31 August 2020 News and Updates

Ø  Fiscal deficit to touch 7% in FY21, says Brickwork Ratings, as revenue collection hit by lockdown

Ø  HCL's US arm faces patent infringement claim

Ø  Banks told to refund fees for UPI transactions

Ø  Nestle says consumer behaviour changing

Ø  Lenders hope their loans will be repaid in full after Reliance-Future Group deal

Ø  GAIL India looks at petrochemicals, renewables for growth

Ø  Refund charges imposed on e-payments since Jan this year: CBDT to banks

Ø  Farm sector sees spike in private investment after reforms: Agri secy

Ø  Second blow for BoB as RBI rejects plan to send Anil Ambani firms to NCLT

Ø  Amazon to stick on as Future Enterprises' shareholder after Reliance deal

Ø  Telecom sector revenue expected to rise 15% in FY21 on higher ARPU:

Ø  RBI rejects lenders’ plea to put Reliance Home Finance, Reliance Commercial under NCLT resolution

Ø  Massive data breach reported at Paytm Mall

Ø  WTO dispute on ICT products: India claims EU, Taiwan violating due procedures on dispute panellists

Ø  Reliance Capital defaults on interest payments to HDFC, Axis Bank

Ø  FPIs remain positive on Indian markets; invest ₹47,334 crore in August so far

Ø  ABB Power increases open offer price marginally after investor complaints

Ø  ESAF Small Finance Bank to take call on ₹976-crore IPO after Sept: MD

Ø  India, ASEAN trade ministers call for starting discussions to determine FTA review scope

Ø  Probe Chinese investments in 141 prominent Indian startups: CAIT asks Piyush Goyal

Ø  Boat Lifestyle eyes Rs 1,000 cr revenue in FY24

Ø  COAI predicts 14-15% increase in Telecom Industry’s revenues

Ø  ED raids firms running Chinese betting apps, freezes bank accounts

Ø  Pandemic gives fillip to demand for cereals; 200 per cent rise in exports in July

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COVID-19: ICAI issues relaxation for provisionally registered students in the Intermediate Course till 31st July, 2020

Read more at: https://www.taxscan.in/covid-19-icai-issues-relaxation-for-provisionally-registered-students-in-the-intermediate-course-till-31st-july-2020/71513/

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⚫The Govt should not be running airports and airlines, Civil Aviation Minister said adding that he hopes to privatise Air India during 2020. His remarks come at a time when the Kerala Govt has opposed the Cabinet's approval to lease out the Thiruvananthapuram airport to Adani Enterprises under the  PPP model for a period of 50 years.

⚫Paytm Mall, the e-commerce arm of unicorn Paytm, has suffered a "massive" data breach and a cybercrime group has demanded ransom as it has gained unrestricted access to the platform's entire database, according to a report by cyber security intelligence firm Cyble. 

⚫Govt asks ministries to review performance of staffers aged over 50. Older, inefficient employees may be pushed into early retirement

⚫The I-Tax dept asked banks to refund the charges collected on or after January 1, 2020, on transactions carried out through electronic modes like RuPay cards or BHIM-UPI and also advised banks not to impose any charges on any future transactions carried out through these modes.

⚫The Pension Fund Regulatory & developmt Authority is working on a minimum assured return based pension scheme. The pension authority is in talks with pension funds and actuarial firms to work out the modalities of the proposed scheme.

⚫The country reported its biggest daily spike of 78761 to take its total count of confirmed cases to 3542733. With 948 deaths being reported in 24 hours, the total numbers of fatalities in India due to Covid-19 reached 63498.

⚫As BPCL braces for privatisation, workers worry about their future. Older workers are headed for the VRS exit in larger than expected numbers even as unrest stirs over wage settlements.

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GSTR-2B has been launched on the GST Portal from July 2020 onwards.

It is not a Return but a static report of GSTR2A of invoices uploaded by supplier *uptil 11th of the subsequent month.

Thus it’s similar to GSTR-2A with some exceptions.

Key features of GSTR-2B:

• It is an auto-populated static ITC statement which will clearly show “ITC available and not available” for every invoice monthly.

• It will be updated once a month on 12th of every succeeding month.

For example, GSTR-2B generated on 12th September 2020 shall contain invoices uploaded and filed by suppliers between 12th August 2020 to 11th September 2020.

• GSTR-2B also contains info on Imports from other countries and SEZ’s

• Invoices will be marked as ITC Not Available in two cases:

A. If the supplier files the invoice after 30th September of succeeding year of invoice i.e. Section 16(4).

B. If POS is different from the recipient state.

• GSTR-2B provides an option to search invoice and to request statement over an e-mail.

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GST QUERIES

Q1. What is the time limit specified in GST law to issue debit note? Understand there is no end timeline but what is the right time as per to issue Debit note.

✅ There is no such provision in law specifying the right time to issue debit note. 

Q2. I have a query, one of my client who has availed credit by taking ITC in 3b subsequently he found that it was intelligible instead of reversing in3b they have offset the reversal amount in books ITC and claimed only net in 3 b in the subsequent year what will be the impact of this

✅ In our opinion the correct way to reversal the credit is by showing it under Table 4B of GSTR-3B instead of reducing from the credit especially when it pertains to other Financial year.  

Q3. ITC for FY 2019-20, wrongly claimed in 3b of Telangana instead of Maharashtra...can it be corrected in annual return?

✅ The time limit for availment of credit as per the provisions of Section 16(4) of CGST Act is the due date of filing the GST l Return for the month of September of the next financial year to which this invoice elate or the date of filing the annual return for that financial year,whichever is earlier. There is no time limit for reversal of credit. Since the time for claiming credit for FY 2019-20 is the due date of filing return of September 2020, the mistake can be rectified by availing credit in the state of Maharashtraand reversal has to be done in the state of Telangana along with interest.

If you wish to rectify through annual return then credit cannot be claimed in the state of Maharashtra but it is to be reversed in the state of Telangana along with payment of Interest.   

Q4. A taxable person supplied services to a PSU. He believed that these were exempted from 2017-2018. At the time of filing of 9C for 17 18,objection was raised by auditor that these services are not exempt. They paid the full tax using DRC-03. Now can the service provider issue tax invoices now (as he has not done till now as per Rule 46) and pass on the tax to the recipient?

✅ If the service provider intends to issue tax invoices in order to pass on the tax to the recipient it would be of no help. As per the provision of Section 16(4) which is given here for quick reference, credit cannot be availed by recipient for the Financial Year 2017-18.

“A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.”

Q5. There is query for export...

Invoice date is of July 2020 and Shipping bill date for export is of Aug 2020

(1) Is it part of GST return of which month July 2020 or Aug 2020?

(2) In tally also in which month to be entered July 2020 or Aug 2020?

✅ Invoice Date of July 2020 is to be considered in the case of both GST return (to be reflected in the month of July 2020 itself) and tally as well.

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✅ GST Updates

🎯10 GST Deadlines ends on 31st Aug, 2020

Due to Pandemic Situation and after Hon'ble FM Ms. Nirmala Sitharaman Ji "Cororna is an act of God" and loss of business, there is time now most of GST compliances deadlines ends on today 31st August, 2020 to avoid Late Fees, Interest and Penalties.

Deadlines are:

1. Letter of Undertaking (LUT)* FY 2020-21: Notification No. 55/2020 Letter of Undertaking (LUT) is a document that exporters can file to export goods or services without having to pay taxes. Any registered person can furnish LUT in form GST RFD 11 and export goods without the payment of integrated tax.

2. Refund Application FY 2017-18: Online thru Form GST RFD-01

3. GSTR-4 (FY 2019-20): Filed by Composition Taxable Person (Notification No. 59/2020).

4. ITC 04: ITC-04 is related to job worker and submitted by the principal every quarter. Last date of ITC 04 of the 4th quarter of 2019-20 and first quarter of 2020-21 is 31st August, 2020. (Notification No. 55/2020 dated 27.06.2020).

As per Notification No. 55/2020 dated 27.06.2020, due date for the month of March 2020 to July 2020 is extended to 31st August, 2020 (Point No. 5 to 9).

5. GSTR-5: Filed by Non- Resident taxable person. 

6. GSTR-5A: Filed by the OIDAR service providers. 

7. GSTR-6: Filed by Input Service Distributors (ISD). 

8. GSTR-7: Filed by TDS deductor. 

9. GSTR-8: Filed by E-commerce Operator.

10. Other GST compliances (except few provisions covered in exclusion clause of N.N 55/2020-CT dated 27.06.2020) which falls during the period 20.03.2020 to 30.08.2020 and which has not been made.

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GST Deadlines are:31/8/202

1. Letter of Undertaking (LUT) FY 2020-21: Notification No. 55/2020 Letter of Undertaking (LUT) is a document that exporters can file to export goods or services without having to pay taxes. Any registered person can furnish LUT in form GST RFD 11 and export goods without the payment of integrated tax.

2. Refund Application FY 2017-18: Online thru Form GST RFD-01

3. GSTR-4 (FY 2019-20): Filed by Composition Taxable Person (Notification No. 59/2020).

4. ITC 04: ITC-04 is related to job worker and submitted by the principal every quarter. Last date of ITC 04 of the 4th quarter of 2019-20 and first quarter of 2020-21 is 31st August, 2020. (Notification No. 55/2020 dated 27.06.2020).

As per Notification No. 55/2020 dated 27.06.2020, due date for the month of *March 2020 to July 2020 is extended to 31st August, 2020 (Point No. 5 to 9).

5. GSTR-5: Filed by Non- Resident taxable person. 

6. GSTR-5A: Filed by the OIDAR service providers. 

7. GSTR-6: Filed by Input Service Distributors (ISD). 

8. GSTR-7: Filed by TDS deductor. 

9. GSTR-8: Filed by E-commerce Operator.

10. Other GST compliances (except few provisions covered in exclusion clause of N.N 55/2020-CT dated 27.06.2020) which falls during the period 20.03.2020 to 30.08.2020 and which has not been made.

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LEGAL KNOWLEDGE CAPSULE

✒️ Supreme Court has imposed a fine of rupee one in contempt case against Prashant Bhushan over his two controversial tweets against the judiciary.

✒️ Ministry of Corporate Affairs has notified that every company shall place a copy of the annual return on the website of the company, if any, and the web-link of such annual return shall be disclosed in the Board's report.

✒️ Supreme Court has held that gas regulating, measuring equipments installed at customers site is a taxable service.

✒️ Allahabad High Court in its judgement has held that right to practise and propagate religion is subject to public order, morality and health.

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30 August 2020 News and Updates

⚫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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28 August 2020 News and Updates

Ø  G-20 goods trade decline to lowest since 2009

Ø  Initiate guarantor insolvency: Govt to PSBs

Ø  Infra-focused stimulus key to recovery: EY

Ø  Walmart joins Microsoft in pursuit of deal to acquire TikTok

Ø  India-ASEAN can resolve differences, take trade to $300 billion: Piyush Goyal

Ø  Expecting moderate growth in subscription revenue, ad revenue may fall in FY21: ZEEL

Ø  RBI still has enough firepower left to handle the situation: Governor Das

Ø  India fuel demand headed for 5-year low as truck operators idle vehicles

Ø  Sebi directs PMS providers to share commission details with clients

Ø  GMR Infra to demerge energy, transport businesses; list airports separately

Ø  Steel firms set to raise prices from Sept on higher costs, global prices

Ø  CII tells Centre to put on hold liquidity infusion to AP discoms

Ø  Himatsingka Seide posts ₹140-cr loss in Q1

Ø  Covid-19: NMDC’s net plunges 55% at ₹533 crore in Q1; production takes a hit

Ø  Zydus Wellness approves ₹1,100-crore fund-raising

Ø  Covid-19: FDA gives emergency approval to Abbott’s $5 test

Ø  PAG to buy 51% stake in Edelweiss Wealth Management with ₹2,200 cr investment

Ø  Hindustan Syringes to scale up production to 1 bn to meet covid vaccine demand

Ø  E-commerce retail market expected to cross $100-billion mark by 2024

Ø  COVID-19 impact: 'Economy may contract', FM Sitharaman says during GST meet

Ø  Piyush Goyal launches national GIS-enabled land bank system

Ø  SBI chief Rajnish Kumar hopes for lesser number of debt recast requests from corporates

Ø  Realty sector to witness up to 60% decline in residential sales volume in FY21: Icra

Ø  Delhi High Court stays insolvency resolution proceedings against Anil Ambani

Ø  India needs to create 90 million jobs by 2030 to avoid economic stagnation

Ø  Government to forego Rs 46,000 crore of interest on delayed GST payment

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LEGAL KNOWLEDGE CAPSULE

✒️ Supreme Court has observed that failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a *deficiency' .In cases where there is a gross delay, the jurisdiction of the consumer forum to award just and reasonable compensation is not constrained by the terms of a rate in builders agreement.

✒️ Rajasthan High Court on Wednesday granted a week's time to the Central Government to file a progress report on the drafting of rules for implementation of the contentious Citizenship Amendment Act, 2019 (CAA)

✒️ Supreme Court has warned to initiate contempt proceedings upon learning that the Indian Institute of Technology, Bombay (IIT Bombay) had backed out from completing the Smog Tower project which would help Delhi fight its pollution 

✒️ Rajasthan High Court has set aside the order of the Speaker which rejected the Petition submitted by Bhratiya Janta Party Member of Legislative Assembly, Madan Dilawar seeking the *disqualification of 6 Bharatiya Samaj Party Members of Legislative Assembly who had merged with the Congress in 2019.

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⚫Covid-19 likely to impact 5% IT employees in India, take away 200,000 jobs. The Indian IT and BPM sector employs around 4.4 million people, directly and indirectly.

⚫The States have assured the Centre that they will utilise the Rs 1 lakh crore agriculture infrastructure fund to create post-harvesting and other facilities at village level for the benefit of farmers, especially small and marginal ones.

⚫The states accused the Centre of arm twisting them to borrow, terming it a ‘betrayal of federalism. Despite being given 7 days to examine the two options offered by the Centre, they turned those down minutes after the meeting concluded. Most states pressed for borrowing by Centre to compensate them for the shortfall in collections. During the meeting, the Centre gave the states the option to either borrow Rs 97,000 crore or the entire Rs 2.35 trillion that accounts for the excess shortage in view of the Covid disruption. 

⚫The Govt has kicked off the disinvestment programme with defence manufacturer Hindustan Aeronautics. The Rs 5000 crore offer for sale saw oversubscription in the institutional investor segment. About 10 million shares reserved for retail investors will be auctioned on Friday.

⚫Visas granted to Indian nationals to study at universities in the UK have more than doubled over the past year.

⚫The Russian president  praised a coronavirus vaccine that Russia approved for use earlier this month as effective and safe, a clear bid to address international skepticism about the shots that have only been studied for two months in a few dozen people.

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👉  In what may lead to a long drawn legal battle, Walmart-owned Flipkart has moved the Supreme Court challenging the National Company Law Appellate Tribunal’s (NCLAT) March order which directed the Competition Commission of India (CCI) to launch a probe against the e-commerce firm on alleged charges of abuse of dominant position.

The tribunal had ordered a probe after setting aside the CCI’s 2018 order which had absolved Flipkart of such allegations levelled by the All India Online Vendors’ Association (AIOVA).

The AIOVA had filed a caveat in March itself in the Supreme Court, anticipating that Flipkart may move to apex court at some stage. This means that when the SC decides to hear the case, it would have to listen to the case put forward by AIOVA.

Both Flipkart and AIOVA did not respond to FE’s queries on Thursday.

The NCLAT order was based on a January 2019 plea by AIOVA urging the appellate tribunal to “set aside” the CCI’s order absolving Flipkart of abusing its dominant position. The orders of CCI can be challenged in the NCLAT.

The AIOVA in its appeal to NCLAT had stated that the CCI order is liable to be quashed as the fair trade regulator “was unjust in ruling out dominance prima facie even after it had submitted ample evidence to prove otherwise”. The association had said that in a series of information filed before the CCI, it had established the dependence of sellers on Flipkart ― AIOVA had said the user reviews and ratings create a “lock-in effect on sellers”. The sellers pay platforms a fee for better placement of their product on the website. In the event the sellers shift to another platform, they have to work from scratch again by investing time and money to move the product at the top of the search bar.

👉 New Delhi, Aug 27 (PTI) The NCLAT on Thursday dismissed a plea by promoters of Chennai-based Empee Distilleries challenging the NCLT''s rejection of their Rs 513 crore settlement offer in favour of a Rs 475 crore resolution plan by SNJ Distilleries.

Upholding the order passed by the Chennai-bench of the NCLT, a three-member bench of the National Company Law Appellate Tribunal (NCLAT) said SNJ Distilleries'' bid was cleared by the Committee of Creditors (CoC) after finding it "viable, feasible and acceptable".

Passing an order on January 20, 2020, the National Company Law Tribunal (NCLT) dismissed the settlement plan filed by the promoters and approved the resolution plan submitted by SNJ Distilleries.

"We find that the impugned order does not suffer from any legal infirmity. The appeal lacks merit and the same is dismissed," said the NCLAT bench headed by Acting Chairperson Justice B L Bhat.

The appellate tribunal also dismissed the promoters'' allegations that their settlement plan was arbitrarily rejected by the CoC.

"What primarily appears to have weighed with the CoC in discarding the Settlement Plan of Promoter is its structural layout....," it said.

There was also ambiguity in regard to raising of funds as well as specific schedule of payment to various stakeholders, it added.

The NCLAT''s direction came on a petition filed by Shaji Purushothaman, promoter/director of Empee Distilleries, challenging the NCLT order approving the resolution plan of SNJ Distilleries.

The NCLT had on November 1, 2018 directed insolvency proceedings against Empee Distilleries over a plea filed by its financial creditor Union Bank of India.

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✅GSTN has enabled the facility to check Bill of Entry information in respect of GST paid at the time of "Import of goods' from Overseas and SEZ units/developers in "GSTR-2A

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Personal Hearing Must if Assessee has Requested in matter of SCN

GST Alert 627- In a Writ Petition filed before Telangana High Court by CSK Realtors Ltd vs Asst. Commr. ST pronounced on 13.08.2020 [2020 (8) TMI 622]

Petitioner contends that when there is a specific request from the petitioner to provide personal hearing, it is the duty of the 1st respondent to provide such a personal hearing.

The 1st respondent shall provide a personal hearing to the petitioner; and then the 1st respondent shall pass a reasoned order in accordance with and communicate it to the petitioner. 

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Stand taken by Revenue is that the emails being sent to taxpayers for payment of interest are merely "intimations" and not "orders", and will not be made the basis of any recovery action for interest u/s 50

In above matter, Sahara Hospitality Ltd. v State of Maharashtra, Petitioner had challenged the direct recovery of interest under Section 50 of Maharashtra GST Act without any show cause notice or hearing etc. Petitioner was also not given any working as to how the interest liability had been worked out. A 3 line email demanding interest payment within 7 days and threatening recovery proceedings in default of payment was received by Petitioner. Tax was already paid by Petitioner and the matter was restricted to recovery of interest.

The High Court has recorded the undertaking of authorities that interest under Section 50 will not be recovered without following proper procedure of show cause and hearing and without providing proper working to Petitioner. On the basis of this assurance the writ petition has been disposed off.

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LEGAL KNOWLEDGE CAPSULE

✒️ Supreme Court has held that either suspend or cancel registration certificate of vehicles without valid *PUC Certificate and penalise onwers.

✒️ Punjab & Haryana High Court has asked lawyers/clerks/litigants not to use saliva to affix court fee stamps on the petitions/applications.

✒️ Delhi High Court has asked Ministry of Information & Broadcasting to decide on representation to delete alleged defamatory scenes against air force in the gunjan saxena movie

✒️ Calcutta High Court has inititated contempt proceedings for taking screenshot of virtual hearing.

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

https://carohitjaiswal.blogspot.com/p/update-android-app.html?m=0

Thanks for reading

27 August 2020 News and Updates

Ø  Govt debt set to hit historic high of 91% of GDP

Ø  India needs USD 50 billion investment to build airport assets over 2 decades: Report

Ø  RBI surplus transfer lowest in 7 yrs: Garg

Ø  Telecom subscriber base falls to 116.3 cr

Ø  India may impose anti-dumping duty on Choline Chloride imports from China, Malaysia, Vietnam

Ø  Indians' disposable income growth stagnates

Ø  ICICI Bank will offload 2% in ICICI Securities to attain 25% public holding

Ø  BoI plans to raise up to Rs 8,000 cr in tier-I and tier-II capital

Ø  CCI approves Carlyle Group's stake acquisition in Airtel's data centre biz

Ø  ArcelorMittal SA declares force majeure after blast furnace breakdown

Ø  India-China spat starting to impact domestic unicorns, Chinese investors

Ø  NTPC ties up with Greenko to offer Round the Clock renewable energy

Ø  Interest to be paid on net GST with effect from September 1

Ø  Reliance Industries appoints former Indian Oil CMD as Group President

Ø  BPCL to spend ₹16,500 crore as Capex and Opex by March

Ø  Coal India awards ₹2,900 cr contract to Belarus-based Belaz

Ø  Maharashtra government slashes stamp duty to boost real estate sector

Ø  Punjab and Sind Bank declares DHFL loan account as fraud

Ø  PFRDA appoints ombudsman to resolve grievances for NPS, APY

Ø  Govt looks to mop up ₹5,020 crore through stake sale in HAL

Ø  Mahindra inks pacts with Israeli firm to develop electric commercial vehicles

Ø  China’s Alibaba Group puts India investment plan on hold amid tensions: Sources

Ø  Cotton spinners’ revenue to fall 30-35 pc in FY21 on tepid demand: Crisil

Ø  New govt employment in June down 60% from FY20 level

Ø  Sensex ends above 39,000 for first time in 6 months, Nifty crosses 11,500-mark

Ø  Ex-RBI governor D Subbarao backs setting up of a bad bank to tackle rise in NPAs

Ø  Gujarat tops Export Preparedness Index 2020, Maharashtra ranks second

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⚫General Govt debt -- which is the combined liabilities of the Centre and states -- is likely to hit a record 91% of GDP this fiscal. This will be the highest in record since data began to be maintained in 1980.

⚫Pulling up the Centre for “hiding behind the RBI, the Supreme Court asked to clarify its stand within a week on the waiver of interest on loan repayments during the moratorium period. A Bench said the Govt had failed to clear its position on the issue despite the fact that ample powers were available with it under the Disaster Management Act.

⚫Ahead of the crucial single-agenda GST Council meeting most states reached a consensus that the Centre should borrow to compensate states for the revenue shortfall owing to inadequate cess collection. 

⚫The RBI will rationalise regulations for overseas direct investment in order to make them simpler and more principles-based. The strategy for 2020-21 is to focus on consolidating and carrying forward all the initiatives which were undertaken in the previous year. 

⚫India has recorded its worst-ever single-day spike of 75,995 coronavirus cases, taking its total past 3.3 million, 1017 fatalities reported.

⚫In a major boost to the real estate sector in the state, Maharashtra Govt announced a cut in stamp duty and other levies for buying and selling of properties in urban and rural areas.

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GST QUERIES

1. Can I verify the authenticity or the correctness of e-invoice?

✅Anyone can verify the authenticity or the correctness of e-invoice by uploading the signed JSON file or Signed QR Code into e-invoice system. The option ‘Verify Signed Invoice’ under Search option can be selected and the signed JSON file can be uploaded and verified. Similarly, the QR Code Verify app may be downloaded and used to verify the QR Code printed on the Invoice.

2. I got my registration cancelled in the financial year. Am I required to file Form GSTR-4 (Annual Return)?

✅ The Form GSTR-4 (Annual Return) is required to be filed, if you were a composition taxpayer during any part of the financial year and if you have got your registration cancelled during the said financial year.

3. I am applying for registration and what if I fail to undergo Aadhar Authentication?

✅The registration shall be granted only after physical verification of the place of business in the presence of the person, in the manner provided under rule 25. But if the joint Commissioner permits then it can be done by verification of documents. The notice in FORM GST REG-03 may be issued not later than twenty one days from the date of submission of the application.

4. What is the turnover threshold for applicability of E-Invoicing?

✅ As per Notification No 61/2020 – Central Tax dated 30th July, 2020 threshold turnover for preparing e-Invoice is Rs 500 Crores.

The turnover for the purpose of E-Invoicing is to be computed at PAN Level (for all GSTINs combined) for the Financial Year 2019-20.

5. When I enter Vehicle number, I get a message that Vehicle is registered in more than one RTO, what should I do?

✅This message indicates that the Vehicle details are found in more than one RTOs. You need to approach your RTO and request for updation of the office. Once the details are updated this message will not appear again. Not doing so, later it will be treated as Vehicle no. is not existent and may not be allowed for e-waybill generation.

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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 August 2020 News and Updates

Ø  US Consumer Confidence fades further in Aug

Ø  Difficult to accurately assess Economic Impact of COVID-19: RBI

Ø  India plans deep cut in Thermal Coal Imports 

Ø  Banks need to shed risk aversion, says RBI

Ø  Cement demand up as rural segment recovers

Ø  DLF to develop 10 million sq ft of Middle-Income Housing 

Ø  India's Crude Steel output falls over 24 pc in July, Global Production shrinks 2.5 pc: worldsteel

Ø  Govt to spend Rs 1.2 Trn on Oil, Gas exploration and refineries in FY21

Ø  Management of foodgrain surplus key challenge for India: RBI Report 

Ø  Sebi slaps Rs 50 lakh fine on NSE for change in compensation policy

Ø  PNB makes first recovery of Rs 24 cr in Nirav Modi fraud case in US

Ø  Pharmacy Consolidation may disrupt domestic drug market: Credit Suisse

Ø  Tata Motors Group says will cut consolidated debt to zero in 3 years

Ø  Ramco Sytems bags multi-million dollar deal in Malaysia

Ø  Crude oil Output down 10%, Natural gas down 5% in July

Ø  Domestic oil and gas industry resumes work on projects worth ₹ 5.88 Lakh Crore 

Ø  JSW Group to jointly market Steel, Cement 

Ø  Sun Pharma subsidiary resolves US investigation on Product Promotion 

Ø  CanFin Homes’ Q1 profit up 15.02%

Ø  Greenko and NTPC to partner for supplying on-demand green energy

Ø  TVS Automobile Solutions and Google tie up to digitise auto aftermarket

Ø  Air India bidding deadline extended again to 30 October due to Covid-19 

Ø  Moody's downgrades SBI's Standalone profile on asset quality concerns

Ø  NCDEX to relaunch futures contract of Til on Aug 26

Ø  TERI proposes Rs 40-lakh crore Green Stimulus to revive Growth, Jobs 

Ø  Clear exit strategy, credible milestones needed for fiscal consolidation, says RBI

Ø  Germany Economy's 2nd-quarter decline revised to below 10 Percent 

Ø  Credit Suisse to shut 37 Bank branches in Switzerland

Ø  Some states may cut stamp duty rates to push realty sales: Anarock

Ø  Kalyan Jewellers files prospectus for Rs 1750 Crore IPO

Ø  Interpol issues Global Arrest Warrant against fraudster Nirav Modi's wife Ami

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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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⚫The country's GDP may have contracted by 25% in the June quarter, which witnessed the strictest coronavirus induced lockdowns. Mfg, construction, and trade, hotels, transport and communication will be the worst-affected segments in the official set of numbers to be announced by the Govt

⚫Co's bidding for public procurement from countries, which share a land border with India, will now need to separately register with the Govt and secure a security clearance before engaging in the bidding process.The move is set to affect mostly co's in China, which have hitherto had a major presence in both central and state level public procurement.

⚫FM said the GST Council would look into the auto industry’s demand for lowering the tax rate on two-wheelers, which are now taxed at the highest slab rate of 28%.

⚫Rating agency Moody’s has downgraded  (SBI’s baseline credit assessment from “ba1” to “ba2” as economic shock from the Covid-19 may aggravate the weakening borrowers’ credit profiles. It would hurt asset quality of India banks.

⚫India has recorded 66,873 coronavirus cases in the past 24 hours, taking its total way past the 3.2 million mark. With 1,066 fatalities, the country's death toll is nearing 60,000.

⚫ICMR DG said that irresponsible people who are not using the face masks, not maintaining social distaining are the ones who are driving the pandemic in India.

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👉  Pre-packaged insolvency resolution framework could make a debut in the micro, small and medium enterprises (MSME) segment before being expanded to other sectors.

The government is drawing up a framework for resolution of MSMEs under the Insolvency and Bankruptcy Code (IBC), which could be rolled out soon, said a senior official.

“We may experiment with pre-packs for MSMEs and then expand it,” said the official, who did not wish to be identified.

A pre-packaged resolution is one where a company prepares a restructuring plan in cooperation with its creditors before initiating insolvency proceedings. This reduces the time and costs involved in the process.

The terms of such a resolution plan would have to be confidential until statutory proceedings begin and the process would involve very little time in court, said an official from the Insolvency and Bankruptcy Board of India (IBBI).

However, this would be subject to the approval of the government. A sub-committee under the Insolvency Law Committee is working on the framework, said the official.

In May, finance minister Nirmala Sitharaman had raised the threshold for initiating insolvency proceedings to Rs 1 crore from Rs 1 lakh to protect MSMEs from an adverse fallout of the pandemic and lockdown.

👉 The banking sector went through a bout of pain, starting with the asset quality review in 2015, shooting up of non-performing assets (NPAs), write-offs, the Insolvency and Bankruptcy Code and National Company Law Tribunal (IBC-NCLT) awards, culminating in capital infusion by the government. Capital infusion, ultimately, is public money. Just when the banking sector was recovering, with NPAs coming down from 11.6% as on March 2018 to 8.6% as on March 2020, along came the covid-19 shock. This would have a significantly negative impact on NPAs as almost all borrowers are reeling.

Given the challenge, the situation has been managed pragmatically. What all has been done? The moratorium, IBC-NCLT being put on hold and rating agencies being allowed to go a little slow on downgrades. It is pragmatic because faced with a once-in-a-hundred-year challenge, it is not about theoretical correctness but about facing the challenge. When voices were being expressed that the moratorium should not be extended beyond 31 August as it may compromise on credit discipline, it was done away with and a one-time settlement or restructuring allowed.

At the margin, certain improvements are happening. The extent of moratorium availed of as on 30 April—combining all categories of borrowers and lenders—was 50% of the system. On a ballpark basis, this indicates stress in the system, from the perspective that half the borrowers were indicating that they can’t pay up immediately. There would be a bit of a dilution in data in the form of communication gap, particularly in the individual borrower segment, where 55% of the loans were under moratorium in April. The accumulation of interest over a long period of time and the extra burden of EMIs towards the end of the tenure were not properly understood by individual borrowers, and in certain cases were not properly explained by the bankers. If properly explained, some people may not have availed of the moratorium, in view of the disproportionately higher burden later on.

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

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25 August 2020 News and Updates

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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21 August 2002 News and Updates

21 August 2020 News and Updates

Ø  India's GDP to contract by 20%: CARE Ratings

Ø  DoT opposes resolution plan of RCom

Ø  SCRI: India, Japan, Australia joining hands to counter China's supply chain dominance

Ø  Cabinet okays increase in sugarcane FRP by Rs 10 to Rs 285/qtl for 2020-21

Ø  Bombay High Court sets aside Yes Bank petition in Zee Entertainment case

Ø  India takes on Asia’s forex hubs

Ø  Indians not just risk averse, stressed for income too, shows data

Ø  National Payments Corp to take UPI, Rupay global through new subsidiary,

Ø  Microfinance sector may see consolidation post Covid-19, say experts

Ø  Banks may restructure Rs 8.4 tn loans as economy sputters: India Ratings

Ø  Sistema Asia Fund sells its stake in Netmeds, exit is part of RIL deal

Ø  World trade registers historic 18.5% fall in Q2 of 2020, but slight recovery possible in Q3: WTO

Ø  Centre relaxes working capital norm for discoms

Ø  DPIIT to review royalty payments made to firms abroad

Ø  Cabinet approves leasing of 3 AAI airports to Adani Enterprises

Ø  IEX gets regulator’s nod for ‘green market’

Ø  Novigo Solutions buys stake in Bengaluru-based Nyletech

Ø  Apple becomes first US company to be worth $2 trillion

Ø  Airtel, Voda Idea may file additional applications for 5G trials without Chinese

Ø  Fixed broadband, digital investments must for sustained, growth: TRAI chief

Ø  SBI Prices the largest Tier 2 Bond offering; raises ₹8,931 Cr 

Ø  CCI clears Facebook’s WhatsApp for entering India’s payments space

Ø  India can reach potential growth of 9% in 3 years: PwC India

Ø  CSB Bank Q1 net more than doubles to Rs 53.6 cr

Ø  L&T Finance exits CG Power and Industrial Solutions 

Ø  Dr Reddy's launches COVID-19 drug Avigan (Favipiravir)

Ø  Reliance acquires majority stake in Online Pharmacy Netmeds

Ø  China, US agree to hold trade talks

Ø  EPFO records 6.55L net new enrolments in Jun

Ø  Listed cos: Lowest growth in wages in 18 yrs

Ø  NCLT decides to appoint IRP in a case filed by SBI against Anil Ambani

Ø  Edible oil industry body SEA urges government to allow import of only crude palm oil

Ø  India's dependence on thermal power will reduce to 50 per cent by FY22: Report

Ø  India's rural economy on V-shaped recovery from June, helping GDP

Ø  RBI governor for judicious use of monetary action in future: MPC minutes

Ø  Tata Power looks to use preference share, divestment proceeds to cut debt

Ø  Niti Aayog panel recommends linking sugarcane prices to sugar rates

Ø  US jobless claims jump back above 1 mn as Covid-19 pulls down economy

Ø  Offshore funds, ETFs pull out $1.5 b in June quarter on economy worry

Ø  IOB posts profit for two quarters in a row

Ø  CCI approves Siemens’ acquisition of C&S Electric

Ø  Lincoln Pharma Q1 standalone net rises 25% to ₹15 crore

Ø  Centum Electronics divests energy unit of its French arm for €9.8 million

Ø  Small car buyers not likely to go for EVs: Maruti Suzuki head

Ø  Central govt invites bids from merchant bankers to manage stake sale in IRCTC

Ø  'Indo-US current trade talk 1st step to a comprehensive bilateral trade pact'

Ø  MSME credit guarantee scheme: Banks disbursement crosses ₹1 lakh crore-mark

Ø  Cyril Amarchand Mangaldas advises Info Edge on raising ₹1,875Cr

Ø  HFCs require ₹3.8-4.5 tn to meet refinancing requirements this fiscal: Report

Ø  Retail inflation for farm, rural workers drops in July

Ø  GAIL sees gas sales returning to pre-COVID-19 levels by quarter end

Ø  Hindalco signs MoU with UltraTech Cement

Ø  Sebi to relax public shareholding norms for firms under insolvency

Ø  Wadhawan brothers granted bail in Yes Bank fraud case

Ø  RBI releases strategy for financial education, aims to create empowered India

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⚫The World Bank said it was likely to project a steeper contraction in India’s economy than the 3.2% it had forecast for the current financial year, given the rising number of Covid-19 cases and the resultant regional lockdowns.

⚫The number of salaried people losing their jobs amid the pandemic has surged to 18.9 million since April, with around 5 million jobs lost last month, according to data from the Centre for Monitoring Indian Economy.

⚫The Govt has given its go-ahead to lease out Guwahati,Thiruvananthapuram and Jaipur airports through public-private partnership, what is to be seen is how effectively and efficiently would it be able to complete the process especially during the pandemic.

⚫The MCA has allowed more time for Co's that were unable to hold their AGM for the year ending March 31, 2020 despite earlier relaxations asking them to file an application with the ROC for the same.

⚫Indian banks may restructure loans worth Rs 8.4 trillion--about 7.7% of total credit in March 2020--to manage financial stress caused by the coronavirus pandemic. Almost 60% of Rs 8.4 trillion credit is already susceptible to slip into NPA category after lockdowns.

⚫A pan-India fake invoice racket involving transactions of about Rs 434 crore by 23 firms has been busted by the DG of GST Intelligence, Nagpur Probe revealed that 23 firms across India, from Tamil Nadu to New Delhi, were involved in issuance of fake invoices to get fraudulent 'Input Tax Credit' without supply of any goods.

⚫CBDT Chairman met income tax field units to appraise them of the new scheme and explained the nitty-gritty of its implementation. He explained the faceless assessment and taxpayers' charter and detailed the reallocation and reorganisation aspects of the dept's manpower.

⚫The approval of projects under the Govt's flagship PM Employment Generation Programme increased 44% between April and August 18 this year, theKhadi and Village Industries Commission said.

⚫Russia is looking for a partnership with India for producing Covid-19 vaccine Sputnik V, the CEO of the Russian Direct Investment Fund said.

⚫After hotels and monuments, banquet halls will soon be opened at half capacity, Union Tourism Minister said assuring the hospitality industry of his support to deal with the effects of the Covid-19 pandemic.

⚫The Govt is ensuring liquidity for the MSME sector under its Emergency Credit Line Guarantee Scheme. As of August 18, public sector and private banks have sanctioned loans worth over Rs 1.51 trillion of which close to Rs 1.02 trillion has already been disbursed.

⚫The Finance Ministry said banks have sanctioned over Rs 1 lakh crore concessional loans to Kisan Credit Card holders to help farmers meet financial requirements during the COVID-19 crisis.

⚫India has recorded over 68,500 coronavirus cases, taking its total past the 2.9-million mark to 

2,904,329. With 54,975 fatalities reported on Thursday, the country's death toll has surged to 53,994.

⚫India for the first time conducted a record number of more than 9 lakh Covid tests in a span of 24-hours and it is poised to see an exponential increase towards its resolve of testing 10 lakh samples daily.

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✅ GST Updates 

🎯New Registration Procedure in GST- Aadhaar Authentication w.e.f. 21st Aug, 2020.

1. w.e.f. 21st August, 2020, undergo authentication of Aadhaar number and the date of submission of the application in such cases shall be the date of authentication of the Aadhaar number, or 15 days from the submission of the application in Part B of FORM GST REG-01 whichever is earlier.”.

2. Fails to undergo authentication of Aadhaar number as or does not opt for authentication of Aadhaar number, the registration shall be granted only after physical verification of the place of business in the presence of the said person.

3. As per Point No. 2, Notice in FORM GST REG-03 may be issued not later than twenty one days from the date of submission of the application.

4. Registration deemed to be granted if proper officer fails to take any action in 3 days/15 days/21 days/7 days as the case may be.

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