⚫Operating profits of mfg firms declined in the Jan-Mar 2019-20 on account of lower sales, as per a Reserve Bank analysis of listed non Govt non-financial co's. The operating profits of services co's decelerated due to moderation in sales growth during the last quarter of 2019-20
⚫The I-tax dept will soon start sending out intimation to assessees undergoing scrutiny that such cases would now be handled under faceless assessment. Domestic transfer pricing cases too will be covered under the faceless assessment mechanism.
⚫The RBI is unlikely to extend the moratorium on repayment of bank loans beyond August 31 as an extension could impact the credit behaviour of borrowers without resolving the issues being faced by them following the outbreak of the Covid-19.
⚫More than 40.35 crore people benefited from the Pradhan Mantri Jan Dhan Yojana which was launched six years ago as a national mission for financial inclusion.
⚫EPFO said it has settled 46 lakh EPF withdrawal claims and disbursed Rs 920 crore to its subscribers to meet exigencies due to the COVID-19 situation.
Under Pradhan Mantri Garib Kalyan Yojna.
⚫The Supreme Court held that no state or university can promote students in the final year without holding exams as per the guidelines of University Grants Commission.
⚫Food safety regulator FSSAI said it has collected 4,500 samples of edible oils from across the country for quality testing, a move aimed at curbing sale of adulterated cooking oils in the market.
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State Bank Of India Vs. M/S Metenere Ltd. – SC
Case Citation : [2020] ibclaw.in 17 SC
Supreme Court held that the order passed by NCLAT in the matter whether an ex-employee of the Financial Creditor having rendered services in the past, should not be permitted to act as IRP at the instance of such Financial Creditor, regard being had to the nature of duties to be performed by the IRP & RP does not reflect the correct approach, the same shall not be treated as a precedent.
https://ibclaw.in/state-bank-of-india-vs-m-s-metenere-ltd-sc/
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👉 Amendment of item no. (ix) in the Schedule VII of the Companies Act, 2013.Pdf(1.1 MB)
http://www.mca.gov.in/Ministry/pdf/NotificationCompAct_26082020.pdf
👉 Amendment of the Companies (CSR Policy) Rules, 2014 of the Companies Act, 2013.Pdf(1.1 MB)
http://www.mca.gov.in/Ministry/pdf/csr_26082020.pdf
👉 Release of New Compendium of Indian Accounting Standards (Ind AS) as on April 01, 2020
https://www.icai.org/post/release-new-compendium-indas-2020
👉 Hosting of updated Ind AS related Guidance material on ICAI website - (27-08-2020)
https://www.icai.org/post/indas-related-guidance-material
👉 Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS) applicable for Standard-setting Activity from accounting periods beginning from April 1, 2020, and for the preparers of financial Statements from a future date - (28-08-2020)
https://www.icai.org/post/conceptual-framework-financial-reporting-indas
👉 Notification no 1- CA (7)/ (194) /2020 for setting up a Branch of SIRC in Chengalpattu District under Regulation 159 (1A) of the Chartered Accountants Regulations, 1988 - (28-08-2020)
https://resource.cdn.icai.org/60925rba49582.pdf
👉 RBI Announces Special Open Market Operations (OMOs) of Simultaneous Purchase and Sale of Government of India Securities
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50252
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👉 The National Company Law Appellate Tribunal (NCLAT) on Friday set aside the insolvency proceedings initiated against Telangana-based Sarda Agro Oils citing that claims were filed by the lender three years after declaring the account as a non-performing asset.
The ruling comes nearly a year after the Hyderabad bench of the National Company Law Tribunal (NCLT) admitted a plea from Allahabad Bank for insolvency proceedings against the company.
In an order, a three-member bench of the NCLAT said the date of default is computed from the date of declaration of account as a NPA (Non Performing Asset) and such date of default would not shift.
It will be "impermissible to proceed with Section 7 application," filed by the bank which is after the limitation period of three years, the order said.
Under Section 7 of the Insolvency and Bankruptcy Code (IBC), a financial creditor can get insolvency proceedings initiated against the corporate debtor concerned.
The NCLAT's ruling has come on a petition filed by Sarda Agro Oils' Managing Director Jagdish Prasad Sarada challenging the NCLT order.
The appellate tribunal observed that the appellant's account was declared as NPA on September 30, 2015 by the bank after irregular repayments. Then, it filed a application under Section 7 of the IBC initiate insolvency proceedings on December 31, 2018.
"We are of the firm view that the determining factor is the three years period from the date of default/ NPA," the NCLAT bench, headed by Acting Chairperson Justice B L Bhat, said.
According to the NCLAT, the Supreme Court has also held that the limitation period for application under Section 7 of the IBC is three years as provided by the Limitation Act, 1963 and is extendable only by the application of Section 5 of Limitation Act, 1963 if any case for condonation of delay is made out. Section 5 pertains to extension of the stipulated period.
The appellate tribunal has directed the NCLT to close the Corporate Insolvency Resolution Process (CIRP) initiated against Sarda Agro Oils and set aside the appointment of resolution profession, declaring all consequential action taken by him as "illegal".
👉 The national company law appellate tribunal (NCLAT) has rejected an appeal moved by Empee Distilleries challenging its takeover by SNJ Distilleries.
Dismissing the appeal moved by Shaji Purushothaman, promoter of Empee Distilleries, the bench comprising acting chairperson Justice Bansi Lal Bhat, technical members VP Singh and Alok Srivastava said, “It is manifestly clear that the commercial wisdom of the committee of creditors in regard to viability and feasibility of the resolution plan is final and this appellate tribunal cannot substitute its view for the commercial wisdom of the committee of creditors.”
Evaluation of the financial matrix, feasibility of the plan and its viability are areas falling within the ambit of business decision based on commercial wisdom of the committee of creditors and inquiry in appeal before this Alappellate tribunal is limited to the grounds under Section 61(3) of the Insolvency and Bankruptcy Code, the NCLAT said.
The issue pertains to an order passed by the national company law tribunal (NCLT) dated January 20, clearing the Rs 475 crore takeover deal of Empee by SNJ.
Due to financial burdens incurred by Empee, Union Bank of India dragged the company to NCLT under corporate insolvency resolution process to come out with a restructuring package. In the process, SNJ emerged as a successful bidder for Empee which was approved by the NCLT.
Aggrieved, Purusothaman moved the appellate tribunal contending that his Rs 513 crore settlement proposal to lenders was arbitrarily rejected by the NCLT. Refusing to concur, the appellate tribunal observed that the petitioner’s settlement plan was rejected by lenders due to its structural layout and inability to satisfy them with regards to generation of funds.
“Ambiguity in regard to generation of funds for translating the settlement plan into action as also in regard to specific schedule of payment to various stakeholders being writ large on the face of the proposed settlement plan, it has met the inevitable fate of rejection at the hands of committee of creditors,” NCLAT said.
However, a cursory look at the resolution plan of committee of creditors reveals that apart from being viable it also takes care of the various stakeholders with financial creditors, workmen and employees and the statutory dues having their debt settled at 100% and operational creditors intended to be settled at 100% being currently paid 59% of their debts.
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All about Equalisation Levy
Equalisation Levy was introduced in India in 2016 via Chapter VIII of the Finance Act 2016, with the intention of taxing the digital transactions i.e. the income accruing to foreign e-commerce companies from India. It is aimed at taxing business to business transactions.
Why Equalisation Levy?
Over the last decade, Information Technology has gone through an exponential expansion phase in India and globally. This has led to an increase in the supply and procurement of digital services. Consequently, this has given rise to various new business models, where there is a heavy reliance on digital and telecommunication networks.
As a result, the new business models have come with a set of new tax challenges in terms of nexus, characterization and valuation of data and user contribution. The combination of inadequacy of physical presence-based nexus rules in the existing tax treaties and the possibility of taxing such payments as royalty or fee for technical services creates a fertile ground for tax disputes.
Applicable to following:
Equalisation Levy is a direct tax and same like TDS, which is withheld at the time of payment by the service recipient. The two conditions to be met to be liable to equalisation levy:
The payment should be made to a non-resident service provider;
The annual payment made to one service provider exceeds Rs. 1,00,000 in one financial year.
Not applicable to Following:
The annual payment made to one service provider less than Rs. 1,00,000 in one financial year.
Service receiver or deductor register in J&K.
Payer having PE in India.
Service other than special services mention in list.
Services cover under Equalisation Levy:
Online advertisement;
Any provision for digital advertising space or facilities/ service for the purpose of online advertisement;
As and when any other services are notified will be included with the aforesaid services.
Tax rate under Equalisation Levy:
Currently the applicable rate of tax is 6% of the gross consideration to be paid.
Due date of payment
To be deposited to before 7th of next month, means if you deducted Equalisation leavy on April 2020 you need to deposit the same on or before 7th of next month.
Due date of furnishing Equalisation Levy Statement (Form-1) is on or before 30th June of Financial Year ended. This is the annual statement.
Consequences:
Equalisation Levy not deducted: Penalty equal to the amount of levy failed to be deducted (along with interest and depositing of the principal levy outstanding).
Equalisation Levy deducted but not deposited: Penalty equal to INR 1,000/day subject to the maximum of the levy failed to be deducted (along with interest and depositing of the principal levy outstanding).
Disallowance of such expenditure in the hands of the payer (unless the defect is rectified).
Penalty for fail to file statement INR 100/day for each day the non-compliance continues.
Prosecution for false statement has been filed then the person may be subjected to imprisonment of a term up to 3 years and a fine.
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⚫The Home Ministry issued the Unlock 4 guidelines under which metro trains will be allowed to resume services from September 7 in a graded manner, while political, social and religious congregations of up to 100 people will be permitted from September 21. However, schools, colleges and other educational and coaching institutions will remain closed for students till Sept 30, with some relaxations for students of classes 9 to 12.
⚫The ED said it has unearthed an online betting scam that involved Chinese nationals and used payment wallets such as Paytm, Cashfree and Razorpay to make remittances worth Rs 1,200 crore in India and abroad.The ED’s action is the part of a money laundering probe initiated after a first information report registered by the cyber cell unit of Hyderabad Police.
⚫States will have to bear the interest burden if they decide to borrow the entire Rs 2.35 trillion shortfall estimated in GST revenue: that’s the second option the central Govt has proposed to raise resources to compensate states amid inadequate cess collection.
⚫India reported an increase of 76,472 in its total count of confirmed coronavirus cases. With this, the country’s total Covid-19 case tally reached 3,463,972, and 1,021 fatalities pushing its death toll to 62,550. It is now the third most affected country by total cases, second by active cases, and fourth by death toll.
⚫The Ram Janmbhoomi Babri Masjid land dispute was the "most fiercely contested cases in India's legal history" in which every point was "hotly" debated and "passionately" argued by the lawyers, former Chief Justice of India Ranjan Gogoi, who headed the bench that delivered the historic verdict, has said.
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✅ GST Updates
🎯Import Data in Form GSTR-2A
1. Two New Tables inserted in Form GSTR-2A (Part-D).
2. Details of Import of goods from overseas and from SEZ units/developers.
3. Taxpayer can see Bill of entry received by GSTN from ICEGATE.
4. Upload data (upto 06-08-2020) in Trial basis by GSTN.
5. Not contain bill of entries filed at non-EDI ports and imports through courier services/post office.
6. Share your feedback (raising a ticket) on https://selfservice.gstsystem.in/
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GST Update:
GSTR 2B Advisory: All you need to Know
1. CBIC has come up with an advisory module of admissible Input Tax Credit at the hands of Taxpayer based on details uploaded by the supplier in their respective GST Returns.
2. Data in GSTR 2B will flow from following types of returns filed by Supplier:
A) GSTR 1 (Statement of Outward supply by regular taxpayer),
B) GSTR 5 (Registered Non Resident) and
C) GSTR 6 (Input Service Distrubutor)
3. GSTR 2B shall be a static document i.e the value in GSTR 2B generated will not change once populated, which shall be generated on monthly basis irrespective of whether supplier is filing returns on monthly or quarterly basis.
4. GSTR 2B will be generated on 12th of every month which shall capture data reported by respective suppliers during the period12th of previous month till 11th of current month. Eg. July 20 GSTR 2B will shall generate on 12th August,20 shall capture data reported by respective supplier during the period from 00.00 hrs 12th July,20 to 23:59 hrs of 11th August,20
5. GSTR 2B shall capture following Data reported by respective supplier:
A) ITC from registered supplier's (other than RCM)
B) ITC from input service distributor
C) ITC from registered supplier's under RCM
D) ITC on Import of Goods
E) Credit Notes and Amendments in Invoices
6. The module is on trial basis and going forward it may replace GSTR 2A for the purpose of calculation of ITC under Rule 36(4) because of following limitations:
A) GSTR 2A is a dynamic documents and therefore ITC of recipient cannot be locked for a particular month.
B) GSTR 2A does not bifurcate ITC between eligible and not eligible category which this module does.
C) GSTR 2A does not analyse and populate ITC blocked due to place of supply or time barred
D) GSTR 2A does not lists the ITC reversal in the manner GSTR 2B does.
7. Details of GSTR 2B shall be available online or through offline utility, which should be reconciled with the ITC availed as per books.
Conclusion:
GSTR 2B is nothing but a new version of GSTR 2A which is static and represents the data on monthly basis. As of now Rule 36(4) is linked to GSTR 2A but we can assume that after a while this can be amended to be linked to GSTR 2B considering the data analytics auto populated in GSTR 2B which is more reader friendly as compared to GSTR 2A
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