, 2020 prescribed Standard Operating Procedure (‘SOP’) to be followed by factories, offices, workplaces and other establishments. 

This SOP made medical insurance mandatory for workers. The said order and SOP was applicable only till May 17, 2020 and then withdrawn by latest MHA Order dated May 17, 2020.

Through SOP, insurance has been made mandatory for workers, SOP is meant for all type of organisations like factories, offices etc. Thus, the word ‘workers’ under SOP should be read as employees and contractual workers. 

Hence, taxpayers can claim ITC on medical insurance policy taken for its employees, contractual workers only if such policy was taken between April 15, 2020 and May 17, 2020.

However, ITC shall continue to be available for insurance taken to comply any law in force.

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Voluntary Transfer Pricing adjustment eligible for Income Tax Deduction u/s 10AA: ITAT grants Relief to EY [Read Order]

Read more at: https://www.taxscan.in/voluntary-transfer-pricing-adjustment-eligible-for-income-tax-deduction-u-s-10aa-itat-grants-relief-to-ey/58872/

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👉 The NCLAT has set aside an NCLT order to implead the Corporate Affairs Ministry as a party in all proceedings related to insolvency and company matters before it.

Allowing the plea filed by the Ministry of Corporate Affairs (MCA), a two-member bench of the appellate tribunal said the NCLT's direction was "beyond the power" and amounted to "imposition of a new rule in a compelling fashion".

Earlier, in an order on November 22, 2019 the principal bench of the National Company Law Tribunal (NCLT) has directed to make MCA a party in all applications filed under the Insolvency and Bankruptcy Code as well as the Companies Act before all benches, so that authentic record is made available by the office for proper appreciation of the matters.

Rejecting the order, the NCLAT said: "The impugned order making it applicable throughout the country to all the Benches of the National Company Law Tribunal is untenable one and the said order suffers from material irregularity and patent illegality in the eye of Law".

"As a logical corollary, this Tribunal set aside the impugned order dated November 22, 2019 in (IB)-939(PB)/2018 in furtherance of substantial cause of justice. Consequently, the present Appeal succeeds," said a two-member NCLAT bench comprising Justice Venugopal M and V P Singh.

The National Company Law Appellate Tribunal (NCLAT) said the order was passed by the NCLT to ensure that authentic record is made available by the MCA officers for proper appreciation of the matter but "such a wholesale, blanket and omnibus directions cannot be issued in single stroke".

👉 Liquidation of companies under the Insolvency and Bankruptcy Code (IBC) continues to account for a larger share than resolution of such entities, Care Ratings said in a report, citing data from the Insolvency and Bankruptcy Board of India (IBBI).

Of the total 3,774 cases admitted for resolution under IBC, 57% continue to still remain in the resolution process and 914 have ended in liquidation (24% of the total cases admitted).

According to the data, around 9% of cases have been closed on appeal or review or settled and 4% have been withdrawn under Section 12A of the IBC.

Mint reported on 20 May that the January-March quarter of fiscal 2019-20 was quite fruitful for banks in terms of stressed asset resolution and recovery under IBC, with lenders realising 64% of their dues. This was primarily led by ₹23,223 crore coming from the resolution of Jaypee Infratech Ltd.

While Jaypee's insolvency proceedings began in August 2017, the resolution plan was approved just two months ago, with state-owned NBCC emerging as the successful buyer of the troubled company. The resolution plan for Jaypee Infratech, however, has been challenged in the National Company Law Appellate Tribunal (NCLAT).

“The number of cases admitted for corporate insolvency resolution processes (CIRPs) over the last 11 quarters has increased significantly and has been generally increasing every quarter, with a major portion of these cases being admitted over the last eight quarters, thereby highlighting the rising acceptance of IBC as an effective debt resolution mechanism," Care Ratings said.

The cumulative share of operational creditors, the report said, increased to 56% at the end of Q4 FY20 from 51% at the end of Q1 FY20, while financial creditors’ share remained at a similar level as of end of Q1FY20. The manufacturing sector accounts for the highest share at 40% of the overall cases followed by real estate (20%), construction (11%) and trading sectors (10%).

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Its a pleasure to inform that after successful implementation of E-hearing, the disciplinary mechanism of ICAI has been further digitized and a separate portal https://disc.icai.org has been hosted.

On this portal all pertinent information related to disciplinary mechanism of ICAI is available such as *procedure to file complaint (physically or through e-filing), Cause List, Orders passed by the Disciplinary Committee, Committee compositions, details of meeting(s), etc.

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✅ Empanelment of CAG -2020-21 (Provisional)

Status of provisional empanelment of the firms and provisional point score for the year 2020-2021 had been furnished on the website @ www.care.cag.gov.in from 28 May 2020 till 4.June 2020.

Complement for rectification of clerical mistakes in the data should become sent by email at sao2ca5@cag.gov.in by 4 June 2020.

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👉 In an appreciable move, the Bengaluru Bench of the National Company Law Tribunal has decided to conduct an online training programme to make Advocates and other stake holders in the Tribunal familiar with its e-filing software.

As the e-filing system is running successfully in some of the NCLT's benches, the principal Bench of NCLT at Delhi has decided to extend this benefit to all its benches. It has been intimated that the online Court system for e-filing will enable online filing of petitions, IAs, objections, re-joinder, etc.

Accordingly, NCLT Bengaluru has decided to provide training to all Advocates, practicing Company Secretaries, practicing Chartered Accountants and practicing Cost & Management Accountants today, i.e. May 27, 2020.

Yesterday, speaking at the inauguration ceremony of the Virtual Courts for Traffic Challan cases at the Madras High Court, Supreme Court Judge, Justice DY Chandrachud had emphasized that the courts' focus must be on imparting training to lawyers in operating e-courts, to make them 'e-enabled'.

👉 The National Company Law Tribunal (NCLT) has allowed the debt-ridden IL&FS to sell its 50 per cent stake in the GIFT City to the Gujarat government for an aggregate consideration of Rs 32.70 crore.

A two-member NCLT bench headed by acting president B S V Prakash Kumar allowed IL&FS to sell its 3.27 crore shares, having a face value of Rs 10 each, of the Gujarat International Finance Tec-City Company Limited (GIFTCL) or GIFT City to the Gujarat Urban Development Company Ltd (GURDCL).

While granting permission, the tribunal observed, "It is evident that the sale consideration is higher than the fair market value of the stake of the applicant in GIFTCL" as determined by RBSA, the agency appointed for valuation.

The GIFT City is India's first operational smart city and international financial services centre in Ahmedabad, Gujarat.

Sale of stake in the GIFT City is a part of the resolution process of the IL&FS, which along with its over 300 group companies had a cumulative debt of Rs 94,215 crore. The newly constituted board of the company has decided to adopt an "asset level resolution" with regard to various group companies and entities.

In 2007, IL&FS had entered in to a Memorandum of Understanding (MOU) with the Gujarat government to develop an integrated township/ International Financial Services City (IFSC).

The joint venture agreement provided an exit option to either of the parties with a right of first refusal to the other.

In January 2019, when IL&FS communicated its intention to divest the shareholding in GIFTCL, the Gujarat government also expressed its willingness to purchase IL&FS shares.

The sale was subsequently approved by IL&FS' Committee of Creditors in terms of the approved resolution framework and was placed before Justice (Retd) D K Jain who supervises the operation of IL&FS resolution process.

IL&FS thereafter moved the NCLT to consummate the sale agreement.

While approving the sale, the NCLT said sale of shares of the GIFT City held by IL&FS to GURDCL shall be €œfree and clear from all encumbrances, liens, security interest and third-party claims including any statutory or tax claims€? upon receipt of sale consideration.

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📲 Download my official Android app "Updates by CARJ" 📚 to stay connected with latest news and updates 📝

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26 May 2020 News and Updates

26th May 2K20

Ø Bharti Telecom to raise $1b via block sale of Airtel stk

Ø Aid for oil firms hit by price crash soon

Ø Interpol notice against Nehal Modi put up for viewing

Ø Labour shortage: FMCG firms to accelerate automation

Ø CBIC clears Rs 11,052 cr GST refund claims since Apr 8

Ø India looks to store cheap oil in United States

Ø Consumer discretionary firms face downgrade

Ø PSUs, govt agencies owe Rs 5 trn in outstanding dues to MSMEs: Gadkari

Ø Contrary to govt's claims, direct tax refunds down 67% till May 21

Ø Govt ask RBI to remove sugar from negative list as virus hits consumption

Ø IL&FS invites EoI for 26% in Tripura power plant, sources say ONGC may bid

Ø Moody's revises outlook on Adani Abbot Point Terminal's rating to stable

Ø Volkswagen car owners entitled to damages in emission scandal: German court

Ø ILO expresses deep concern at ‘suspension’ of labour laws

Ø ₹3-lakh-cr emergency credit linefor MSMEs is now operational

Ø ITC to acquire spice-maker Sunrise Foods

Ø UK High Court asks Anil Ambani to pay $717 million in 21 days

Ø JSW Steel Q4 profit plummets 87 per cent due to low demand

Ø India looks to store cheap oil in United States: Dharmendra Pradhan

Ø India an attractive investment destination: Anurag Thakur

Ø Vedanta seeks shareholder nod for delisting

Ø HDFC Q4 net falls to ₹2,233 crore, declares ₹21/share dividend

Ø Slower volume growth may curb Hindustan Zinc's future dividend payout

Ø Sovereign rating: Economists shrug off downgrade fear amid Covid crisis

Ø People more worried about economic crisis than coronavirus, says study

Ø NCLAT sets asides NCLT order to make MCA party in all insolvency, company matters

Ø New Zealand's media company being sold for just $1 to its CEO

Ø India's crude oil imports fall, product exports surge in April

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👉🏻Supreme Court seeks Centre’s response in plea to ban use of Zoom app

( Supreme Court sought the response of the central government in a plea seeking a ban on the use of Zoom software application, citing privacy and security concerns)

👇🏻 👇🏻 👇🏻

https://bit.ly/2zYziDN

👉🏻French BPO firm Teleperformance terminates 3,000 employees in India

(French business process outsourcing firm Teleperformance has laid off hundreds of employees in India as its business took a hit at the back of COVID-19)

👇🏻 👇🏻 👇🏻

https://bit.ly/3cZT8x4

 

👉🏻Residency under Tax Treaty and Tie Breaker Rules

(Residency under Tax Treaty and Tie Breaker Rules discussed by CA. Anshul Kumar.)

👇🏻 👇🏻 👇🏻

https://bit.ly/2znm3MP

👉🏻Transcendental Meditation - Understanding Meditation with a Scientific Perspective

(Transcendental Meditation , as propagated by His Holiness Maharishi Mahesh Yogi, is a simple, Easy and Scientifically verified meditation technique to de-stress, promote good Health, Peace and Harmony in Life. Attend an Online Introductory Session LIVE on CA Sansaar YouTube Channel on *24th May,* *5:00 PM* onwards)

👇🏻 👇🏻 👇🏻

https://bit.ly/3gjHCyG

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👉 Financial and operational creditors have managed to recover money in just 221 cases, or 14 per cent, of the 1,604 cases resolved by the National Company Law Tribunal (NCLT) till March-end.

In the three years ended March 31, there were about 2,170 cases pending before various Benches of the NCLT, taking the overall cases admitted for resolution to 3,774. The NCLT ordered liquidation in 914 cases (57 per cent) while 312 cases (19 per cent) went on appeal and about 157 litigations (10 per cent) were withdrawn, said Motilal Oswal Research’s three-year report card on the Insolvency and Bankruptcy Code (IBC).

Interestingly, of the 914 cases where liquidation was ordered, the final report was submitted for just 69.

The recovery of loans under IBC drops to 25 per cent from 44 per cent, if one excludes the initial list of 12 large defaulters referred by the RBI, in 2017. Of the 12 large companies that defaulted, Electrosteel Steels, Bhushan Steel, Essar Steel, Alok Industries, Jyoti Structure and JP Infratech were resolved while Bhushan Power is awaiting the final verdict of the Supreme Court.

As of March-end, the average time taken for the resolution of cases stood at 410 days (including the days spent under litigation). This is longer than the prescribed 270-day timeframe. The average time taken for the 914 liquidation orders announced to date is 309 days.

👉 New Delhi, May 22 (PTI) At a time when fresh bids have been invited for the grounded Jet Airways, the deadline for completion of its insolvency resolution process has been extended till August 21 due to the lockdown.

The full service carrier, which shuttered operations in March 2019, is under Corporate Insolvency Resolution Process (CIRP) and the time period given for its completion was to end on June 13.

According to a regulatory filing, 69 days of lockdown period from March 24 to May 31 would be excluded for computing the CIRP deadline.

The nationwide lockdown to curb spreading of coronavirus infections was announced on March 24 and has been extended thrice. It is now to end on May 31.

"Therefore, the revised timeline for completion of the CIRP of Jet is now August 21, 2020, subject to any further extension of the lockdown by the state government of Maharashtra or the central government, as the case may be," the filing submitted to the stock exchanges on Friday said.

As per the filing, Maharashtra government imposed a lockdown owing to the pandemic with effect from March 24, and the airline''s registered office is in Mumbai.

In March, the National Company Law Appellate Tribunal (NCLAT) said lockdown period ordered by the Centre and state governments, including the period as may be extended either in whole or part of the country, where the registered office of the corporate debtor may be located, would be excluded from being counted under the CIRP.

This is applicable to cases where CIRP has been initiated and pending before any bench of the National Company Law Tribunal or in appeal before the NCLAT, the filing said quoting the tribunal.

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Very important ruling:

The entire lockdown period i.e. from the date of imposition of lockdown by the GOI till the reopening of NCLT Chandigarh Bench on regular basis after removal of the lockdown be excluded from the compliances in relation to CIRP.

– New Ram Traders Vs. Rajiv Goyal – NCLT Chandigarh

NCLT considering the Suo Motu Writ Petition (Civil) No(s).3/2020, Regulation 40C of the CIRP Regulations, 2016 and Regulation 47A of Liquidation Process Regulations, 2016 held that In the circumstances and since the facts are not disputed by the respondents and in view of the orders of the Hon’ble Supreme Court of India and the NCLAT and the new Regulations issued by the IBBI, the entire lockdown period i.e. from the date of imposition of lockdown by the Government of India till the reopening of National Company Law Tribunal, Chandigarh Bench, on regular basis, after removal of the lockdown, be excluded, from the compliances required to be made under order dated 13.03.2020 in CA No.893/2019, passed by this Tribunal and in relation to the CIRP.

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👉 In view of a huge backlog of cases at the NCLT, the government will start identifying benches to specifically deal with insolvency and Companies Act-related matters, an official in the corporate affairs ministry said on Saturday. In this regard, the ministry will start with the NCLT benches of Delhi and Mumbai, where more than half of the country's incorporated firms are registered, K V R Murty, joint secretary in the Ministry of Corporate Affairs, said while addressing an ASSOCHAM webinar on 'Regulators' Web-Confluence on Corporate Restructuring, M&As and Joint Venture'.

"What is leading to the lag in timelines in India is the extraordinary burden that the NCLT is faced with the IBC cases, because of which there have been reports that Companies Act matters are taking longer," he said.

Murty further said that the government is increasing the bench strengths of the tribunals for faster disposal of matters.

Among other measures, he said "we are also looking at options where we could identify benches specifically for IBC (Insolvency and Bankruptcy Code)and Companies Act-related matters".

The Ministry of Corporate Affairs "will begin identifying the benches initially in Delhi and Mumbai where more than half of the incorporated companies in India are registered".

So, these are the focus cities to begin with and the government would like to expand the capability and capacity of the National Company Law Tribunal (NCLT) to handle high volume of cases, the joint secretary said.

👉 The National Company Law Appellate Tribunal (NCLAT) in a recent decision upheld the direction of the Adjudicating Authority to substitute the Interim Resolution Professional on the ground that he was an ex-employee of the Financial Creditor.

The financial creditor in the present case, State Bank of India (SBI), had initiated insolvency proceedings against one M/s. Metenere Ltd (the Corporate Debtor) before the Principal Bench of National Company Law Tribunal (NCLT), New Delhi.

The Corporate Debtor objected to SBI's proposal to appoint one Mr. Shailesh Verma as the Interim Resolution Professional, since he had been a loyal employee of the Bank for 39 years and drew his pension from them since retiring in 2016.

Taking note of the Corporate Debtor's apprehension of bias, NCLT ordered SBI to substitute Verma and propose another name. Aggrieved by the same, SBI came in appeal before NCLAT.

The 3-member Bench of NCLAT, headed by Acting Chairperson, Justice Bansi Lal Bhat, identified that "the sole question arising for determination in this appeal is whether an ex-employee of the 'Financial Creditor' having rendered services in the past, should not be permitted to act as 'Interim Resolution Professional' at the instance of such 'Financial Creditor', regard being had to the nature of duties to be performed by the 'Interim Resolution Professional' and the 'Resolution Professional'."

Examining him on three counts, NCLAT found Verma fit to perform the duties of a Resolution Professional.

The Corporate Debtor's argument that Verma is drawing a pension from SBI, which falls within the definition of 'salary' under the Income Tax Act (IT Act), 1961, thus making him an 'interested person' was repelled by the Bench as defying logic. It was clarified that Section 17(1) of the IT Act brought pension within the ambit of 'salary' only for the purposes of computing of income to determine tax liability.

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Economy: Foreign investors have infused over Rs 9,000 crore into the Indian equity markets in May so far amid attractive valuations of stocks and a mega block deal involving HUL. The inflow comes following a net withdrawal of Rs 6,883 crore in April and Rs 61,973 crore in March on fears of a coronavirus induced global recession.

⚫The Govt extended the validity of various motor vehicle-related documents till July 31. No additional/late fee will be charged for delays in the validation of documents pending from February.

Finance: The extension of moratorium by three months beyond May is likely to expose lenders to the risk of some borrowers having the capability to pay skipping repayments, fear bankers. 

⚫Insurance co's are bracing for large claims on account of Amphan, the cyclone which ravaged West Bengal and Orissa last week. Most of the claims are expected from property, motor and crop insurance sectors.

⚫Value erosion in PSUs can limit Govt's disinvestment target. The fall in stock prices has eroded significant value in some of the largest PSUs, which will limit receipts for the Govt. 

Current Affairs: India witnessed the biggest spike with 6,767 positive coronavirus cases and 147 deaths reported in the last 24 hours, taking the total number of Covid-19 cases to 131,920

⚫The Tirumala Tirupati Devasthanam Board has decided to sell 50 immovable properties in Andhra Pradesh and Tamil Nadu, worth Rs 23.92 crore through a public auction.

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👉HDFC Q4 results preview: Profit may fall up to 22% in absence of dividend income

https://economictimes.indiatimes.com/markets/stocks/news/hdfc-q4-results-preview-profit-may-fall-up-to-22-on-absence-of-dividend-income/articleshow/75933156.cms

 

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👉 Stating that Leo Meridian Resort that defaulted banks to a tune of more than 700 crore cannot hide under the provisions of Insolvency and Bankruptcy Code, the national company law tribunal

at Hyderabad refused to interfere in the action of the 

enforcement directorate that attached some properties belonging to Leo Meridian.

The resolution professional who was overseeing the insolvency process of the defaulter company filed a plea before NCLT questioning the attachments made by the Enforcement Directoraate after commencement of the insolvency process.

Enforcement Directorate counsel Anjali Agarwal argued that the resolution plan was not approved by the tribunal by the time they attached the properties.

More over Prevention of money laundering Act is a special law and the NCLT has no jurisdiction to interfere in the actions of ED, she said. The NCLT bench comprising Ratakonda Murali, judicial member and Narender Kumar Bhola, technical member too said that the company can not take shelter under IBC and refused any relief to Leo Meridian.

👉 An appellate tribunal upheld NCLT order prohibiting appointment of a former bank official as a resolution professional (RP) of a bankrupt company due to the possibility of bias, in a judgement that experts say could have wide ramifications on ongoing and future corporate insolvency resolution process.

The National Company Law Appellate Tribunal(NCLAT) upheld an order passed by Delhi-NCLT over appointment of a former State Bank of India (SBI) official as resolution professional or RP in CIRP of Metenere Ltd.

According to experts, the ruling could have an impact on the resolutions of several companies including the Rs 40,000 crore Videocon Industries case where former bank employees are working as RPs.

The financial creditor, in this case SBI, had appointed Shailesh Verma as the interim RP while initiating CIRP against the corporate debtor, Metenere Ltd. As Verma had been associated with SBI for 39 years, retiring as chief general manager in 2016, the corporate debtor felt he was unlikely to act fairly while discharging his duties.

On January 4, the Delhi bench of the NCLT passed a judgment ordering SBI to substitute Verma as RP on the basis of an appeal of bias filed by Metenere against Verma . SBI appealed against the order in the NCLAT.

Metenere argued that Verma was an ‘interested party’ as he was drawing pension from SBI, which was considered as salary under the Income Tax Act, apart from being an ex-employee.

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👉🏻NCLAT sets aside NCLT order on making MCA party in all IBC cases

(NCLAT set aside an order of the Principal Bench of the NCLT which had directed that the MCA be made a party in all cases filed under the Section 7, 9, and 10 of the IBC)

👇🏻 👇🏻 👇🏻

https://bit.ly/2WZplPg

👉🏻CBIC clears GST refund claims of Rs 11,052 Cr since April 8

(The CBIC had said that the decision to process pending refund claims has been taken with a view to provide immediate relief to the taxpayers in these difficult times)

👇🏻 👇🏻 👇🏻

https://bit.ly/2AayM5o

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👉 Completion of MCS Course and Advanced IT Course through Virtual Mode as one time measure for students of Final course exam (July, 2020 & November,2020) - (21-05-2020)

https://www.icai.org/new_post.html?post_id=16536&c_id=219

👉 PERIOD/DAYS OF EXTENSION FOR NAMES RESERVED AND RESUBMISSION OF FORMSPdf(40 KB)

http://www.mca.gov.in/Ministry/pdf/Extension_22042020.pdf

👉 Pre-shipment and Post-shipment Export Credit – Extension of Period of Advance

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11904&Mode=0

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👉 The National Company Law Appellate Tribunal (NCLAT) set aside an order of National Company Law Tribunal (NCLT) which mandated the impleadment of the Union Ministry of Corporate Affairs (MCA) as a party in all Insolvency and Bankruptcy Code (IBC) matters and Company petitions.

NCLAT was of the view that the order was tantamount to the imposition of a new rule, which was beyond the powers of NCLT. Thus, allowing the Union Government's appeal, the Tribunal held that the said order was untenable as it suffered from material irregularities and was patently illegal in the eyes of law.

"This Tribunal comes to an inevitable and irresistible conclusion that the directions issued in respect of Application No.2024/ 19 filed by the Resolution Professional to implead the 'Secretary of Ministry of Corporate Affairs' as party Respondent in all cases of I&B Code is nothing but beyond the power of the Tribunal and it tantamounts to imposition of a new rule in a compelling fashion. In short, the impugned order making it applicable throughout the country to all the Benches of the National Company Law Tribunal is untenable one and the said order suffers from material irregularity and patent illegality in the eye of Law. As a logical corollary, this Tribunal, this Tribunal set aside the impugned order dated 22.11.2019 in (IB)-939(PB)/2018 in furtherance of substantial cause of justice. Consequently, the present Appeal succeeds", ordered NCLAT.

In November 2019, the Principal Bench of NCLT had issued directions that MCA, through its Secretary, would be impleaded as a respondent party in all cases of the IBC and Company Petitions, on grounds that authentic records would then be made available by the officers of MCA for proper appreciation of the matter. The same was to be applicable throughout the country, to all the Benches of NCLT. Aggrieved by the same, the Centre preferred an appeal in NCLAT and the operation of the Order was stayed.

In its challenge, the Centre argued that NCLT could not pass an order which was in the "nature of rule", as rule making powers were the exclusive domain of the Government. Averring to the same, it was urged that the order was "bristled with numerous infirmities" as the Tribunal did not even issue a notice to the Centre before passing such an order.

👉 The National Company Law Appellate Tribunal (NCLAT) has quashed the November 22 order of the National Company Law Tribunal (NCLT) that sought to implead the Ministry of Corporate Affairs (MCA) through its secretary a party respondent in all cases related to the The Insolvency and Bankruptcy Code (IBC).

The NCLT had said making MCA a party would ensure that authentic record is made available by officers of the MCA for proper appreciation of the matters. It had also said the order would be applicable throughout the country to all the NCLT benches.

The three-member NCLAT bench, adjudicating on the MCA’s objection, said the NCLT order to “implead the secretary of Ministry of Corporate Affairs as party respondent in all cases of I&B Code is nothing but beyond the power of the tribunal and it tantamounts to imposition of a new rule in a compelling fashion. In short, the impugned order making it applicable throughout the country to all the benches of the NCLT is untenable one, and the said order suffers from material irregularity and patent illegality in the eye of Law.”

“As a logical corollary, this tribunal sets aside the impugned order. Consequently, the present appeal succeeds,” the NCLAT order, pronounced on May 22, said.

Following the NCLT’s order, the government challenged it in the NCLAT and got a stay from the tribunal in December.

Reacting to the NCLAT order, Richa Roy, partner, Cyril Amarchand Mangaldas, said, “Although the MCA has been central in the implementation of the IBC, their being a party to every single IBC fillings is not only excessive but perhaps counterproductive. The NCLAT order is, therefore, a welcome decision that reaffirms the correct position.”

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22 May 2020 News and Updates

22 May 2K20

Ø  Exporters getting order enquiries from US, Europe

Ø  India to add only 5,000 MW solar capacity in 2020

Ø  India's GDP to see 5% contraction in FY21, says Icra

Ø  Govt eases norms of PCGS to help NBFCs, HFCs

Ø  Domestic flights to resume from May 25: Government

Ø  USD 575 billion investment opportunity in transport infra in next 5 yrs: Kearney

Ø  Bank credit grows 6.52 pc; deposits up 10.64 pc

Ø  Sebi gives exit option to Franklin Templeton's mutual fund investors

Ø  Cabinet approves new methodology for awarding commercial coal mines

Ø  Net enrolments with EPFO dip to 5.72 lakh in March from 10.21 lakh in Feb

Ø  Govt to use RBI money to support NBFCs for just three months: Union Cabinet

Ø  Centre considers market borrowing for GST compensation to states

Ø  Global merchandise trade volumes likely to nosedive in H1, says WTO

Ø  SEBI asks firms to reveal financial impact of Covid-19

Ø  Bajaj Auto profit dips 3.86% to ₹1,354 crore in March quarter

Ø  Union Cabinet approves Emergency Credit Line Guarantee scheme for MSMEs

Ø  Centre releases ₹15,340 crore as GST compensation to States

Ø  After 16% drop in sales, UltraTech eyes ‘solid’ Q1

Ø  JSW Energy puts GMR Kamalanga buy on hold

Ø  RIL’s Rights Entitlement shares rise 33% as Rs53,125 cr rights issue kickstarts

Ø  Jaypee Infratech resolution behind bulk of banks' Jan-Mar recoveries under IBC

Ø  NCDEX to launch India's first agri-futures index on May 26

Ø  UltraTech Cement Q4 profit at ₹3,239 crore, net sales ₹10,745.62 crore

Ø  15th Finance Commission's fiscal consolidation panel to meet on Thursday

Ø  GDP growth in this fiscal depends on intensity of Covid-19: FinMin report

Ø  Covid effect: Crude oil import to fall 8.9% in FY21

Ø  PFC-REC to clear genco dues directly from discom loans

Ø  Dr Reddy’s Q4 net up 76% at Rs 764 crore on greater revenue contribution from US, Europe

 

Ø  World Bank estimates 60 million people may fall into extreme poverty due to covid19

Ø  Stimulus package fails to involve banks as frontline warriors, says RBI board member

Ø  Foreign investors pull out $26 billion from Asian economies, $16 billion from India

Ø  Migrant workers turn towards banking for employment

Ø  Indian telcos' mobile growth weakens on virus: Fitch

Ø  Banks to request FinMin to extend payment moratorium

Ø  Airtel, Vodafone Idea jittery about Huawei’s gear supply

Ø  MNRE may now hold auctions only for RTC and hybrid projects

Ø  MNRE may now hold auctions only for RTC and hybrid projects

Ø  FinMin sanctions Rs 92,077 cr to states as devolution of central taxes

Ø  Govt to provide one-time guarantee of Rs 10,000 cr for NBFC assets, bonds

Ø  AIF investments in Mauritius, Singapore and Honk Kong under Sebi lens

Ø  Sebi eases 90-day curing period norm for defaulting firms post-downgrade

Ø  Corporate revenues drop over 25% during Covid-19 lockdown: Survey

Ø  Strides Pharma gets DGCI approval to test potential Covid-19 drug

Ø  Government notifies Safe Harbour Rules for AY 2020-21, no change in rates

Ø  Zydus Cadila supplies first batch of Covid Kavach ELISA to ICMR

Ø  ONGC, NTPC to set up joint venture for renewable energy business

Ø  Hindustan Zinc net dips; to pay dividend of ₹16.50 a share

Ø  Covid-19 fallout: JSW deal to buy Kamalanga Energy put on hold

Ø  States GST collections may dip 30 per cent this fiscal: ICRA

 

Ø  Govt calls meet to mull reforms for drug regulation amid covid

Ø  CCI approves Emami Cement acquisition by Nirma arm

Ø  Rajan says migrant workers need money for vegetables, cooking oil, shelter

Ø  Credit growth withers under lockdown as outstanding loans drop Rs1.36 trillion

Ø  Govt allows banks to buy securities of low-rated NBFCs under PCGS 2.0

Ø  Aditya Birla Sun Life Mutual Fund suspends inflows into two of its debt schemes

Ø  Airtel acquires 10 per cent stake in AI startup Voicezen

Ø  GST Analytics wing to identify risky suppliers to exporters

Ø  Rs 50 crore investment criterion should define MSMEs for export sector: AEPC

 

Ø  India to resume domestic passenger flights from May 25

Ø  Recession-hit Japan's exports, imports fall due to pandemic

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Executing Contracts Electronically in times of Covid-19 – By Adv Amit A. Tungare

Many a times, Parties to the contract are skeptical about concluding the contract via e-mail. Some believe that a contract if concluded over e-mail and left unstamped would leave major lacuna in its legal validity and the other party may challenge its validity if and when enforced. There are doubts that if the parties agree to the terms over e-mail, the contract may not be considered legal. There is always a belief that such contracts allows the party to take the terms very causally and either party can easily wriggle out of the deal without much hassle.

https://www.linkedin.com/posts/ibclaw_executing-contracts-electronically-in-times-activity-6669058387290013696-R6pg

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👉Important Due Dates For     GST  :  

GSTR 3B ( April,2020 )  :          May 20 , 22 , 24   (2020) as the case may Be .

       

CMP 08 (Jan to Mar 2020) :          july 07th , 2020 .

GSTR-1 (Apr,2020) :    May 11th, 2020 ( if Turnover exceeds rs 1.5 cr. or Opted to file monthly Returns. 

                                                         

GSTR-1 (Apr-Jun,2020) :   Jul 31st, 2020  ( if  Quarterly return for registered persons with aggregate turnover upto Rs 1.5 Crores)                                                             

GSTR-4 (2019-20): Jul 15th, 2020 .

    

GSTR-9 (2018-19)  :              Sep 30th, 2020

GSTR-9A (2018-19)   :             Sep 30th, 2020  

GSTR-9C (2018-19)   :             Sep 30th , 2020

👉NOTE : In relation to GSTR1 and GSTR 3B there is no change in due Dates but if these are filled up to 30th June 2020 , then govt. has provided relief from late fees and penalties. 

👉NFRA invites comments from regulated entities on 

The Draft Procedure for Submission of Audit Files to     NFRA by 31st May, 2020. - (19-05-2020) .    

                                                             

           https://www.icai.org/new_post.html?post_id=16522&c_id=240

 👉The last date for submission of applications for the posts of AGM, Manager and Assistant                                                             Manager in NFRA on deputation/ short term contract basis 15-05-2020 to 30-05-2020.

          

            http://www.mca.gov.in/Ministry/pdf/AGM_11052020.pdf      

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👉 The National Company Law Tribunal (NCLT), Bengaluru, has ordered the winding up of Super Royal Holidays India Pvt. Ltd., Bengaluru, by declaring that the incorporation and conduct of business of the company was for “fraudulent objects” of ponzi scheme in the guise of offering holiday tour packages by collecting membership fees.

The Ministry of Corporate Affairs (MCA) sought the winding up of the company following the outcome of an investigation carried out after noticing that the company had deposited and withdrawn around ₹10 crore during the period of demonetisation in 2016.

“On perusing the financial statements of the company, it is clear that the money they collected by way of membership fees etc. was largely being pocketed by agents and director-cum-shareholders by way of commission, awards, dividends for directors, etc., leaving paltry remains for the so-called service [tour packages] for their members. Therefore, it is established that the company is running a ponzi scheme, as rightly contended by the MCA,” the tribunal held.

The tribunal also said that the company was “established exclusively for the benefit of the three promoters-cum-directors-cum-shareholders and their agents” and hardly any service was provided to most its customers.

The company enrolled members by collecting ₹11,000 for single membership, ₹22,000 for triple membership, and ₹33,000 for family membership. This life membership fee carried an offer of free tour packages for two nights/three days, to be availed within the next three years by paying a package cost ranging ₹375 to ₹4,800, depending upon location. The company claimed that it had around two lakh members, but could not produce the complete membership details before the authorities.

On examination of the company’s business model, the MCA found that the company was running “nothing but a ponzi scheme by collecting deposits under the guise of membership fee/enrolment fee from the general public”.

👉 The last quarter (January-March) of financial year 2019-20 was quite fruitful for banks in terms of stressed asset resolution and recovery under the Insolvency and Bankruptcy Code (IBC), realising 64% of their dues. This was primarily led by ₹23,223 crore coming from the resolution of Jaypee Infratech Ltd.

While Jaypee's insolvency proceedings began in August 2017, the resolution plan was approved just two months ago, state-owned NBCC emerging as the successful buyer of the troubled company. The resolution plan approved in Jaypee Infratech has been challenged before the National Company Law Appellate Tribunal (NCLAT).

The realisation ratio (realisation as a percentage of dues) in the March quarter is higher than the total realisation ratio since the beginning of IBC at 46% and also higher than that of the December quarter of FY20, showed data from the Insolvency and Bankruptcy Board of India (IBBI). It was at 12.16% in the December quarter. These realisation numbers are based on resolution plans approved by bankruptcy tribunals and do not necessarily mean that banks have recovered the dues.

The average time taken for competition of the resolution process is 375 days, showed IBBI data. But last-minute litigations have plagued the system. Take the instance of Essar Steel. While IBC prescribes for asset resolution to happen within 330 days, Essar Steel’s resolution and sale to Arcelor Mittal took 866 days.

This resolution plan of Jaypee Infratech has almost single-handedly increased the aggregate realisation for financial creditors or lenders. Then there were assets resolutions that have led to frugal recovery for banks. For instance, in the case of Zion Steel Ltd, banks will recover ₹15 crore of the outstanding debt of ₹5,367 crore.

Since finance minister Nirmala Sitharaman announced that there will be no fresh cases in the IBC for the next one year, bankers have been worried about drop in resolutions. Mint reported on 18 May that lenders are concerned over deteriorating asset quality post covid-19 and also hamstrung with regard to resolution in the absence of IBC.

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ICAI extends time-period for

commencement-of-practical.

training-for-CA Students

https://www.icai.org/new_post.html?post_id=16526&c_id=347

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👉 Lockdown has put final clearance from National Company Law Tribunal (NCLT) for NHPC limited to take over insolvency hit 120MW Rangit Stage IV hydroproject in Himalayan state Sikkim to a halt. But the Mini Ratna PSU has started its homework on the project to minimize cost and time overrun.

“After official clearance from NCLT, NHPC also needs formal nod from Public Investment Board (PIB) and Consultative Committee of Economic Affairs(CCEA) to start working on the project. This lockdown is undoubtedly for a greater cause. But it is delaying all these proceedings making things harder,” said D. Chattopadhyay, Executive Director, NHPC.

After emerging out as the highest bidder under a resolution plan for insolvency bound Hydropower Company Jal Power Corporation’s ‘Rangit stage IV’ HE Project, with its bid of Rs 165 crores.

“While waiting for the clearances, we have started preparing our tender award documents to avoid delay in initiating field work. These homework includes civil mechanical as well as electrical all the three main sectors. This can minimize cost or time overrun for the project.

Any delay in execution pushes up the load of IDC (Interest During Construction) for the capital borrowed by us,” said Chattopadhyay.

👉 The last quarter (January-March) of financial year 2019-20 was quite fruitful for banks in terms of stressed asset resolution and recovery under the Insolvency and Bankruptcy Code (IBC), realising 64% of their dues. This was primarily led by ₹23,223 crore coming from the resolution of Jaypee Infratech Ltd.

While Jaypee's insolvency proceedings began in August 2017, the resolution plan was approved just two months ago, state-owned NBCC emerging as the successful buyer of the troubled company. The resolution plan approved in Jaypee Infratech has been challenged before the National Company Law Appellate Tribunal (NCLAT).

The realisation ratio (realisation as a percentage of dues) in the March quarter is higher than the total realisation ratio since the beginning of IBC at 46% and also higher than that of the December quarter of FY20, showed data from the Insolvency and Bankruptcy Board of India (IBBI). It was at 12.16% in the December quarter. These realisation numbers are based on resolution plans approved by bankruptcy tribunals and do not necessarily mean that banks have recovered the dues.

The average time taken for competition of the resolution process is 375 days, showed IBBI data. But last-minute litigations have plagued the system. Take the instance of Essar Steel. While IBC prescribes for asset resolution to happen within 330 days, Essar Steel’s resolution and sale to Arcelor Mittal took 866 days.

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👉🏻RBI cuts repo rate, extends moratorium on term loans by 3 months

(RBI  announced that it has decided to cut the repo rate cut by 40 basis points from 4.4 per cent to 4 per cent, adding that the reverse repo rate has been reduced to 3.35 per cent)

👇🏻 👇🏻 👇🏻

https://bit.ly/2zVWOBl

👉🏻Appointment of Internal Auditors for Noida Metro Rail Corporation

(Noida Metro Rail Corporation  intends to appoint a consultant for providing internal audit services for a period of one year)

👇🏻 👇🏻 👇🏻

https://bit.ly/36omqTf 

 

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Announcements: RBI Governer: 22/05/2020

1. Term loan moratorium extended till August 31, 2020 - The loan moratorium will be extended till August 31, 2020. This makes it a six months moratorium.

2. Deferement of Interest on Working Capital - Interest on working capital is deferred by another 3 months i.e. till 31st August, 2020. 

3. Conversion of Interest on working capital to interest term loan - Lending institutions are being permitted to convert the accumulated interest on working capital facilities over the deferment period (up to August 31, 2020) into a funded interest term loan (Repayable before 31st March, 2021). 

4. Margin for Working Capital - Drawing Power - Lending institutions are being permitted to restore the margins for working capital to the original level by 31st March, 2021. 

5. Reduce repo rate by 40 bps to 4 percent - Accordingly, Interest rate would be reduced.

6. Export Credits - Maximum permissible export credit (Pre and Post Shipments) extended from 12 months to 15 months.

7. Payment against Imports - Extension of time limit for making payments against imports from 6 months to 12 months

8. Support to EXIM Bank - Facility of Rs 15,000 crore line of credit for 90 days for US dollar swap facility will be provided to EXIM Bank.

9. Extension of Resolution Timelines - Deferement or moratorium period shall excluded while calculating 180 days resolution period.

10. Group Financing- Group exposure extended from 25% to 30%

10. Support to SIDBI -  In order to provide greater flexibility of SIDBI, another 90 days extension for the 90-day term loan facilities will be offered. 

11. Assets Classification - Loan Moratorium shall not have any implications on changes in assets classification, credit history and ageing norms etc.

12. Trade Impact -  Volume of world trade can shrink by 13%-32% this year.

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Thanks for reading

20 May 2020 News

 20th May 2K20

Economic Times

Ø  Govt measures unlikely to stimulate demand: Crisil

Ø  Rural India to spur demand due to migration

Ø  Google to invest in people and partnerships in India

Ø  RBI may soften restructuring norms

Ø  WTO: India pushes for building infra, digital skills

Ø  Warren Buffett cuts crisis-era bet on Goldman Sachs

Ø  Petrochem, Chemical imports may face 15% Covid tax

Business Standard

Ø  RBI refuses a dozen licences to NBFCs with investments from Mauritius

Ø  Tata Steel resumes talks with Germany's Thyssenkrupp for possible merger

Ø  India's account surplus to touch $20 bn in FY21 due to Covid-19: Barclays

Ø  Icra revises domestic steel industry outlook to negative from stable

Ø  Nestle India's business loss could be more than 30%, says MD Narayanan

Ø  40% Indian tech startups have suspended work due to coronavirus: Nasscom

Ø  Moratorium to strain NBFC liquidity even further, bad debts to rise

Business Line

Ø  Recovery in steel demand to be delayed on lockdown extension

Ø  India resumes purchases of Malaysian palm oil

Ø  EU raises restrictions on capsicum imports from India, Pakistan

Ø  Tata Power posts over two-folds jump in Q4 net to Rs 475 crore

Ø  Embassy REIT posts ₹462-crore Q4 operating income

Ø  Apollo Tyres Q4 net profit down 7 per cent at ₹78 crore

Mint

Ø  Bajaj Finance has 27% of loanbook under moratorium: MD Rajeev Jain

Ø  Flipkart's limited ops negatively impacted international business: Walmart

Ø  Ujjivan Small Finance Bank Q4 net rises 15% to ₹73.2 cr

Ø  India’s power bailout depends on states clearing utility dues

Ø  Power Grid to file draft papers for $1 bn InvIT

Ø  Siemens AG sells 24% stake in Indian unit for ₹8,520 crore to group firm

Financial Express

Ø  India adds 1,043 MW of wind and solar utility scale capacity in January-March: Report

Ø  UP sugar industry seeks ‘preferential treatment’ for clearance of power dues

Ø  IFSC bank units to report all OTC forex deals to CCIL platform from June 1: RBI

Ø  NBFCs more at risk from COVID-19 than banks: Moody’s

Deccan Chronicle

Ø  India will suffer worst recession since 1979: Goldman Sachs

Ø  Nasdaq to tighten listing rules, restricting Chinese IPOs

Ø  Fiat India Automobiles, Tata Motors JV plant resumes operations at Ranjangaon

19 May 2020 News and Updates

19th May 2K20

Ø  Stimulus dent to fiscal deficit at 1-2% of GDP: Experts

Ø  Govt to bring Ordinance to amend companies law 

Ø  'PFRDA proposes composite social security scheme'

Ø  Maruti to resume operations at Gurugram plant

Ø  E-commerce firms may finally resume full operations

Ø  China warns US of 'all necessary measures' over Huawei

Ø  'BoE looking more urgently at negative rates'

  

Ø  Govt allows Indian public companies to directly list shares overseas

Ø  General Atlantic picks 1.34% stake in Jio platforms for Rs 6,598.38 cr

Ø  Higher borrowing can see FY21 combined fiscal deficit hit 12%: Economists

Ø  Fiscal stimulus 2.0: States allowed to borrow more, but with conditions

Ø  Reserve Bank makes $21-billion cut to US treasury holdings in March

Ø  FinMin notifies retrospective amendment in CGST Law

Ø  Experts counsel caution in airport privatisaton

Ø  Government to privatise non-strategic PSUs: FM

Ø  Gem and jewellery exports dip to three-year low in FY'20

Ø  Sterling and Wilson Solar bags EPC contract in Australia for Rs 2600 crore

 

Ø  Indian economy may contract by 45% in June quarter: Goldman Sachs

Ø  India Inc urges further easing of curbs amid lockdown extension

Ø  Lower input costs aid margins even as revenue falters, Q4 early trends show

Ø  Travel and tourism industry in shock with no relief measures from govt

Ø  Coronavirus pulls down CII-IBA Financial Conditions Index to below 50

Ø  FM Sitharaman paves way for PSU mergers, privatisation; opens all sector opportunities for private cos

Ø  FM Sitharaman: No insolvency cases against MSMEs for 1 year; Covid-related debt excluded from defaults

  

Ø  India to export non-medical, non-surgical masks worth USD 1 billion in next 3 months

Ø  FM Nirmala's fifth tranche covers MNREGA to health, education and more

Ø  Energy dispute deepens between Mexico and foreign allies

Ø Nabard disburses Rs 20,500 crore to coop banks, RRBs

Ø Tata terminates joint venture with PepsiCo

Ø Centre, states' deficit to be at 12% of GDP: DBS

Ø Vedanta's board approves delisting proposal

Ø L&T Shipbuilding amalgamated with Larsen & Toubro

Ø Govt. may monetise debt if fiscal overshoots: Official

Ø Govt. notifies cut in EPF contribution for 3 months

Ø New-look inter-creditor agreement on the cards as IBC process suspended

Ø RIL says core business has got 'demand-side shock' due to coronavirus

Ø ICAI issues norms for auditors to assess going concern, key audit matters

Ø Torrent Power posts loss before tax of Rs 693 crore in Q4 of FY'20

Ø Govt. withdraws order on compulsory wage payment by firms during lockdown

Ø RBI converts less than third of Rs 30,000 cr bonds into long-term paper

Ø Japan concerned over fate of its companies in India

Ø Bharti Airtel reports Q4 net loss of Rs 5,237 crore

Ø Full economic recovery is unlikely in 2021, warns IMF chief

Ø Tata Consumer Products to buy PepsiCo’s stake in NourishCo Beverages

Ø ZF, Belgrave Investment, Odisha mining baron pick up stakes in Suzlon

Ø India Oil Corporation nears first deal to export fuel to Bangladesh: Sources

Ø Cash-strapped India's economic plan unlikely to soften coronavirus blow

Ø Tata Motors offers easy financing option, special benefits for Covid-19 warriors

Ø TidalScale announces reseller agreement with Infosys

Ø Insolvency suspension to bite banks as stressed asset resolution seems distant

Ø SoftBank’s first Vision Fund may be its last after $18 billion loss

Ø Cipla eyes multi-drug portfolio for virus cure

Ø Outlay for rural jobs scheme raised 65% to Rs 1,01,500 crore

Ø Govt. notifies GST law changes, lack of clarity on transitional claims

Ø Now listing on BSE SME to cost less for small businesses as exchange looks to attract more firms

Ø Coal India under financial stress as power sector dues mount

Ø RBI may extend moratorium on repayment of loans for three more months, says report

Ø Japan slips into recession, worst yet to come as pandemic wreaks havoc

Ø Indian government will soon take decision on OCI visa issue: Minister

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👉 In a big relief to cash-starved firms, the government on Sunday said insolvency proceedings against fresh defaulters would remain suspended for up to one year and Covid-19-related debt would be excluded from the definition of default. The breather, however, will potentially hit financial and operational creditors hard and bleed their balance sheet, apart from temporarily depriving them of a credible mode of bad debt resolution. Lenders may be forced to seek regulatory forbearance on provisioning and capital requirements.

Initially, proceedings under the Insolvency and Bankruptcy Code (IBC) can’t be invoked for six months, which can then be extended by another six months, depending on the pandemic situation. There will be a special insolvency framework under section 240-A of the IBC. Already, in a bid to insulate small businesses from being dragged to the NCLT, the default threshold for triggering insolvency has recently been raised to Rs 1 crore from just Rs 1 lakh earlier.

Finance minister Nirmala Sitharaman said an ordinance will be promulgated soon to implement the proposed changes. However, proceedings in the cases already admitted will remain unaffected by the latest move. Data available with the IBBI show, proceedings in 1,961 cases were going on as of December 2019.

Despite risks of a sharp deterioration in credit quality of banks and cash flows of operational creditors due to the suspension of IBC initiation, many experts believe that given the unprecedented crisis, the existence of companies must take precedence over the resolution of stressed assets.

The suspension on fresh initiation of insolvency proceedings for one year is likely to increase provisioning for banks. “The advantage we were getting to refer a case to the National Company Law Tribunal (NCLT) was reversal of additional provisioning, now that option will not be there,” an MD & CEO of a bank who did not wish to be named told FE. According to the June 7, 2019, circular of the Reserve Bank of India (RBI), banks can reverse 20% provisioning for unresolved cases, after referring a case to the NCLT.

👉 Group Insolvency is a process in which claims against debtors of the same group are consolidated in a single resolution application to adjudicate upon by the Adjudicating Authorities ("hereinafter referred as AA"). It was difficult for the AAs across the country to adjudicate upon such resolution requests by the creditors due to the lack of provisions in Insolvency and Bankruptcy Code ("hereinafter referred as IBC"). The Companies Act 2013 itself provides for separate legal entity and preparation of consolidated financial statements of associate and subsidiary companies in the same form. The rule of 'separate legal entity' requires modifications owing to the increase in formation of Corporate Groups in Indian markets. The author in this article analyses the concept of Group Insolvency in brief in the light of judgments and the recommendations put forth by the Working Group formed by the Insolvency Bankruptcy Board of India.

United States Bankruptcy Laws, Bankruptcy Courts have consolidated proceedings along with assets and liabilities of the Debtors on the basis of criteria for substantive consolidation viz.

The degree of difficulty in segregating and ascertaining individual assets and liabilities;

presence or absence of consolidated financial statements;

the profitability of consolidation at a single physical location;

the commingling of assets and business functions;

the unity of interests and ownership between the various corporate entities;

The existence of parent and inter corporate guarantees on loans; and g. the transfer of assets of without formal observance of corporate formalities.

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👉🏻Govt allows Indian public companies to directly list shares overseas

(Govt announced allowing Indian public companies to directly list their shares overseas. Also, Pvt companies that list their debentures on stock exchanges will now not be regarded as listed firms)

👇🏻 👇🏻 👇🏻

https://bit.ly/2zHM613

 

👉🏻Sources and approach for self study of International Taxation

(Sources and approach for self study of International Taxation discussed by CA. Gaurav Singhal)

👇🏻 👇🏻 👇🏻

https://bit.ly/2LzIgK4

👉🏻Collateral Free Automatic Loans for MSMEs

(Collateral Free Automatic Loans for MSMEs announced by Finance Minister discussed by CA. Satuti Mahajan)

👇🏻 👇🏻 👇🏻

https://bit.ly/3dZAR2H

*👉🏻Webinar on Professional Opportunities in Strategising for Survival of MSME*

(CA Sansaar is going to organise Webinar on Professional Opportunities in Strategising for Survival of MSME on *19th May*, 2020 from *04:30 PM* onwards by *CA. Mayur Chokshi* from Mumbai)

👇🏻 👇🏻 👇🏻

https://bit.ly/3g37rD0

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👉 The Hon'ble Prime Minister of India on April 14, 2020 announced the extension of the lockdown till May 03, 2020 in view of containing the COVID 19 infection. Pursuant to the extension, the functioning of the courts have been further suspended. In view of the extension of the nationwide lockdown, the National Company Law Tribunal (hereinafter referred to as 'NCLT') has decided to maintain the status quo as it has decided to continue hearing only unavoidable urgent matters1.

The NCLT had issued a notice on March 22, 2020 whereby it had suspended its judicial work and notified that it would hear only unavoidable urgent matters. Through its notice dated April 14, 2020, the NCLT has now extended the applicability of the earlier notice till May 03, 2020 and has reinstated the points of consideration of the earlier notice.

The notice dated March 22, 2020 had instructed adherence to the following:

All NCLT benches shall remain closed from March 23, 2020 to March 31, 2020 for the purpose of judicial work, and only unavoidable urgent matters shall be heard on application by the aggrieved, through email to the registry NCLT Chennai after service of notice to the other side.

Parties/counsels were abstained from making oral submissions. The NCLT further discouraged persons arriving to NCLT Chennai. The verification had to be carried out through an affidavit.

As regard to the IBC-2016 matters, extension of time, approval of resolution plan and liquidation will not be construed as urgent matters. These matters will be taken up as soon as regular benches start functioning, until such time such application not to be filed.

The notice dated April 14, 2020 further added on the functioning of NCLT during Lockdown. It stated that the President, in addition to the earlier notices, will take further steps depending upon the exigencies of the litigant public and the same will be announced as and when any further decision is taken.

The above notification has arrived on time and has avoided any unforeseen situation or confusion that might have potentially arisen due to non-issuance of the notice. It has further reiterated upon the clarity for urgent matter and their qualification, removing all concerns in this regard whatsoever.

👉 New Delhi, May 18 (IANS) The Delhi Gymkhana Club has told the National Company Law Tribunal (NCLT) it has been facing harassment after it resisted pressure to give membership to a former high ranking member of the Ministry of Corporate Affairs (MCA).

The NCLT on April 24, issued notices to Delhi Gymkhana Club and its general committee (GC) managing its affairs, on a petition by MCA seeking management control of the facility. In its reply before the NCLT, through advocate Gaurav Liberhan, the club said "Insofar as the complaint of Navrang Saini is concerned, it arises out of the Club having resisted pressure to give him membership. The club verily believes that since Saini was a high-ranking member in the MCA, the harassment that the club has been facing from the Department of Corporate Affairs harps back to that episode."

Saini served as a member of the Indian Corporate Law Service (ICLS). He has served the Ministry of Corporate Affairs in various capacities. His last assignment was Director General, Ministry of Corporate Affairs. Saini is currently a Whole Time Member, Insolvency and Bankruptcy Board of India.

The club said that Saini along with other applicants named in the petition had paid the initial principal amount of Rs 10,000. "Their grievance is limited towards the revision of registration fee and not the imposition or the power to impose a registration fee. Needless to say these are facile arguments raised by disgruntled applicants," the club argued in its plea.

The Centre, through an urgent petition moved by MCA, had alleged "fraudulent and rampant mismanagement" by the general committee of the club, besides others, and sought to take over the management control under section 241 and 242 of the Companies Act, 2003. The club has refuted MCA''s allegations that the club''s affairs are being mismanaged by the former''s general committee.

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