Ø Remove colas from sin tax: IBA writes to FM
Ø Digital payments market likely to grow 3-folds
Ø Airlines need large sums to stay afloot: CAPA
Ø APM Terminals Pipavav's board approves Rs 700 cr expansion plan
Ø Norms framed for 'rules of origin' under FTAs
Ø GST: CBIC makes virtual hearing mandatory
Ø Company incorporations hit 7-year high of 16,487 in July: MCA
Ø Critical road infra to place India on par with US, UK in 2 years: Gadkari
Ø SBI, PNB, BoB may go for share sale in FY21 to shore up capital: Report
Ø Aramco sets up corporate development organisation to optimise portfolio
Ø Jindal Aluminium increasing focus on defence, aerospace segments: MD
Ø Govt asks RINL, POSCO to form joint working group for AP steel project
Ø Adani Ports set to get more time to complete Vizhinjam port project
Ø Adanis close to acquiring GVK’s 51% in Mumbai International Airport
Ø CPCL to commission projects worth ₹2,208-cr this fiscal
Ø Centre to hire Deloitte, SBI Capital to help LIC prepare for IPO
Ø Chemists and druggists body calls for boycott of e-pharmacy biz
Ø India-US trade pact in focus ahead of US presidential polls
Ø VC interest in startups declines in April-June
Ø Equity markets under a spell of irrational exuberance
Ø 69 firms allotted land near Jewar airport, Rs. 2,300 cr investment expected
Ø Motherson Sumi aims to triple sales in 5 years
Ø Lenders turn cautious on fresh credit guarantees
Ø Don’t read too much into green shoots, it’s a mechanical rebound: Subbarao
Ø India needs to look at ESG factors to attract major FDI investment: Mukesh Aghi
Ø COVID-19 has led to revival of technology, expertise: Infosys co-founder Nandan Nilekani
Ø Power ministry advises telcos to cap late payment surcharge at 12%
Ø YES Bank signs deal to sell two subsidiaries to Prashant Khemka's GPL Finance
Ø Companies saved at least 25% on wage bill last year
Ø Online higher education tipped to grow ten-fold post-Covid, NEP
Ø Food inflation expected to soften in second half of the current fiscal, says Crisil
Ø Telcos should clear AGR dues: DoT
Ø States stare at uncovered losses of up to Rs 3.1 lakh crore in FY21: SBI report
Ø Kishor Biyani averts a rating downgrade, Future Retail pays Rs 100 crore interest on bonds
Ø Adani Group in talks to buy out GVK and some partners in Mumbai Airport
Ø India, Nepal to expand energy cooperation, explore new pipeline
Ø Gadkari calls for modernising public transport, increasing use of biofuels
Ø Germany plans to generate 'green bonds' worth up to $13 billion this year
Ø Japan's Takeda Pharma sells drugs subsidiary to US Blackstone fund
Ø Singapore's core inflation gauge hits lowest in over a decade due to Covid
Ø ICICI Lombard and Bharti AXA to merge non-life insurance business
Ø ‘India must guard dairy, farm sector in trade pact with US’
Ø RBI should ensure MSMEs get ₹3-lakh-crore more loans at 3.5-4 per cent: Study
Ø Farm profit to rise 3-5% this kharif
Ø MRPL processes Angola, US crudes in 2019-20
Ø ‘Vehicle documents that expired on Feb 1 to be valid till Dec-end’
Ø Allcargo Logistics’ promoters propose intention to delist company's shares
Ø DRDO indentifies list of 108 components that will be designed by Indian industry
Ø Highway traffic returns to 90% of pre-covid levels: ICRA
Ø GST reduced tax rates, doubled taxpayer base to 1.24 crore: Finance Ministry
Ø NIIT Technologies rebranded as Coforge Ltd
Ø Govt, RBI need to share cost of maintaining UPI infrastructure: Report
Ø PNB expects to restructure loans worth Rs 40,000 crore
Ø Govt considering to permit FDI for LLPs in construction development
Ø Railways cancels tender for private trains after bidders reveal prices
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👉 The National Company Law Tribunal (NCLT)'s Mumbai bench has allowed State Bank of India (SBI) to initiate insolvency proceedings against Anil Ambani as personal guarantor after two companies promoted by him failed to pay dues on Rs1,200 crore. This is the first insolvency proceedings against a chief of a business, who have given personal guarantee for obtaining loan.
The NCLT also directed to appoint Jitender Kothari as the resolution professional (RP) in the matter.
In the order, the bench of Janab Mohammed Ajmal and Ravikumar Duraisamy says, "...while an application for corporate insolvency resolution process or liquidation proceedings of corporate debtors are pending before this authority i.e. to say during the pendency of a process of corporate insolvency resolution of the corporate debtors, an application against the personal guarantor shall have to be filed. This itself indicates that the process of corporate insolvency resolution of the corporate debtors in an application relating to insolvency resolution of a personal guarantor needs to be filed and can be prosecuted."
"The law does not envisage that the insolvency resolution of the personal guarantor should follow only when the process of corporate insolvency resolution of the corporate debtor has come to an end. Therefore, the submission that this Authority should wait till the resolution of Reliance Communications Ltd (RCom) or Reliance Infratel Ltd (RITL) is successfully accomplished and the debts of the corporate debtors have been satisfied, would be eristic. It is to be remembered that the present forum is not a recovery forum and has nothing to do with the satisfaction or otherwise of the debts of the corporate debtors," it added.
In 2015, Anil Ambani-promoted RCom and RITL obtained a loan of Rs565 crore and Rs635 crore, respectively from SBI. For obtaining the loan from SBI's project finance strategic business unit, Mr Ambani gave a personal guarantee that was equivalent to the total loan amount or Rs1,200 crore. The loan was disbursed in 2016.
👉 There may not be any immediate relief for creditors and lenders of Sai Infosystem Limited. The Ahmedabad bench of National Company Law Tribunal (NCLT) has refused to entertain a petition for liquidation of assets of the company whose chairman and managing director Sunil Kakkad was arrested in case of a bank scam of Rs 900 crore.
Nine FIRs have been registered against Kakkad since 2015 for getting advances from banks by showing inflated balance sheets, for not paying salary to his employees, etc. The Enforcement Directorate has also initiated criminal proceedings under the Money Laundering Act and attached some of the company’s properties.
The company was sent under the process of liquidation in November last year after banks and corporate creditors initiated a process of bankruptcy and insolvency at the Ahmedabad bench of NCLT. The liquidator also issued a notice for e-auction of some properties to recover debts of the company.
On August 7, the ED issued a notice to the liquidator not to sell any property following which the official liquidator filed a plea.
However, the NCLT bench observed that the liquidator ought not to have started the e-auction as the matter was subjudice. Kakkad was arrested from Liberia in 2017 and is currently in the Sabarmati jail. Recently he had sought bail for 60 days after the SC allowed bail for prisoners facing maximum sentence of up to seven years in wake of Covid-19. He was granted temporary bail of five days.
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⚫India and Uzbekistan reviewed implementation of various key projects as well as initiatives including the status of negotiations for a bilateral investment treaty to boost economic ties.
⚫The atmosphere of mistrust between India and Nepal over border issues has not impacted energy sector cooperation between the two countries as both have decided to explore the possibility of another petroleum pipeline to feed the growing fuel demand in the Himalayan nation.
⚫States might lose Rs 3 trillion in their own revenues this year due to the pandemic & the slow recovery of economic activity. Add to that the share of the Centre’s tax revenues and additional expenditure lost, and states could be staring at a loss of Rs 6.2 trillion in fy 2020-21.
⚫The Covid-19 have changed the structure of the country's oil and gas sector with the share of OPEC crude in Indian oil imports falling to a decade-low level in July.
⚫India is third most affected country by total cases and fourth by death toll, India has added 458,685 cases in the past 7 days alone.
⚫Minors aged between 5 and 17 are most exposed to the novel coronavirus in Delhi, according to a serological survey.
⚫The Ministry of Road Transport and Highways has decided to extend the validity of driving licences and required documents of motor vehicles till December 30, 2020, in wake of the coronavirus.
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👉 Provision for Aadhar Authentication in GST Registration
https://www.gst.gov.in/newsandupdates/read/394
👉 Upcoming Trainings for Taxpayers by GSTN.
https://www.gst.gov.in/newsandupdates/read/395
👉 Reduction of fees for OC & ITT Courses for Foundation and Direct Entry students undergoing Virtual classes - (21-08-2020)
https://www.icai.org/post/reduction-fees-oc-itt-courses
👉 Top cos take on govt over GST anti-profiteering
https://economictimes.indiatimes.com/news/economy/finance/top-indian-companies-take-on-indirect-tax-department-over-gst-anti-profiteering/articleshow/77733460.cms
👉 Govt, RBI need to share cost of UPI infra
https://economictimes.indiatimes.com/news/economy/policy/government-rbi-need-to-share-cost-of-maintaining-upi-infrastructure-report/articleshow/77726264.cms?utm_source=ETTopNews&utm_medium=HP&utm_campaign=TN&utm_content=23
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⚫India needs more global sized banks to help the country achieve $5 trillion economy by 2024-25. SBI at the 55th position is the only bank in the global top 100 list. China has 18 banks while the US has 12 in the list.
⚫Businesses which will provide Aadhaar number while applying for registration under the GST will get the approval in three working days.The CBIC last week notified Aadhaar authentication wef August 21, 2020. It also provides that in case businesses do not provide Aadhaar number, then GSTregistration would be granted only after physical verification of the place of business.
⚫The CBIC has asked GST field offices to conduct hearings in GST appeal cases via video conferencing for their expeditious disposal while ensuring social distancing.
⚫Five large banks, including SBI, PNB and BoB, are likely to sell shares to institutional investors in the second half of this fiscal as they look to shore up their capital base amid the coronavirus pandemic impacting the economy. The banks would get a better picture about their NPAs, one-time loan restructuring and consequent ratings latest by the end of October.
⚫The Union Food Ministry said it has written to all state Govts and union territories to provide subsidised foodgrains to all eligible disabled persons under the National Food Security Act.
⚫India recorded 61,749 coronavirus cases in the past 24 hours, taking its total to 3,105,185. With 846 fatalities the death toll has surged to 57,691
⚫Rains pounded several areas of Gujarat on leading to swelling of rivers and over 100 dams being put on a high alert, while the flood situation in Bihar remained grim even though no new areas were affected by the deluge
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Income Tax
1.) Sec. 41(1) cannot be invoked merely because liability remains outstanding for more than 3 years
PCIT v. Adani Agro (P.) Ltd. - [2020] 118 taxmann.com 307 (Gujarat)
The Assessing Officer (AO) observed that assessee had shown balance in account of a party for 3 years and as debt had become time-barred, such amount was added under section 41(1).
Assessee contended that it had been making payment of professional charges to said party every year. Bill received from said party was credited in his account every year and payment was made in subsequent year. As bill for same amount was raised for all the 3 years, outstanding balance remained same every year. Thus, the liability outstanding at on 31-03-2012 was out of current and year and not out of earlier years. Hence, such an amount could not be added under section 41(1). Further, said amount was not written back in profit and loss account, hence even on that ground additions could not be made.
CIT(A) reversed the order of AO by relying on the decision of CIT v. Nitin S. Garg 208 taxman 16 (Gujarat). Under the said judgment, Gujarat HC held that once assessee had continued to show admitted amounts as liabilities in its balance sheet, the same could not be treated as a case of cessation of liabilities merely because liabilities were outstanding for last many years, it could not be inferred that such liabilities had ceased to exist. ITAT upheld the order of CIT(A).
On appeal, Gujarat HC held that as per provisions of section 41(1), there has to be remission or cessation of trading liability. Merely because liability has remained outstanding for more than 3 years and same is not written back in profit and loss account, application of section 41(1) could not be made to consider such liability as income of the assessee without there being any remission or cessation of liability.
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GST Update
1.) Levy of Entertainment Tax by municipality is constitutionally valid under GST regime: Madras HC
Balaji Theatre v. Chief Secretary - [2020] 118 taxmann.com 160 (Madras)
The assessee runs Cinema theatre. It has challenged the order of Municipality directing to pay Entertainment Tax. The assessee submitted that after introduction of GST, admission to Cinema halls is treated as supply of service which is chargeable to GST under the GST legislation. Thus, a separate Entertainment Tax cannot be collected by the Municipality, particularly when the collection of tax by the Municipality stands annulled.
The Hon’ble High Court observed that Puducherry Municipalities Act, 1973, is an enactment, which is still in force empowering the Municipal Council to impose a ‘tax on entertainment’. The power so conferred on the Municipal Council to collect various taxes has not been totally taken away or subsumed under the Puducherry Goods and Services Tax Act, 2017 (‘PGST Act’). Under Section 173 (1) of the PGST Act, the Legislature have consciously retained the power of the Municipal Council to collect tax on various subjects including tax on entertainment.
It has further been provided that service tax and entertainment tax is under different enactment by different authorities. Admission into the Cinema theatre is treated as service on which GST is levied. On such admission, the viewer gets the entertainment on which tax is levied by the local authorities as ‘Entertainment Tax’. Thus, the entertainment itself being a different content, will not fit into the act of service provided by the theatre owner viz., admission of the viewer into the cinema hall. Therefore, the question of subsuming the entertainment tax under the PGST Act, shall not arise in this case, so long as the Puducherry Municipalities Act, 1973, is in force and not repealed by the introduction of the PGST Act.
On the Constitutional aspect, the High Court has provided that Entry 62 of the State List of the Seventh Schedule of the Constitution of India, as amended by the Constitution (101 Amendment) Act, 2016, provides that the taxes on luxuries including the taxes on entertainment, amusements, betting and gambling are taxes authorized by law and the authorities empowered under the relevant provisions of law to collect the said taxes are justified in doing so. Therefore, going by the above constitutional provision the collection of the entertainment tax by the Municipality is within their power, competence and with authority of law.
In the above backdrop, it has been held that Municipal Council can collect Entertainment Tax even after introduction of the PGST Act
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2.)IIPM director Arindam Chaudhari held for evading tax in Pre-GST regime
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3.)CBIC Makes Virtual Hearing Mandatory For Speedy Disposal Of GST Appeal Cases Amid COVID-19
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Corporate Law
1.) Petition for reduction of share capital was to be allowed when all shareholders unanimously approve such reduction
Better World Technology (P.) Ltd., In re - [2020] 118 taxmann.com 239 (NCLT - Mum.)
The Petitioner - company was engaged in business of software development and maintenance for employee benefits etc. The Petitioner stated that shareholders of the petitioner - company unanimously approved special resolution for reduction of share capital of the petitioner - company.
This instant petition was filed for confirmation of said special resolution passed by shareholders of the petitioner - company for reduction of paid up equity share capital.
The NCLT noted that Articles of Association of the petitioner - company empowered it to reduce its share capital in any manner for time being authorized by law, by passing a special resolution.
No objector had come before instant Tribunal to oppose instant petition nor had any party controverted any averments made in petition. In view of facts that all shareholders had approved reduction including shareholders whose shares were being cancelled, instant petition for reduction of share capital was to be allowed
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📢The ESI Corporation during its 182nd meeting held late yesterday has taken some very important decisions towards improvement in its service delivery mechanism and providing relief to workers affected by Covid-19 pandemic.
Following important decisions were taken during the meeting:
👩🏻🎓 ESIC is implementing the Atal Bimit Vyakti Kalyna Yojna under which unemployment benefit is paid to the workers covered under ESI Scheme.
👨🏻🎓 The eligibility criteria for availing the relief has also been relaxed, as under:
a. The payment of relief has been enhanced to 50% of average of wages from earlier 25% of average wages payable upto maximum 90 days of unemployment.
b. Instead of the relief becoming payable 90 days after unemployment, it shall become due for payment after 30 days.
c. The Insured Person can submit the claim directly to ESIC Branch Office instead of the claim being forwarded by the last employer and the payment shall be made directly in the bank account of IP.
d. The Insured Person should have been insurable employment for a minimum period of 2 years before his/her unemployment and should have contributed for not les than 78 days in the contribution period immediately preceding to unemployment and minimum 78 days in one of the remaining 3 contribution periods in 02 years prior to unemployment.
👩🏻🎓 The ESI Corporation has decided to extend the scheme for one more year upto 30th June 2021.
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⚫Investments through P-notes in the domestic capital market soared to Rs 63,288 crore till the end of July, making it the fourth consecutive monthly rise. P-notes are issued by registered FPIs to overseas investors who wish to be part of the Indian stock market without registering themselves directly.
⚫State-owned Software Technology Parks of India expects to have the largest ecosystem of incubating new technologies in the country by setting up 21 centres of excellence.
⚫The RBI is at the end of its rate cut cycle as inflation is unlikely to decline materially from the current level, and the onus of economic recovery has now shifted to the Govt.
⚫The RBI suggested bringing down the Govt’s stake in six leading PSBs to 51% over the next 12 to 18 months. This, the regulator feels, will give a much-needed push to the Govt’s disinvestment efforts.
⚫The southwest monsoon has come back roaring in August, not only wiping off the deficiency but also pushing the cumulative rainfall to 7% more than normal till date.
⚫The flood situation in Bihar remained grim on Friday with an additional 1.13 lakh people bearing the brunt in 16 districts in the past 24 hours, taking the total number of affected people to 82.92 lakh.
⚫Union Minister said that the country will have a vaccine against the deadly coronavirus by the end of the year. India currently has three vaccine candidates for Covid-19 -- ChAdOx1, developed by Oxford University, manufactured jointly by the Serum Institute of India and AstraZeneca; Bharat Biotech's Covaxin, jointly developed with the ICMR, and the third is ZycovD by Zydus Cadila.
⚫A major terror strike was averted with the arrest of a suspected operative of the ISIS, armed with two pressure cooker IEDS, from central Delhi's Ridge Road area following a brief exchange of fire, Delhi Police said
⚫SEBI’s decision to appoint GP Garg as ED has sparked a "strong protest" from the market regulator’s employee association, which has objected to the practice of appointing outside persons or those from non-core streams.
⚫India is poised to hire Deloitte & SBI Capital Markets Ltd. to help LIC of India prepare for an initial share sale.The Govt is keen to go ahead with the IPO, potentially India’s biggest to help plug a widening budget gap.
⚫The country recorded 69,878 new coronavirus cases in the last 24 hours, taking the total tally to 29,75,70.
During this period, 945 people lost their lives due to Covid-19 infection, taking the death toll to 55,794.
⚫CBI registered a case against KS Oils, based at Morena and others including its MD, Promoter, Director and unknown others on a complaint from SBI regarding a bank fraud of Rs 938.81 crore.The searches were being carried out at the office premises of KS Oils Ltd on Delhi's Barakhamba Road, as also of its Managing Director and promoters.
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