30 April 2021 News and Updates

30th April 2K21

Ø  Acre ARC set to purchase Indiabulls assets

Ø  Banks need to adopt digitisation or else they will perish: Ex-finance Secretary SC Garg

Ø  Labour Min hikes maximum sum assured payable under EDLI scheme to Rs 7 lakh

Ø  ICICI Bank launches merchant stack platform

Ø  Unemployment rate likely to be 8% compared to 6.5% in March in India: CMIE

Ø  India urges China to clear bottlenecks on key pharma raw-material

Ø  Ambuja Cements consolidated Q4 PAT at Rs 947 cr, up 71% YoY on higher sales

Ø  Govt looking to monetise possible IT parks, SEZs developed on PSU land

Ø  Unilever plans $3.6 billion buyback as China and home cooks boost growth

Ø  Most Indian companies protected against weakening rupee: Moody's report

Ø  HUL Q4 PAT jumps 41% YoY to Rs 2,143 crore, beats Street estimates

Ø  Auto firms to halt production for up to 15 days amid raging second wave

Ø  Lockdowns spell a downside risk for electricity demand growth in FY2022: ICRA

Ø  RBI to conduct first special OMO of FY22 on May 06

Ø  Niraj Bajaj to take over as Chairman of Bajaj Auto

Ø  Zomato revenue up at ₹2,604 crore in FY20

Ø  Biocon Biologics posts 53% growth in revenues at ₹664 crore for Q4FY21

Ø  Indian pharma hit hard by China’s suspension of cargo flights

Ø  Shriram Transport net profit jumps 238% to Rs755 crore in March quarter

Ø  Sebi extends results filing deadline for Indian firms due to Covid-19

Ø  L&T Finance Q4 net profit falls 31% to Rs267 crore

Ø  PowerGrid’s first InvIT public offer subscribed 10% on day one

Ø  Titan Q4: Net profit jumps 48% to ₹529 crore

Ø  CCI clears Tata’s acquisition of BigBasket

Ø  Govt allows import of medical devices like oxygen canister for 3 months with riders

Ø  Bajaj Finserv Q4 profit jumps four folds to Rs 979 cr

Ø  Indian gold demand likely to slow down in April-June: WGC

Ø  Bank Of Maharashtra Net Profit Jumps To Rs 165 Cr In March Qtr

Ø  Laurus Labs Q4 Net Profit Zooms Nearly 3-Fold To Rs 297 Cr

Ø  Portfolio Manager To Obtain Prior Approval Of Sebi In Case Of Change In Control

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🔰 Today is the last date to opt-in or opt-out of QRMP scheme for the quarter April-June’ 21

✅ The last date to Opt-in or Opt-out of the QRMP scheme for the quarter April-June 21′ is April 30, 2021′.

Read More at: http://www.a2ztaxcorp.com/today-is-the-last-date-to-opt-in-or-opt-out-of-qrmp-scheme-for-the-quarter-april-june-21/

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Initiative by ICAI

Norms have been relaxed by ICAI for medical assistance for CAs and their dependents who are in distress and need help.

For further information please use link provided below

https://www.icai.org/post/financial-assistance-for-treatment-of-corona-disease-from-cabf

https://www.youtube.com/channel/UCwAq-U2ls2crYBoD4YSTPtA

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⚫The Govt will procure one lakh portable oxygen concentrators and install 500 more pressure swing adsorption oxygen plants from the PM Cares Fund.

⚫The Cabinet approved the signing of a deal between India and the UK on information sharing and preventing Customs offences. The agreement is also expected to facilitate trade & ensure clearance of goods traded between the countries.

⚫The SEBI told the mutual fund industry that a fifth of the salary of top executives is be paid in the form of units of mutual fund schemes they oversee.

⚫Single window clearance mechanism for foreign investors hits a bump. Manpower crunch because of Covid, only 8 states put in place the requisite infra.

⚫The USA will be delivering relief materials worth over USD100 million to India in the coming days, as the first flight carrying urgent health supplies left for the country.

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👉 Due dates for filing of Form GSTR-3B from the Tax Period of January, 2021

https://www.gst.gov.in/newsandupdates/read/467

👉 Clarification on spending of CSR funds for setting up temporary COVID Care facilities and makeshift hospitals-reg.Pdf(371 KB)

file:///C:/Users/saurabhankit/Downloads/GeneralCircularNo5_22042021(2).pdf

👉 Important Announcement - June 2021 Foundation Examination - (26-04-2021)

https://www.icai.org/post/imp-announcement-june2021-foundation-exam

👉 Further extension of the last date for Waiving-off Condonation Fees due to late filing of various application forms related to Students and Articled Assistants, amidst COVID-19 Pandemic - (26-04-2021)

https://www.icai.org/post/further-extension-last-date-for-waiving-off-condonation-fees

👉 Important Announcement - May 2021 CA Examinations - (27-04-2021)

https://www.icai.org/post/imp-announcement-may2021ca-exams

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✅ Covid Vaccination Drive:

You can register for vaccination at the below link;

https://selfregistration.cowin.gov.in/

✅ MSME Form-1 (MCA) is to be filed by only those specified companies whose outstanding payment to MSMEs suppliers is exceeding 45 days as on 31st March or 30th September.

Last date 30th April 2021 (for Oct20 to Mar.21)

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🔰 No GST can be demanded from Buyer for the fault of seller of non-payment of taxes to the Govt.

✅ The Hon’ble Madras High Court in M/s. D. Y. Beathel Enterprises v. the State Tax Officer [W.P. (MD) Nos. 2127, 2117, 2121, 2152, 2159, 2160, 2168, 2177, 2500, 2530, 2532, 2534, 2538, 2539, 2540, 2503 & 2504 of 2021 & Ors., dated February 24, 2021] quashed the order passed by the officer levying the entire tax liability on the purchasing dealer without involving the seller, where the payment of tax has been made by the purchasing dealer, but the same has not been remitted to the Government by the Seller. Held that, the omission on the part of the Seller to remit the tax should have been viewed very seriously and strict action ought to have been initiated against the seller.

The Complete Judgment can be accessed at: http://www.a2ztaxcorp.com/no-gst-can-be-demanded-from-buyer-for-the-fault-of-seller-of-non-payment-of-taxes-to-the-govt/

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⚫More than 40 countries have committed to provide India with medical items and pharmaceutical products that the country urgently needs to battle the unprecedented rise in Covid-19 cases.

⚫Labour crunch hits roads construction and realty business. Uttar Pradesh & Maharashtra, are reporting a higher loss of on-site labourers.

⚫Co's may not get immediate relief measures. Some of the exemptions given as part of Covid relief measures last year would come to an end in June 2021.

⚫Auto firms to halt production for up to 15 days amid raging second wave. For some it is part of annual maintenance protocol, for others it's a forced move, done for safety of those employed at the factory.

⚫SEBI extended the timelines for various regulatory filings, including financial earnings. The deadline to file the March quarter and annual financial results has been extended to June 30.

⚫The Maharashtra Govt extended till May 15 the existing lockdown.

⚫India reported 386888 cases, India has been reporting over 300,000 cases daily for over a week now.

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28 April 2021 Updates

🔰 Companies and LLP allowed to furnish GSTR-3B and GSTR-1/IFF using EVC instead of DSC from April 27, 2021 to May 31, 2021

✅ The CBIC vide Notification No. 07/2021–Central Tax, dated April 27, 2021, issued the ‘Central Goods and Services Tax (Second Amendment) Rules, 2021’ to further amend Rule 26 of the Central Goods and Services Tax Rules, 2017 (“ CGST Rules” ) that deals with the method of authentication of documents or application. 

The Notification can be accessed at: http://www.a2ztaxcorp.com/companies-allowed-to-furnish-gstr-3b-and-gstr-1-iff-using-evc-instead-of-dsc-from-april-27-2021-to-may-31-2021/

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⚫The corporate earnings season for the Q4 of FY21 has started on a positive note for India Inc.The combined net profit of 81 co's that declared their quarterly results by Monday evening is up 36.2% yoy.

⚫Small businesses have urged FM to review classification norms for bad loans and rationalise import duty on key raw materials such as iron and steel.

⚫Amid the resurgence of Covid-19 and with states imposing lockdowns, NBFCs are seeking a revival of the debt restructuring scheme. Those who had availed themselves of the recast earlier should get a second chance.

⚫E-commerce co's face double whammy of lockdowns, sick staff. Co's struggling to meet delivery timelines; many of their delivery associates are down with Covid-19.

⚫As the registration for the next phase of Covid-19 vaccinations for all opens, the health ministry shared data which showed that 150 million doses had been given to the states so far, of which 10 million were still available with them.

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#INDIRECT TAXATION:

Expediting Customs Clearances for import consignments relating to COVID 19 pandemic

• Considering the scourge of COVID 19 and surge of cases in the Country, it is an imperative that import of critical raw materials, life -saving drugs etc reach the intended users/beneficiaries in time for effective fight against the pandemic. Hence, it is requested that all Customs formations may be sensitised of the urgency of this matter and may be directed to give high priority for Customs clearances of import of goods relating to COVID 19 pandemic, including oxygen related equipments etc.

CBIC provides facility of filing GSTR-3B and GSTR-1 / IFF using EVC instead of DSC

• A registered person registered under the provisions of the Companies Act, 2013 (18 of 2013) shall, during the period from the 27th day of April, 2021 to the 31st day of May, 2021, also be allowed to furnish the return under section 39 in FORM GSTR-3B and the details of outward supplies under section 37 in FORM GSTR-1 or using invoice furnishing facility, verified through electronic verification code (EVC).

#ICAI

Postponement of the Examinations

In view of the ongoing COVID-19 pandemic, it has been decided to postpone the final and intermediate Chartered Accountants Examination which are scheduled to commence in May 2021.

Fresh dates will be intimated to students and while doing so, a notice of 25 days will be given before start of the examinations.

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⚫Hospitals begged for oxygen supplies as the country’s coronavirus infections soared again overnight, setting a new world record for cases for the third consecutive day. 

⚫Startups step up efforts to assist in oxygen delivery.

⚫Bharat Biotech said that it will supply Covaxin directly to state Govts at Rs 600/dose, while it will supply the vaccine directly to private hospitals at Rs 1,200. Serum Institute said that its vaccine, Covishield, would cost Rs 400/dose for state Govts and Rs 600 for private hospitals.

⚫The CBI has registered a case of alleged corruption against former Maharashtra HM and conducted searches at his premises in Mumbai and Nagpur.

⚫The Govt has asked social media platforms, including Twitter and Facebook, to remove content and posts that were found to be spreading misinformation & public panic.

⚫Ahead of vaccination of people between 18 and 45 from May 1, the Centre asked states to register additional private vaccination centres and ensure effective crowd management at sites and stressed on inoculation through "only online registration".

⚫The USA will immediately provide raw materials for COVID-19 vaccines, medical equipment and protective gear to help India respond to a massive surge in COVID-19 infections.

⚫Big conglomerates have begun collaborating with the Govt on the production, supply and storage of the essential medical resource. The Tatas, L&T and Bharat Forge expressed interest in building pressure swing absorption oxygen plants at hospital sites, while IOC and Reliance are pitching in with both oxygen and cryogenic tankers needed for its transportation.

⚫Amazon has joined hands with various industry partners and NGOs to urgently bring in 10,000 oxygen concentrators and BiPAP machines to India.

⚫The PM CARES Fund has given an in-principle approval for the allocation of funds for 551 dedicated PSAs inside public health facilities in the country. These dedicated plants would be set up in Govt hospitals in district headquarters in various states and union territories.

⚫The US will work around the clock to help India by deploying raw materials for vaccines, ventilators, oxygen generation supplies and financial support for vaccine expansion.

⚫The local smartphone market grew by 23% over a year earlier in the January-March quarter. The shipment of smartphones touched 38 million units.

⚫The Madras High Court castigated the EC over the COVID-19 wave in the country, holding it 'singularly' responsible for the spread, called it "the most irresponsible institution" and even said its officials may be booked under murder charges.

⚫The Karnataka Govt announced "close down" across the state for 14 days from Tuesday night.

⚫The Maharashtra Police booked Indiabulls group co's, including its flagship Indiabulls Housing Finance, for allegedly siphoning off funds and for accounting irregularities committed by the promoters and directors of the company between 2014 and 2020.

⚫PM held a meeting with leading oxygen manufacturers and industries diverting their oxygen supply for medical use, and discussed utilising their full potential to meet the demand in the coming days. PM stressed the need to increase the availability of oxygen cylinders as well as upgrade the facilities for transportation of oxygen. 

⚫Delays in RT-PCR tests mainly due to manpower crunch. While there is a shortage of testing kits, manpower capacities, India does not have other scalable testing options.

⚫With the 2nd Covid-19 wave rendering millions of poor jobless and triggering another exodus of migrants, the Central Govt to distribute 5 kg grains free of cost to all the 800 million beneficiaries of the National Food Security Act over and above their regular quota in May and June 2021.

⚫Pharma poised for an excellent FY22 on the back of Covid led demand. Improving exports and a weak rupee could support profit boost.

⚫India reported 345,147 fresh covid cases.

⚫25 new manufacturing sites for Remdesivir's production have been approved.The Govt is working hard to enhance the production of antiviral drug to 3 lakh vials/day.

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🔰 Government extends certain timelines in light of the raging pandemic

✅ In view of the severe Covid-19 pandemic raging unabated across the country affecting the lives of our people, and in view of requests received from taxpayers, tax consultants & other stakeholders that various time barring dates, which were earlier extended to 30th April, 2021 by various notifications, as well as under the Direct Tax Vivad se Vishwas Act, 2020, may be further extended, the Government has extended certain timelines today.

The Press Release can be accessed at: http://www.a2ztaxcorp.com/government-extends-certain-timelines-in-light-of-the-raging-pandemic/

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[Breaking] COVID-19: Govt extends Time Limit for Income Tax Assessments, Payments under Direct Tax Vivad se Vishwas Act

Read More: https://www.taxscan.in/breaking-covid-19-govt-extends-time-limit-for-income-tax-assessments-payments-under-direct-tax-vivad-se-vishwas-act/111888/

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23 April 2021 News and Updates

23rd April 2K21

Ø  Fitch affirms BBB- rating, says COVID surge may delay economic recovery

Ø  COVID second wave's impact on economy may not be very large: CEA

Ø  India needs $401 bn capex to fight climate change: Report

Ø  Reliance increases supply of oxygen to over 700 tonnes a day to COVID-hit states

Ø  Companies' spending for setting up makeshift hospitals to be CSR activity: Govt

Ø  Lenders to withdraw debt recast if Future Group-RIL deal goes through

Ø  Vedanta ramps up oxygen supplies amid surge in COVID-19 cases

Ø  S&P forecasts 11% growth for India this fiscal, flags impact of lockdowns

Ø  Irdai allows insurers to invest in debt instruments of InvITS and REITS

Ø  Torrent Power bags 300 Mw long-term solar power generation PPA

Ø  Tata Steel takes Liberty Steel to court in UK over missed payments'

Ø  Wipro aims to reach net-zero greenhouse gas emissions by 2040

Ø  Downward re-rating triggers for infra sector as Covid-19 strikes again

Ø  Govt bans supply of oxygen for industrial use from April 22

Ø  EV sales decline 20% in FY2021 to 2,36,802 units

Ø  Hitachi develops, deploys tech tools for a secure workplace in Covid times

Ø  Filatex India Q4 profit jumps over 5-folds to ₹118.39 crore

Ø  Number of life insurance policies dips in FY21; group covers lead the fall

Ø  Tech Mahindra joins the 1.5°C supply chain leaders

Ø  JLR to suspend operations at 2 UK plants due to semiconductor shortage

Ø  Warburg Pincus buys HDFC’s stake in Good Host

Ø  Rising covid cases biggest challenge to recovery: RBI MPC minutes

Ø  Indian Oil refineries operating at 95% capacity, sources say

Ø  Amazon-backed home tech startup SmartRent to go public in over $2 billion deal

Ø  Credit Suisse races to contain Archegos hit with capital raising

Ø  Covid-19 vaccination: Vaccinating everyone above 18 years to cost just 0.36% of GDP, says India Ratings

Ø  Pandemic has impacted 82 pc of small businesses: Survey

Ø  M&As jump over 17 pc to $25.3 billion in Q1: Report

Ø  Sensex Jumps 375 Points To Close Above 48000

Ø  Inflows In Sustainable Funds Surge 76 % To Rs 3,686 Cr In FY21

Ø  Subhash Chandra Denies All Speculations Pertaining To Dish TV India

Ø  Care Ratings revises India's GDP growth forecast to 10.2 pc for FY22

Ø  Consumer confidence weakens in April: Survey

Ø  ReNew Power commissions 105 mw solar project in Gujarat

Ø  Tata Steel & HSBC execute a blockchain-enabled, paperless trade transaction

Ø  Hero MotoCorp tied up with Gogoro Inc for electric mobility solutions

Ø  VAV Lifesciences to supply key COVID vaccine ingredient to Pfizer, Moderna

Ø  LIC paid Rs 1.34 trn as claims to policyholders in FY21, marking growth

Ø  Discoms overdues falls by over Rs 151 bn to Rs 740 bn in Mar: Report

Ø  Industry ready to strengthen capacity, back-end infra despite second wave

Ø  IndiGo to acquire four A321ceo planes, convert them into freighter aircraft

Ø  DCB Bank acquires equity stake in Bengaluru-based Techfino Capital

Ø  Merger of TV18 Broadcast, Hathway, Den Networks into Network18 called off

Ø  Insurers eye increase in third party motor premium

Ø  Vedanta offers medical oxygen from shuttered Sterlite copper plant

Ø  Phillips Carbon Black net jumps 76% in March quarter

Ø  KEC International wins new orders worth ₹1,245 crore

Ø  Finance Minister assures “seamless supply” of medical oxygen to States

Ø  Tech Mahindra acquires DigitalOnUS for $120 million

Ø  Bharat Biotech's Covaxin shows 78% efficacy in phase-3 interim analysis

Ø  ICICI Securities March quarter profit jumps two-fold to Rs329 crore

Ø  Canara Robeco Mutual Fund to launch focused equity fund

Ø  Tiger-backed KredX to ramp up disbursements to Rs1,000 cr this fiscal

Ø  Chinese Edtech Startup Zuoyebang plans US IPO to raise $500 million

Ø  India ranks 87th in global energy transition index

Ø  Indian Gas Exchange commences gas trade from 2 new hubs in Maharashtra

Ø  NPAs Of State-Owned Banks May Cross 18 % In Extreme Case Scenario: RBI Ex-Deputy Governor Khan

Ø  Private Life Insurers' New Premium Income Grows 8 % In FY21

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⚫Govt examining industry demands; breather on tax compliance deadline likely. Proposals for a 3-month extension of compliance timeline being considered

⚫Fitch Ratings has affirmed India’s long term foreign-currency IDR at ‘BBB-’ with a negative outlook.India’s rating balances a still strong medium-term growth outlook and external resilience from solid foreign reserve buffers, against high public debt, a weak financial sector, and some lagging structural factors.

⚫Banks have decided to shorten branch hours and cut staff attendance to 50%. The decision was taken by the IBA and the SOP's have been communicated to banks. Bank branches will now work from 10 am to 2 pm.

⚫India reported 332,503 fresh covid infections amid oxygen shortage and faltering health system.

⚫Delhi curfew, oxygen shortage take a toll on Noida industrial belt. Industry owners indicate that at least 15% of the 600,000-odd migrant workers employed in the region have already gone back.

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🔰 Supply of license of pre-developed or pre-designed software amounts to supply of goods covered under heading 8523

✅ The AAR, Karnataka in the matter of M/S. SPSS South Asia Pvt. Ltd., [Advance Ruling No. KAR/ADRG/15 of 2021, dated March 24, 2021] held that, supply of license of pre-developed or pre-designed software by assessee amounts to supply of goods and said supply is covered under tariff heading 8523. Further, such supply of computer softwares to a public funded research institution are covered under Serial No. 1 of Notification No.45/ 2017-Central Tax (Rate) dated November 14 2017 (“NN. 45/2017- CT(R)”).

The Complete AAR can be accessed at: http://www.a2ztaxcorp.com/supply-of-license-of-pre-developed-or-pre-designed-software-amounts-to-supply-of-goods-covered-under-heading-8523/

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22 April 2021 Updates

⚫Raw material imports from US to produce vaccines may take a month. The Joe Biden administration's decision to invoke the US Defense Production Act has blocked exports of crucial raw materials used in vaccine production.

⚫Serum Institute of India said it would price its vaccine Covishield at Rs 400/dose for the central and state govts and Rs 600/dose for private hospitals.

⚫ICMR Director said 0.04% people, who received the second dose of Covaxin, were positive for COVID-19, while 0.03% of people, who took the second dose of Covishield, contracted the infection. He said vaccines reduce the risk of infection and prevent death and severe infection.

⚫States may need Rs 30,000 cr to vaccinate 70% of those in 18-44 age group. Centre's support and private sector participation may relieve some of the load.

⚫India reported 315802 fresh coronavirus infections. The Govt of Maharashtra capped attendance in offices at 15% and restricted travel in suburban trains, metro and monorail to allow only govt employees, medical staff and those seeking medical treatment.

⚫PM appealed to states that lockdowns should be the last option. The PM asked state Govts to urge migrant workers to stay where they are and give them confidence that they wouldn’t lose their income and livelihood.

⚫Covid second wave unlikely to dent FY22 earnings, say analysts. While some sectors such as hotels, entertainment, aviation etc that will bear the brunt of the second Covid wave, the loss will be compensated by strong earnings in some other sectors.

⚫The finance ministry has informally told banks to reimburse or adjust the compound interest they charged customers in line with the Sup­reme Court’s order asking them to refund “interest on interest” collected from acco­unts that sought a moratorium.

⚫India reported its biggest ever spike of nearly 300,000 fresh Covid-19 cases. Badly affected cities like Delhi, Mumbai, Ahmedabad, Lucknow, Bhopal, Kolkata, Allahabad and Surat have almost run out of hospital beds. 

⚫Maharashtra govt may impose 15-day lockdown starting Wednesday night.

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🔰 CBIC withdrawn the customs duty on imports of Remdesivir and related ingredients

✅ CBIC vide Notification No. 27/2021–Customs, dated April 20, 2021, has exempted certain goods, from the whole of the duty of customs leviable under the Customs Act, 1962, till October 31, 2021.

The Notification can be accessed at: http://www.a2ztaxcorp.com/cbic-withdrawn-the-customs-duty-on-imports-of-remdesivir-and-related-ingredients/

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👉🏻Cabinet approves MoU between ICAI and CA-ANZ

(Cabinet has approved a fresh Memorandum of Understanding (MoU) between the Institute of Chartered Accountants of India (ICAI) and Chartered Accountants Australia and New Zealand (CA ANZ).

👇🏻 👇🏻 👇🏻

https://bit.ly/3syYOox

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

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20 April 2021 Updates

⚫India has allowed Covid vaccination for all above 18 years of age, starting May 1.

⚫UK, Hong Kong ban travel from India over new Covid-19 variant concerns.

⚫The RBI has formed a six-member panel headed by former ED, to carry out comprehensive review of the working of Asset Reconstruction Co's in the financial sector ecosystem.The panel will recommend suitable measures for enabling such entities to meet the growing requirements of the financial sector.

⚫India reported a slight decline of 256,947 in the number of fresh Covid-19 cases.The Capital is facing an extreme crunch of hospital beds, especially ventilators and ICU beds. 

⚫Migrant workers scramble to leave as Delhi goes under lockdown.

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🔰 Odisha AAR: Birthday candles, balloons, snow sprays under GST

✅ If you wish to celebrate someone’s birthday, you may have to shell out a bit more for the paraphernalia since balloons, caps, snow sprays or candles given along with birthday cakes are neither complimentary nor free, as per a recent advance ruling that proposes levying of Goods and Services Tax (GST) on these items.

Read More at: http://www.a2ztaxcorp.com/odisha-aar-birthday-candles-balloons-snow-sprays-under-gst/

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🔰 Gift vouchers are neither goods nor services, but instruments used as consideration for payment – Controversy Saga Continues

✅ The AAAR, Tamil Nadu in the matter of Kalyan Jewellers India Ltd. [Order-in-Appeal No. AAAR/11/2021 (AR), dated March 30, 2021] modified the order passed by the AAR, Tamil Nadu to the extent that vouchers are neither good nor service and the Central Goods and Services Tax Act, 2017 ( “CGST Act” ), recognized it as an instrument of consideration (non-monetary form) for future supply. Further, Held that, Goods and Services Tax ( “GST” ) will be levied at the time of issue of the voucher and not at the time of actual availing of service or time of redeeming the voucher as the supply is deemed to have been made at the time of issue of voucher itself.

The Complete AAAR can be accessed at: http://www.a2ztaxcorp.com/gift-vouchers-are-neither-goods-nor-services-but-instruments-used-as-consideration-for-payment-controversy-saga-continues/

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✅ A proprietary CA firm or an individual CA will no longer find it easy to retain the *audit mandate in a company beyond the stipulated five consecutive years* as allowed under the company law.

https://resource.cdn.icai.org/64473clcgc51714.pdf

✅Section 16 provides that ITC could be availed by the buyer if GST is paid by the seller. Thus, in case of non-payment of GST, who should be questioned, the seller or the buyer?

Madras HC quashed notices issued to the buyers wherein no proceedings were initiated against the sellers for non-payment of tax*

M/s DY Beathel Enterprises Vs State Tax Officer. WP (MD) No.2127 of 2021

_Download full order from here_ https://t.me/Team_CASA

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🔰 India likely to waive customs duty on Covid-19 vaccine imports

✅ The government is likely to waive 10 percent customs duty levied on imported vaccines in a bid to keep low the cost of overseas vaccines that are being eyed to supplement domestically made shots ahead of opening Covid-19 vaccination to all citizens over 18 years of age, sources said.

Read More at: httpp//www.a2ztaxcorp.com/india-likely-to-waive-customs-duty-on-covid-19-vaccine-imports/

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🇮🇳 GST Updates 20.04.2021

1️⃣ Today is the due date to file Form GSTR-5A Return for the m/o March-2021.

2️⃣ Today is the due date to file Form GSTR-3B for the m/o March-2021.

3️⃣ Birthday candles, balloons, snow sprays under GST as per schedule rates: Odisha AAR (Pioneer Bakers).

4️⃣ GST applicable on Reverse Charge basis on Amount Paid for Reimbursement of Stamp Tax as Pure Agent: Guj AAR.

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🏵️ The Committee on International Taxation of ICAI (CITAX) issues International Taxation Update-April/2021/13 on various matters:

🪔 Amendment by Income tax (10th Amendment) Rules, 2021 in Rule 2DB & 2DB and substitution of Form 10BBA

🪔 Digital platforms have an important role to play in value added tax policy in the sharing and gig economy

🪔 Making tax dispute resolution more effective: New peer review assessments for Australia, Ireland, Israel, Japan, Malta, Mexico, New Zealand and Portugal

🪔 Italy's Fabrizia Lapecorella appointed next Chair of OECD's Committee on Fiscal Affairs

🪔 For the document click at https://resource.cdn.icai.org/64494citax200421.pdf

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🔰 Union Cabinet approves Amendments to the Finance Bill, 2021

✅ The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi gives ex-post facto approval for the Government amendments to the Finance Bill, 2021 (enacted on March 28, 2021 as the Finance Act, 2021). 

The Press Release can be accessed at: http://www.a2ztaxcorp.com/union-cabinet-approves-amendments-to-the-finance-bill-2021/

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19 April 2021 News and Updates

19th April 2K21

Ø  Brokerages downgrade India's GDP growth projections for FY'22 amid resurgence of Covid cases

Ø  Expect Religare Finvest's debt restructuring to be over in 2 months, says official

Ø  India's power consumption grows nearly 45% in first half of April

Ø  COVID-19 hits passenger vehicle exports; shipments tumble 39% in FY21

Ø  RCom lenders may challenge NCLAT order

Ø  Govt bans supply of oxygen to industries

Ø  Domestic steel output to take hit as plants divert oxygen for medical use

Ø  India to become top electric vehicle maker in the world: Nitin Gadkari

Ø  Future Retail lenders okay debt recast plan with repayment up to two years

Ø  NBFCs seek extension of MSME restructuring scheme till March 2022

Ø  Bank FDs in spotlight as returns of liquid funds hit two-decade low

Ø  India can be winner of new form of globalisation: Experts

Ø  SBI Caps to be transaction advisor for privatisation of JNPT’s container terminal

Ø  BHEL to procure 300 products worth ₹3,000 cr from MSMEs

Ø  China’s economic growth surged to 18.3% as activity revived

Ø  Individual CAs/firms cannot retain two consecutive audit rotation cycles

Ø  Commerce Min to meet exporters on Apr 20 to discuss export scenario

Ø  Tata Steel, SAIL, AMNS India supplying oxygen for treatment of Covid-19 patients

Ø  Jaypee Infratech insolvency: Lenders ask NBCC, Suraksha group to improve bid

Ø  Razorpay’s valuation triples in six months on latest fundraise

Ø  Bitcoin suffers big fall, down most in more than seven weeks

Ø  Exports by STPI units seen at Rs 5 lakh cr in pandemic-hit FY21 amid rapid digitisation

Ø  India takes ‘Whole-of-Government’ Approach against COVID-19

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⚫With the resurgence of COVID-19 cases posing risks to economic recovery, leading brokerages have downgraded India's GDP growth projections for the current fiscal year to as low as 10% on local lockdowns threatening fragile recovery.

⚫Bank FDs in spotlight as returns of liquid funds hit two decade low. 1-year returns down to less than 3.5%, below short-term rates offered by banks on FDs.

⚫States want the Centre to urgently convene a meeting of the GST Council after the chorus for rate cuts on key medicines and equipment grows louder.

⚫Remdesivir output to be doubled to 7.4 mn doses by April-end. 18 new sites get DCGI consent to make antiviral used for treating Covid.

⚫India reported 275,306  Covid-19 cases on Monday. Maharashtra and Delhi also recorded their biggest ever single day surge in cases.

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👉🏻RBI replies on RTI for signing of Non Audited Financials by CAs

(In reply to RTI on requirement of signing of project report, un-audited financials and certificate for utilisation of loan funds  vide Order No. DOR0021/04.03.001/2020-21 dated April 03 2021 RBI has replied on the same)

👇🏻 👇🏻 👇🏻

https://bit.ly/3v2GupC

👉🏻GST officers to be soon armed with real-time data on vehicles moving without e-way

(The government is working on a system to soon provide report to GST officers on a real-time basis for those vehicles which are moving without e-way bills, to help intercept stuck trucks at toll plazas and check GST evasion)

👇🏻 👇🏻 👇🏻

https://bit.ly/3dvWeLM

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CBDT Notified amendment in Income Tax Rule 2DB and Form No. 10BBA. 

https://update.babatax.com/Central_Board_Of_Direct_Tax(CBDT)_Notified_Income_Tax_Rule_2DB_and_Form_No._10BBA.

Income Tax: No Tax on Consideration received for compulsory acquisition of land & Building. Case Name : Madaparambil Varkey Varghese Vs ACIT (Kerala High Court)

Income Tax: Exempt income cannot be taxed merely for not mentioning in ITR ‘Schedule EI’. Case Name : Goodwill Management Pvt. Ltd. Vs DCIT (ITAT Bangalore). Appeal Number : ITA No. 670/Bang/2020. Date of Judgement/Order : 15/04/2021

No GST to be paid during Search & Seizure unless accepted as GST liability. Case Name : Shri Nandhi Dhall Mills India Private Limited Vs Senior Intelligence Officer,(Madras High Court) Appeal Number : W.P. No. 5192 of 2020. Date of Judgement/Order : 07/04/2021

Supreme Court rules balance sheets can amount to acknowledgment of debts under Section 18 of Limitation Act.  https://www.barandbench.com/news/litigation/supreme-court-v-padmakumar-nclat-balance-sheet-acknowledgment-of-debt

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👉🏻SC issues guidelines for cheque bounce cases, asks govt to amend laws

(SC came out with a slew of directions to ensure speedy disposal of cheque bounce cases across the country and asked the Centre to amend laws to ensure clubbing of trials in such cases if they are lodged against a person within a year)

👇🏻 👇🏻 👇🏻

https://bit.ly/3v26Ckv

👉🏻CBDT amends Income Tax rule 2DB and Form No.10BBA

(CBDT amends Income Tax  rule 2DB which relates to conditions to be satisfied by the pension fund for exemption under section 10(23FE) and substitutes/amends Form No. 10BBA)

👇🏻 👇🏻 👇🏻

https://bit.ly/2QuI3Oa 

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⚫PM reviewed the availability and supply of ventilators, oxygen and medicines to fight this pandemic and called for utilising the entire national capacity across private and public sectors to produce vaccines, amid concerns in various states about lack of these essentials. 

⚫Country's cyber security agency has cautioned WhatsApp users about certain vulnerabilities detected in the popular instant messaging app that could lead to breach of sensitive information.

⚫India witnessed a whopping 234,692 coronavirus cases within a span of 24 hours on Saturday.

⚫The COVID-19 situation in Delhi has become "very serious and worrisome", and oxygen, remdesivir and tocilizumab for patients are in short supply.The number of COVID-19 cases are rising rapidly with 24,000 fresh cases reported in the last 24 hours.

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CBDT has made Instant PAN allotment in near to real time available at free of cost. Individuals (other than minors) with a valid Aadhaar number (with updated Mobile number) can avail the PAN allotment facility. 

Income Tax : For Indexation of cost, Effective date is date of allotment of property. Case Name : L. Vivekananda M/s. Vivek Hotels Vs ACIT (ITAT Bangalore)

Indirect tax collections up by 12% in FY 2020-21; GST down by 8% amid COVID-19.

GSTN: Clarification on reporting 4-digit/6-digit HSNs.

GSTN: New features of Form GSTR-2B & GSTR-3B made available to taxpayers under QRMP Scheme.

GSTN: Updates in Forms GSTR-1, GSTR-3B and Matching Offline Tool for taxpayers in QRMP Scheme.

MCA Due date for DIN KYC is 30/09/2021 kindly get all KYC done within the time failing which there will be late fees of ₹ 5000/-. 

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👉Constitution of the Regulations Review Authority 2.0

https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51421

👉RBI releases Names of Applicants under the Guidelines for ‘on tap’ Licensing of Universal Banks and Small Finance Banks in the Private Sector

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51426

👉Announcement regarding Clarification with regard to applicability of the provisions of Section 139 of the Companies Act 2013 read with Rule 5 and 6 of the Companies (Audit and Auditors) Rules, 2014 by CL&CGC ICAI - (15-04-2021)

https://resource.cdn.icai.org/64473clcgc51714.pdf

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LEGAL-KNOWLEDGE CAPSULE

✒ Supreme Court issues direction for expeditious trial of cheque cases providing recommendation that suitable amendments be made* to the Act for provision of one trial against a person for multiple offences u/s 138.

✒ Supereme Court appoints senior Advocate Maninder Singh, Advocate Rajesh Batra as special public prosecutors in ED cases on coal block scam.

✒ Kerala High Court quashes only Male can apply condition saying women can not be denied employment on ground of Night shift working.

✒ Bombay High Court to continue hearing matters virtually till May 7.

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⚫The IMD said the 2021 southwest monsoon starting in June is expected to be normal at 98% of the Long Period Average. A good monsoon will mean another year of bumper farm production.

⚫The govt is now taking steps to increase the production of Covaxin by almost ten fold by Sept.

⚫Centre considers bringing PSBs under Companies Act. Changes are likely to be introduced in the Monsoon session.

⚫UK has signed off on the order to extradite Nirav Modi, wanted in India on fraud and money laundering charges.

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16 April 2021 News and Updates

16th April 2K21

 

Ø  WPI inflation spikes to over 8-year high of 7.39 per cent in March

Ø  India's exports surge 60% in March, fall by 7.2% in FY21

Ø  US jobless claims plunge to 576,000, lowest since pandemic

Ø  Mukesh Ambani's Reliance diverts oxygen for COVID fight, trucks stuck in Gujarat

Ø  RBI sets up RRA to streamline regulations and reduce compliance

Ø  IL&FS addresses debt of Rs 43,000 crore, raises recovery estimate to Rs 61,000 crore

Ø  Wipro Q4 profit jumps 28% YoY to Rs 2,972 crore; revenue rises 3.4%

Ø  India's 10-year yield spikes as RBI bond-purchase results disappoint

Ø  PFRDA set to provide a better option than annuities to NPS members

Ø  Four entities apply for universal bank, four others for SFB licence

Ø  Citigroup to exit retail banking operations in India, 12 other countries

Ø  Private equity, VC investments rise 64% to $8.3 bln in March qtr: Report

Ø  Tata Steel to rejig Corby tube plant in UK

Ø  Amazon unveils $250 million Smbhav Venture Fund for start-ups, entrepreneurs

Ø  Expenditure Dept gets direct control over Public Financial Management System

Ø  Worldwide semiconductor revenue grew 10.4% in 2020: Gartner

Ø  Ashok Leyland incorporates new unit for freight business

Ø  Hindustan Copper raises ₹500 crore via QIP

Ø  CSC, Tata Power to set up 10,000 solar micro grids in rural areas

Ø  Spintly raises Rs4.6 crore in funding led by Riso Capital

Ø  PepsiCo reports mid-single digit revenue growth in India

Ø  FIIs net sellers of equities in April so far as macro uncertainties loom

Ø  Cotton exports to jump 20 pc in 2020-21 season: CAI

Ø  Assets under NPS rose to 38% YoY till March 2021: PFRDA

Ø  Non-food credit growth slips below 6%

Ø  Traders’ body CAIT calls for 10-day lockdown in national capital to curb COVID cases

Ø  Green hydrogen auctions, purchase obligations in the offing

Ø  Sensex Ends Higher By 260 Points Led By IT And Pharma Stocks

Ø  Rupee Gains 12 Paise To Close At 74.93 Against US Dollar

Ø  India Inc's Outward FDI Halves To $1.93 Bn In Mar

Ø  Private equity inflows in India realty up 19% in FY21, portfolio deals lead

Ø  Coal India fuel allocation under spot e-auction rises 36% in Apr-Feb 2020-21

Ø  Maruti logs highest ever sales of CNG cars at 1.57 lakh units in FY21

Ø  A $12.5 billion deal shows Saudi oil still eclipses all else

Ø  Apollo to ship tyres from Chennai and Hungary for US/Canada markets

Ø  Religare Finvest to default on NCD payment

Ø  Dr Reddy's working on Sputnik's stability data

Ø  Bharti Airtel to merge digital arm with itself in corporate revamp

Ø  Infosys Q4 net dips 2% sequentially, announces Rs 9,200-cr share buyback

Ø  JSW Steel completes acquisition of 31% stake in Italy's GSI Lucchini SpA

Ø  SIP collections drop to Rs 96,000 cr in FY21 amid pandemic-led disruptions

Ø  Housing sales increase by 20% in January-March: 99acres .com report

Ø  GE Power India to acquire 50% equity stake in NTPC GE Power Services

Ø  Future Enterprises defaults on payment of interest on NCDs

Ø  Gujarat APMC yards suspend trading to tackle Covid second wave

Ø  WTO DG sets July target for pact, India insists on special treatment

Ø  Amazon moves SC against Delhi HC stay order restraining Future Retail

Ø  CCI nod for Adani Ports’ acquisition of 89.6% stake in Gangavaram Port

Ø  HDFC Bank to raise up to ₹50,000 crore via private placement of bonds

Ø  Insurtech startup Nova Benefits raises $1 million in fresh funding

Ø  IFC to invest $100 mn in JC Flowers India fund to help resolve NPAs

Ø  MFs increased fund allocation in domestic cyclicals, IT in FY21

Ø  Office leasing in 7 cities falls 48% in Jan-Mar: Report

Ø  Aditya Birla Capital, Sun Life to sell 13.5% stake in asset management biz IPO

Ø  Centre’s tax revenue grows in pandemic year

Ø  India, EU to resume formal FTA talks in May

Ø  India’s palm oil imports rise 56.50 pc in March

Ø  Govt To Sell 20 % In NFL, 10 Pc In RCF Via Offer For Sale

Ø  NCLAT Says Lenders Cannot Treat Telcos' Spectrum As 'Security Interest' Under Insolvency Proceedings

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👉🏻NLIU becomes first IBBI approved university to offer Graduate Insolvency Program

(IBBI formally approved NLIU for conducting the Graduate Insolvency Program (GIP) from the academic session 2021-2022. NLIU is the first University approved by the IBBI to offer the Graduate Insolvency Program)

https://bit.ly/3djGOu8

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#INDIRECT TAXATION: 

 • Recently, the Fastag data has been integrated with the e-way bill system. On a daily average, 24 Lakh Fastag transactions from 826 toll plazas, related to commercial vehicles are exchanged between NPCI/NHA and NIC systems. These details will help the GST officers to track the movement of e-waybills using the new analytical reports.

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MCA eyes revamp of compliance regime

🍥A mobile app for corporate filings*, pre-filled forms and fewer compliances — after an exercise to cut down on the number of criminal offences under company laws, the Ministry of Corporate Affairs is proposing a complete revamp of the compliance system for corporates to ease doing business for them.

▶️ A senior government official told ET that the new system with these features would be rolled out from October. 

🪃It will significantly bring down compliance requirements for companies and will be a "more trust-based system", the official added.

🪁The proposed system would be able to alert companies of any errors in filings and also be able to profile a company and assess its risk of defaulting. 

🎛️The ministry has been conducting a study to explore ways to rationalise the number of compliance forms. Based on its findings, changes would be incorporated in the October rollout.

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♦️The new MCA21 V3 platform that replaces MCA21 V2 will be deployed in two phases

🌟A revamped website with features including e-consultation and e-books will be launched during April-May, while more comprehensive features like pre-filled web-based forms and the mobile app will be rolled out by October, the official said.

✒️“Major things like the company module, LLP (limited liability partnership) module, enforcement module, compliance management system, everything will come online in October,” another official said.

🎟️While certain fields such as the balance sheet and profit and loss account figures will have to be manually filled in, most forms on the portal will be converted into pre-filled web forms from the current PDF versions, which is expected to bring down the time and resources spent on compliance.

▶️ The update will signal a shift to a more trust-based regime by doing away with attachments of various reports for verification, albeit with adequate checks.

🔰The mobile app would come with features like e-consultation allowing users to provide feedback on draft bills directly online, an e-book for instant reference and sharing of all Acts and rules relating to company affairs and access to the registry of master data, the officials said.

🖋️Most of the front-facing features of the website would be incorporated in the app, but these would include only simpler forms since placing digital signature certificates via mobile would be difficult, the first official said.

🚄This would be further aided by the recently *amended disclosure rules under Schedule III of the Companies Act, which require firms to disclose debt ageing

https://www.google.com/amp/s/m.economictimes.com/news/economy/policy/mca-eyes-revamp-of-compliance-regime/amp_articleshow/82037786.cms

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All claims not part of resolution plan get extinguished on approval of resolution plan by Adjudicating Authority under S. 31 IBC: Supreme Court

The Supreme Court on Tuesday held that once a resolution plan is approved by the Adjudicating Authority under Section 31(1) of the of Insolvency and Bankruptcy Code, 2016 all claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. 

Read more at https://bit.ly/328j4Cz

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MCA is proposing the following new System From June and October, 2021:-

• MCA Version 3 would alert companies of any errors in filings 

• It will profile a company and assess its risk of defaulting. 

• The ministry will reduce number of forms substantially  from October.

• E-consultation and E-books will be launched in MCA in May, 

• All form will be pre-filled web-based forms and 

• Mobile app will be rolled out by October

• Enforcement module and  compliance management system come online in October,

• Only limited forms like filling of the B/s and P&L figures will have to be manually filled in.

• All other forms on the portal being  converted into pre-filled web forms from the current PDF versions, 

• All the above will bring down the time and resources spent by CS on compliance.

• MCA is keen to shift to a more trust-based regime by doing away with attachments of various reports for verification, albeit with adequate checks.

• Mobile app would come with features like e-consultation allowing users to provide feedback on draft bills directly online, 

• E-book for instant reference and sharing of all Acts and rules relating to company affairs 

• Complete Access to the registry of master data.

• Front-facing features of the website would be incorporated in the app, but these would include only simpler forms since placing digital signature certificates via mobile would be difficult.

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Market Outlook

In yesterday's session after opening with a positive note and gained  135 points in early session and touched the level of 14445.

After touching the level of 14445 market have a dip and took support above 14264 which was the intraday low of 25- Mar-21.

After taking support at 14264 nifty saw a strong recovery in the second half and gained more than 200 points on intraday basis and closed above 14500.

But, Nifty is still below its 30 days moving average of 14806 which will act as a  resistance.

One thing which is clear from the yesterday's session is that 14264 will act as a short term support for Nifty. 

There was a broader participation in the recovery. Which make our Conviction stronger that this year is going to be the year of Small Cap companies. 

We will see lot of small cap companies turning out to be Multibagger in this year.

So, we advice to search out for the fundamentally strong small cap companies and allocate Upto 30-40 percent to small and Midcap companies  for getting handsome return.

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✅Failure to Produce Necessary Documents will lead to Cancellation of Registration for Supply of Goods: MP HC (Om Trading).

✅GST collections to drop 20% in May due to state lockdown-like curfews, say experts.

✅GST rate tussle over flavoured milk. Authorities for Advance Rulings of Gujarat, TN and AP rule 12%, Karnataka goes for 5%.

✅18% GST on Parboiling Rice & Drying plant: KAAR.

✅System generated returns under GST to accelerate digitization; more GST reforms may boost taxpayer confidence.

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⚫The Indian health regulator will take a decision within three working days of a foreign vaccine maker seeking emergency use approval. Import licence and registration certificates will be processed within three working days of the approval. In addition, bridging clinical trial protocols must be cleared within seven working days for vaccines approved by international regulators.

 ⚫LIC employees wage revision proposal gets approval from Govt. The Govt has given a go ahead to a five day working week for LIC employees.

⚫The second wave: Covid-19 testing labs look at ways to ramp up capacity. Now demand is growing almost 100% week-on-week, leading to a testing crisis.

⚫India reported 216,850  Covid-19 cases, the highest single-day spike so far since the pandemic broke out.

⚫Rajasthan CM announced a weekend curfew in the state from April 16 to April 19, in view of rising COVID-19 cases.

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Form CSR 1 applicability:

As per Rule 4 of Companies (Corporate Social Responsibility Policy) Rules, 2014, from 01.04.2021 CSR Funding will be released only to that NGOs, that are registered with MCA by filing Form CSR-1. 

 

Following entries are entitled to file form CSR 1:

(a) A company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company. 

(b) A company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government. 

(c) Any entity established under an Act of Parliament or a State legislature. 

(d) A company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and has an established track record of at least three years in undertaking similar activities.

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15 April 2021 Updates

👉 New features of Form GSTR-2B & GSTR-3B made available to taxpayers under QRMP Scheme

https://www.gst.gov.in/newsandupdates/read/464

👉 Updates in Forms GSTR-1, GSTR-3B and Matching Offline Tool for taxpayers in QRMP Scheme

https://www.gst.gov.in/newsandupdates/read/466

👉 Publication of notice u/s 75 of the LLP Act, 2008 read with Rule 37 (2) of Limited Liability Partnership Rules, 2009Pdf(283 KB)

http://www.mca.gov.in/Ministry/pdf/RocHimachalRule37_13042021.pdf

👉 14th April, 2021 - Closed Holiday - (13-04-2021)

https://resource.cdn.icai.org/64462icaihr130421.pdf

👉 ICAI International Research Awards 2021 organised by Research Committee (Last Date for Nomination: May 31, 2021) - (13-04-2021)

https://resource.cdn.icai.org/64459research-awards-2021.pdf

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Income Tax Assessing Officer cannot treat Long Term Capital Gain as Bogus merely on SEBI investigation report. Case Name : M. Kiran Kumar Vs ACIT (ITAT Chennai)

GST Return: CBIC updates Forms GSTR-1, GSTR-3B, and Matching Offline Tool for Taxpayers in QRMP Scheme. 

Sebi came out with fresh guidelines on reporting formats for mutual funds. The formats for the reports to be submitted by asset management companies (AMCs) to trustees, by AMCs to Sebi and by trustees to the regulator have been revised on the basis of consultation from the industry.

Rupee crossed 75 a dollar on Monday as local equities markets witnessed a huge sell-off. The local currency closed at 75.06 a dollar, from its previous close of 74.73 a dollar. In intraday trade, the rupee fell to 75.145 a dollar. Sensex, the benchmark equity index of the BSE, fell 1707.94 points, or 3.44 per cent, to close at 47,883.38 points. 

Indian economy’s recovery is likely to be ‘K-shaped’ instead of a ‘V,’ as rising inequality is poised to hit consumption and growth prospects, according to the country’s former central bank Governor Duvvuri Subbarao. “An important consequence of the pandemic has been the sharpening of inequalities,” he said in an interview Friday. “Growing inequalities are not just a moral issue. 

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⚫E-commerce firms witness 2X rise in orders, gear up for second Covid wave. Maharashtra and Delhi, which reported most cases, have taken the lead in terms of the demand from customers ordering essentials and groceries online.

⚫IOC to buy Guyanese crude as India doubles up on cutting Opec dependence. This deal is at competitive rates and is in line with the strategy to have multiple sources of crude oil for Indian refiners.

⚫Fund raised through public and rights issues surged 115% and 15%, respectively, in 2020-21 despite the uncertainty due to the COVID-19 pandemic.

⚫Breaking all records, India registered its biggest ever single day spike with 199,569 fresh cases. Delhi recorded highest ever coronavirus diseases cases, breaking its own previous daily spikes.

⚫The CBSE cancelled class 10 exams and postponed class 12 exams in view of surge in Covid-19 cases. The result will be prepared on the basis of an objective criterion developed by the board.

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14 April 2021 Updates

Income Tax Assessing Officer  cannot treat Long Term Capital Gain (LTCG) as Bogus by treating a company as penny stock company without any evidence. Case Name : ITO Vs Shivani Gupta (ITAT Delhi)

Income Tax Provision of Faceless Appeal apply to only Income Tax Act, 1961. The following acts not included in the Scope of Faceless Appeal:

Wealth-tax Act, 1957;

Interest-tax Act, 1974;

Gift Tax Act,1958;

Expenditure-tax Act,1987;

Securities Transaction Tax in Chapter VII of Finance (No. 2) Act, 2004;

Commodities Transaction Tax in Chapter VII of Finance Act, 2013 and

Equalisation Levy in Chapter VIII of Finance Act, 2016.

Mandatory Registrations for NGOs after 01.04.2021 – Form CSR-1, Section 80G and Section 12AB of Income Tax Act. As per Notification issued by Ministry of Corporate Affairs dated 22nd January 2021, it is mandatory for all NGO’s which wants to raise CSR Funding to enrol with MCA w.e.f 01/04/2021 to get CSR Funding. And Filing of Form CSR-1 has been started on MCA portal and a huge number of NGOs has already enrolled with MCA.

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⚫Goldman Sachs has flagged a slew of concerns on the surging COVID-19 caseload that has been hitting new records everyday, coupled with the rising lockdowns, forcing it to downgrade India's GDP growth forecast for the full year to 10.5%, apart from pegging down stock indices valuation and earnings.

⚫The Centre’s indirect tax collection rose by more than 12% to Rs 10.71 trillion in FY21, even as GST mop-up declined by 8%.

⚫The Govt has initiated the process for inviting financial bids for the sale of Air India and the deal is likely to conclude by September.

⚫The Govt allowed emergency use of foreign Covid-19 vaccines through a fast-track route, striking off the need for a prior local trial. 

⚫India recorded its biggest ever single day spike with 185248 fresh cases.The Maharashtra Govt has imposed lockdown-like curbs in the state from 8pm today. Section 144 has been imposed in the state and only essential services will be allowed for the next 15 days.

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MCA is proposing the following new System From June and October, 2021:-

👉 MCA Version 3 would alert companies of any errors in filings 

👉 It will profile a company and assess its risk of defaulting. 

👉 The ministry will reduce number of forms substantially  from October.

👉 E-consultation and E-books will be launched in MCA in May, 

👉 All form will be pre-filled web-based forms and 

👉 Mobile app will be rolled out by October

👉 Enforcement module and  compliance management system come online in October,

👉 Only limited forms like filling of the B/s and P&L figures will have to be manually filled in.

👉 All other forms on the portal being  converted into pre-filled web forms from the current PDF versions, 

👉 All the above will bring down the time and resources spent by CS on compliance.

👉 MCA is keen to shift to a more trust-based regime by doing away with attachments of various reports for verification, albeit with adequate checks.

👉 Mobile app would come with features like e-consultation allowing users to provide feedback on draft bills directly online, 

👉 E-book for instant reference and sharing of all Acts and rules relating to company affairs 

👉 Complete Access to the registry of master data.

👉 Front-facing features of the website would be incorporated in the app, but these would include only simpler forms since placing digital signature certificates via mobile would be difficult.

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✅ New features of Form GSTR-2B & GSTR-3B made available to taxpayers under QRMP Scheme - Auto Generation of Form GSTR-2B  and Auto-population of ITC in Form GSTR-3B for the QRMP taxpayers

✅ Clarification on reporting 4-digit/6-digit HSNs

https://www.gst.gov.in/newsandupdates/read/463

✅ Insolvency and Bankruptcy (Pre-Packaged Insolvency Resolution Process) Rules, 2021Pdf(1.9 MB)

http://www.mca.gov.in/Ministry/pdf/InsolvencyandBankruptcyRules_12042021.pdf

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

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Thanks for reading

13 April 2021 News and Updates

13th April 2K21

Ø IIP contracts 3.6% in February, retail inflation for March climbs up to 5.5%

Ø Vedanta signs pact with research institutes for value-extraction from bauxite residue

Ø Lenders uncomfortable with land bank offer in JP Infra resolution

Ø Pandemic pushes India's passenger vehicle sales to six-year low

Ø HFCs likely to witness growth of 8-10%: Report

Ø MCA eyes revamp of compliance regime

Ø ONGC seeks buyers for KG gas, wants minimum $6.6 price

Ø TCS reports 15% rise in Q4 net at Rs 9,246 cr; declares dividend of Rs 15

Ø Rupee falls below 75 to dollar on massive equity sell off; RBI intervenes

Ø India must capture all segments of financial market to fuel growth: IMF

Ø Sebi comes out with new guidelines on reporting formats for mutual funds

Ø Nomura cuts India's 2021 GDP forecast to 11.5%; sees higher inflation

Ø Vodafone Idea to pay balance license fee by April 15 with interest

Ø India becomes largest buyer of US crude in first quarter of calendar year 2021

Ø Ambuja Cements takes the lead among Indian fleets to use biofuels

Ø Man Industries bags new order worth ₹766 cr

Ø Auto hub starved of industrial oxygen as Covid-19 crisis worsens

Ø Biocon Pharma gets GMP compliance certificate from MHRA

Ø OneWeb signs MoU with Kazakhstan Government to digitise its economy

Ø Sebi fines Yes Bank ₹25 crore for fraudulent sale of riskier bonds

Ø Microsoft to buy Siri's AI developer in deal worth $19.7 billion

Ø SEBI warns investors against fraudsters posing as officials, demanding money

Ø CCI clears Rising Sun Holdings’ purchase of Magma Fincorp

Ø Coforge to acquire 60% stake in SLK Solutions for Rs918 crore

Ø BSE Star MF glitch disrupts thousands of mutual fund orders

Ø Sensex tanks over 3%, Bank Nifty tumbles 1,650 pts; bloodbath on D-St wipes out Rs 8 lakh cr investor wealth

Ø BPCL to cut crude imports from West Asia to 50% from 65%

Ø Passenger Vehicle Sales In India Decline By Over 2 % In 2020-21: SIAM

Ø India Exports 2.49 Mn Tonne Of Sugar So Far, Maximum To Indonesia: AISTA

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DECODING OF NEW REGISTRATION FORMS FOR TRUST. If a trust is already registered u/s 12 AA and has filed return of income for AY 20-21 then 

No need to file copy of Balance Sheet. 

Income Tax: No TDS default if Bank not deducts TDS of customer who furnishes Form 15G/15H even if their Interest Income exceeds taxable limit. Case Name : Allahabad Bank Vs ITO (ITAT Delhi)

GST: Fastag data has been integrated with the e-way bill system. On a daily average, 24 Lakh Fastag transactions from 826 toll plazas, related to commercial vehicles are exchanged between NPCI/NHA and NIC systems. These details will help the GST officers to track the movement of e-way bills using the new analytical reports.

Central Board of Indirect Taxes and Customs has issued a Notification No. 41/2021 Custom (N.T) – dated April 05, 2021 Seeks to notify Customs (Verification of Identity and Compliance) Regulations, 2021. These regulations mandate compulsory identity authentication for Importer, Exporter and Customs Broker and also lay down the process for the same.

CA Students who have not yet converted themselves from Earlier Scheme to Revised Scheme of Education and Training implemented w.e.f. 1st July, 2017 to appear in Foundation, Intermediate and Final Examinations being held under Revised Scheme in May/June, 2021 are required to convert themselves latest by 12th April, 2021.

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⚫The retail price inflation rate rose to a four-month high of 5.52% in March due to upward movement in core as well as food rates, barring vegetables and cereals. This may prevent the central bank's monetary policy committee from cutting the policy rates unless growth really takes a hit due to regional lockdowns in 2021-22.

⚫Cabinet to take up divestment of 45.5% stake in debt-laden IDBI Bank soon. The Govt had planned to sell its stake in IDBI Bank to private, retail, and institutional investors through the stock exchange.

⚫Paytm Payments Bank registers over 970 million transactions in March 2021. PPBL is also averaging 1 million savings and current accounts a month, and with over 64 million accounts.

⚫Invest in spouse or child's name to avail of exemption, both Sec 54 and 54F allow taxpayers to claim exemption from tax on long-term capital gains.

⚫India's Subject Expert Committee cleared Sputnik V for emergency use against Covid-19, making it the third approved vaccine in the country.

⚫India is now the 2nd worst-hit nation in terms of total Covid-19 cases and 3rd-worst hit country in terms of active cases.

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12 April 2021 News and Updates

12th April 2K21

Ø  Govt may hike FDI limit in pension sector to 74%; Bill likely in monsoon session

Ø  Partial lockdown measures could impact movement of labour, goods: CII survey

Ø  Govt to complete 5 surveys in 7 months on jobs: Labour Bureau DG

Ø  Bridgestone India unlocks 7 million euros in 9 months, helped by digital payment platform Freepay

Ø  Tata Sons build marketplace for SMEs

Ø  RMZ raises Rs 1,500 crore from Canada Pension Plan Investment Board

Ø  Vedanta Group in talks with govt to set up display fabrication unit

Ø  Infosys to consider share buyback on April 14, announce FY21 results

Ø  Govt's move to inject Rs 14,500 cr in 4 PSBs won't raise tangible equity

Ø  Microsoft in talks to buy Nuance Communications for about $16 bn: Report

Ø  InsuranceDekho may have got Rs 1,200 cr in premium in FY21: Co-founder

Ø  Franklin Templeton unitholders to get Rs 2,962 cr in second tranche

Ø  India becomes largest buyer of US crude in first quarter of calendar year 2021

Ø  Exports surge 297% in the first week of April

Ø  India's power consumption grows nearly 47 per cent in first week of April 2021

Ø  Indian apparel industry eyes collaboration with global suppliers of man-made fibre 

Ø  Arbitration case: Cairn to forego $500 million if India agrees to pay principal due

Ø  SBI collects ₹300 cr from zero balance accounts for certain services in 5 yrs

Ø  Mutual fund assets gain 41% in FY21: Crisil report

Ø  Future Retail may get 2-yr relief on loan repayments

Ø  Myanmar economy may shrink up to 20% as crisis looms

Ø  JC Flowers is highest bidder for SIL’s debt

Ø  Centre prohibits export of Remdesivir injection and Remdesivir API

Ø  Large CPSEs post record capex of 4.6 lakh crore in FY21

Ø  Over Rs 35,000-crore export aid held up amid trade recovery

Ø  IMF warns on rising debt risks in virus-hit Middle East, Central Asia

Ø  Ambuja Cement's Strategic Plan On Track To Expand Capacity To Reach 50 MTPA

Ø  FM Urges World Bank Group To Sustain Crisis Response To Mitigate COVID-19 Impact

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👉RBI announces Open Market Purchase of Government of India Securities under G-sec Acquisition Programme (G-SAP 1.0)

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51394

👉RBI to conduct 14-day Variable Rate Reverse Repo auction under LAF on April 09, 2021

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51393

👉Enhancement of limit of maximum balance per customer at end of the day from ₹1 lakh to ₹2 lakh – Payments Banks (PBs)

https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12074&Mode=0

👉Engagement of Young Professionals (YPs) in Ministry of Corporate Affairs on contract basis.Pdf(221 KB)

http://www.mca.gov.in/Ministry/pdf/VacancyCircularYPs_09042021.pdf

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⚫The Govt may hike FDI limit in the pension sector to 74%.

⚫Foreign portfolio investors have withdrawn a net Rs 929 crore from Indian markets so far this month amid rising Covid-19 cases denting the economic recovery.

⚫India banned exports of drug Remdesivir, used to treat moderate to severe Covid-19, amid rising domestic demand and reports of shortages from states.

⚫Insurers brace for rise in Covid-19 policy claims. The insurers have received more than a million Covid related claims as of April, 2021.

⚫Bengaluru lone bright spot in direct tax mop-up with 7.3% growth.

⚫Migrants going back can spice up panchayat polls in UP. The UP panchayat polls will be held in four phases in 75 districts from April 15.

⚫Retail broking firm Upstox has alerted customers of a security breach that included contact data and KYC details of customers, but assured users that their funds and securities remain safe.

⚫The HP govt made it mandatory for people coming from seven states which have witnessed a spike in coronavirus cases to show a COVID-19 negative test report on entering the state.

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11 April 2021 Updates

👉RBI announces Open Market Purchase of Government of India Securities under G-sec Acquisition Programme (G-SAP 1.0)

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51394

👉RBI to conduct 14-day Variable Rate Reverse Repo auction under LAF on April 09, 2021

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51393

👉Enhancement of limit of maximum balance per customer at end of the day from ₹1 lakh to ₹2 lakh – Payments Banks (PBs)

https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12074&Mode=0

👉Engagement of Young Professionals (YPs) in Ministry of Corporate Affairs on contract basis.Pdf(221 KB)

http://www.mca.gov.in/Ministry/pdf/VacancyCircularYPs_09042021.pdf

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E way bill Alert: Fastag Data has been Integrated with E-Way Bill System to Track the Movement

The Press Information Bureau has published that “Recently, the Fastag data has been integrated with the e-way bill system. On a daily average, 24 Lakh Fastag transactions from 826 toll plazas, related to commercial vehicles are exchanged between NPCI/NHA and NIC systems. These details will help the GST officers to track the movement of e-waybills using the new analytical reports.”

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⚫Union Agriculture Minister appealed to the farmers protesting at Delhi borders to call off their long running agitation, saying the Govt is ready for a discussion whenever they come with a concrete proposal.

⚫The March quarter earnings season will begin in the coming week. 21 Co's will announce earnings. Overall the earnings season is expected to be strong but the key thing to watch out for would be the management commentary about FY22.

⚫The Govt may redraw the recapitalisation roadmap for public sector banks in the current fiscal as the institutions face additional burden to meet interest on interest obligation for all its borrowers while changes in valuation norms AT1 bonds by Sebi will make the instrument less attractive for banks to raise their capital.

⚫The Rs 2,500-crore IPO of Macrotech Developers (erstwhile Lodha Developers) got a lukewarm response from investors with the issue garnering just 1.37 times subscription. This is the least for any IPO in 2021.

⚫Maharashtra CM indicated the imposition of a strict lockdown in the state given the alarming rise in COVID-19 cases.

⚫With the total number of COVID-19 vaccine doses administered in the country crossing 10 crore, India is the fastest nation to administer 100 million doses in 85 days.

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👆  #Customs_News

DGFT has mandated all IEC holders to update their Importer-Exporter Code(IEC) yearly between April to June.  IECs not updated within this prescribed period would be de-activated. 

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👉🏻Constitutional validity of arrest rules under GST challenged in Supreme Court

(Companies have argued against the constitutional validity of arrest provisions under the goods and services tax (GST) laws in their present form in the Supreme Court)

👇🏻 👇🏻 👇🏻

https://bit.ly/3uvhIOo

👉🏻Centre sets Rs. 10 lakh trigger for MSME rescue scheme

(The Central government set a payment default of ₹10 lakh as the trigger for bankruptcy proceedings of small businesses under the new simplified scheme called pre-packs)

👇🏻 👇🏻 👇🏻

https://bit.ly/3uz6qIZ

👉🏻Amendments related to Religious and Charitable Trust.

(Amendments related to Religious and Charitable Trust as per Finance Act, 2021discussed by CA. Vidhu Duggal)

👇🏻 👇🏻 👇🏻

https://youtu.be/MFCrzuEzKX4  

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⚫India closed the f/y 2020-2021 with a 9% decline in total fuel consumption over the same period last year. This fall is primarily attributed to Covid-19 lockdowns induced slump in economic activities. India’s total fuel consumption stood at 194.63mt during the year under review, down from 214.13 mt a year ago. 

⚫Crackdown on tax evaders: I-T notices to holders of foreign assets. Seek action under black money and benami laws for non-disclosure.

⚫Commercial banks in India gave loans of almost 1.55 trillion in the last fortnight of the financial year, reflecting a surge in year end activity. The total lending was Rs 5.80 trillion in Fy21 lower than about Rs six trillion in Fy20. The outstanding credit stood at Rs 109.51 trillion as of March 26, 2021. On a yoy basis, the lending by commercial banks rose by 5.6% in the Fy21, a period marked by economic contraction due to pandemic as against 6.1% in Fy20.

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✅All TDS rates were reduced by 25% from May 14, 2020 to March 31, 2021 due to covid. Therefore TDS was deductible at 3.75% instead of 5% till March, 2021. Now full rate w.e.f. 1st April, 2021.

✅ FASTag data has been integrated with the e-way bill system. On a daily average, 24 lakh transactions related to commercial vehicles from 826 toll plazas are  exchanged with NIC.

✅HSN code/ SAC mandatory on tax invoices as per revised requirement from 1st April 2021

✅Penalty for non-compliance of provisions for Dynamic QR Code to be waived off till 30th June 2021, if provisions are complied with from July 1, 2021

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9 April 2021 News and Updates

👉🏻GST no longer citizen-friendly; calls provisional attachment Draconian - SC

(The Supreme Court on Tuesday slammed the manner in which the Goods and Services Tax was being enforced by tax authorities and observed that the taxman cannot see all businesses as being fraudulent)

👇🏻 👇🏻 👇🏻

https://bit.ly/31VC9rI

👉🏻Asset Classification and Income Recognition following the expiry of Covid-19 regulatory package

(RBI issued Notification, No. RBI/2021-22/17 DOR.STR.REC.4/21.04.048/2021-22 dated 07/04/2021 with regards to Supreme Court Judgement dated 23-03-2021)

👇🏻 👇🏻 👇🏻

https://bit.ly/3sYSw2I

 

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 🔰 Advisory on payment of tax by taxpayers under QRMP Scheme, for the month of March, 2021

✅ The Goods and Services Tax Network (GSTN) has issued Advisory dated April 08, 2021 on payment of tax by taxpayers under Quarterly Return Monthly Payment of Taxes (QRMP) Scheme for the month of March, 2021.

The Advisory can be accessed at: http://www.a2ztaxcorp.com/advisory-on-payment-of-tax-by-taxpayers-under-qrmp-scheme-for-the-month-of-march-2021/

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E-KNOWLEDGE CAPSULE

✒ SEBI imposes Rs. 25 Crore penalty on Mukesh Ambani, Anil Ambani and others 

for violation of Takeover Regulations.

✒ Bombay High Court directs Maharashtra Govt., Police and BMC that habit of spitting in public should be ended, and hence levy at hefty penalties.

✒ Supreme Court uphold rape conviction saying nothing on record to even remotely suggest that the Act was consenual.

✒ Delhi High Court refuses to quash criminal defamation case against Arun Purie for allegedly defamatory article in India Today filed by former Indian diplomat.

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⚫PM urged state Govts to test more even if that meant higher reporting of the infection. Armed with experience of managing the first wave, better health infrastructure and a locally manufactured vaccine, lockdowns should be avoided altogether, the PM told chief ministers at the virtual meet on Covid.

⚫Privatisation of two public sector banks on meeting agenda next week.

⚫Equity oriented schemes in March have reported net inflows of Rs 9,115 crore.

⚫Co's have argued against the constitutional validity of arrest provisions under the GST laws in their present form in the Supreme Court.The court took up the matter of arrest provisions and applicability of  the CrPC to the Customs Act, GST and the PMLA and other allied laws.

⚫India recorded 131893 Covid cases.Delhi logged 7,437 cases in its highest single day spike this year Maharashtra added 56,286 new cases.

⚫FinMin requests home, health ministries to vaccinate bank staff on priority. 600 bank personnel died due to Covid-19 till December.

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8 April 2021 Updates

Govt. introduces a Pre-Packaged Insolvency Resolution Process for Corporate Persons classified as MSME – The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 – 04.04.2021

Preamble of the Ordinance that it is considered expedient to provide an efficient alternative insolvency resolution process for corporate persons classified as micro, small and medium enterprises under the Insolvency and Bankruptcy Code, 2016, ensuring quicker, cost-effective and value maximising outcomes for all the stakeholders, in a manner which is least disruptive to the continuity of their businesses and which preserves jobs; In order to achieve these objectives, it is considered expedient to introduce a pre-packaged insolvency resolution process for corporate persons classified as micro, small and medium enterprises.

https://ibclaw.in/govt-introduces-a-pre-packaged-insolvency-resolution-process-for-corporate-persons-classified-as-msme-the-insolvency-and-bankruptcy-code-amendment-ordinance-2021-04-04-2021/

[ https://www.moneycontrol.com/news/business/economy/covid-19-impact-government-introduces-ordinance-on-pre-pacs-for-ditressed-msme-firms-under-ibc-6729341.html

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Key Highlights of IBC Ordinance on 04/04/2021 Pre-Packaged IRP for distressed MSMEs under IBC 2016

Objective 1. To ensure quicker, cost-effective and value maximising for all 

    2. Least disruptive to the continuity of MSME businesses and preservation of the jobs

Key highlights:

1.  CG shall notify the minimum amount for initiation of Pre-Packaged IRP, which shall not exceed one crore rupees.     

2. New CHAPTER III-A PRE-PACKAGED INSOLVENCY RESOLUTION PROCESS”, which provide for-

a. Eligibility criteria

b. Duties of RP before initiation and after the initiation.

c. Time-limit for completion: Within 120 days from commencement date

d. Creditor- approved resolution plan shall be submitted to AA: within 90 days

e. Procedure for Declaration of moratorium and public announcement during the pre-packaged IRP

f. Conditions subject to which the BOD / partners of CD manage the affairs of the CD as a going concern, exercise and discharge their contractual duties and statutory rights etc.

g. Time limit for Constitution of CoC and their rights including the passing of resolution to vest the management of the CD with the RP, initiation of CIRP. Voting for termination of pre-packaged IRP etc. 

h. Procedure for consideration and approval of resolution plan

i. Penal provisions to be levied by the AA on the officer of the CD, on an application by the RP on and after the PP ICD that he/she manages its affairs with the intent to defraud creditors of the CD or for any fraudulent purpose.

[04/04] *Govt. introduces a Pre-Packaged Insolvency* Resolution Process for Corporate Persons classified as MSME – The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 – 04.04.2021

MINISTRY OF LAW AND JUSTICE

(Legislative Department)

New Delhi, the 4th April, 2021/Chaitra 14, 1943 (Saka)

THE INSOLVENCY AND BANKRUPTCY CODE (AMENDMENT) ORDINANCE, 2021

NO. 3 OF 2021

Promulgated by the President in the Seventy-second Year of the Republic of India.

An Ordinance further to amend the Insolvency and Bankruptcy Code, 2016.

WHEREAS COVID-19 pandemic has impacted businesses, financial markets and economies all over the world, including India, and has impacted the business operations of micro, small and medium enterprises and exposed many of them to financial distress;

AND WHEREAS the Government has taken several measures to mitigate the distress caused by the pandemic, including increasing the minimum amount of default for

initiation of corporate insolvency resolution process to one crore rupees, and suspending filing of applications for initiation of corporate insolvency resolution process

in respect of the defaults arising during the period of one year beginning from 25th March 2020;

AND WHEREAS such suspension for filing of applications for initiation of corporate insolvency resolution process has ended on 24th March 2021;

AND WHEREAS the country has shown remarkable resilience, be it tackling the pandemic or ensuring economic recovery;

AND WHEREAS micro, small and medium enterprises are critical for India’s economy as they contribute significantly to its gross domestic product and provide employment to a sizeable population;

AND WHEREAS it is considered necessary to urgently address the specific requirements of micro, small and medium enterprises relating to the resolution of their insolvency, due to the unique nature of their businesses and simpler corporate structures;

AND WHEREAS it is considered expedient to provide an efficient alternative insolvency resolution process for corporate persons classified as micro, small and medium enterprises under the Insolvency and Bankruptcy Code, 2016, ensuring quicker, cost-effective and value maximising outcomes for all the stakeholders, in a manner which is least disruptive to the continuity of their businesses and which preserves jobs;

AND WHEREAS in order to achieve these objectives, it is considered expedient to introduce a pre-packaged insolvency resolution process for corporate persons classified as micro, small and medium enterprises;

AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action;

 Pre-Packaged Insolvency Resolution Process for MSMEs 

The Ordinance still went ahead and provided this exemption to MSMEs applying for pre-pack resolution process, thereby allowing promoters with NPAs to also participate in the resolution process. This, in the authors’ view, is a step forward in realizing the objective of introducing pre-pack insolvency. The idea is to allow the corporate debtors to retain control of the management and to ensure its revival, without having to undergo the lengthy insolvency process under the IBC. By allowing the promoters to remain in control of the resolution process by adopting the pre-pack route, the Ordinance prevents a huge drain in the already limited resources of the corporate debtor, therefore incentivizing the promoters to act in the best interest of the debtor. Considering that most MSME defaults do not meet the current threshold prescribed under the Code, and most resolution applicants are not interested in revival of distressed MSMEs, allowing the promoters of the MSMEs to submit resolution plans would maximize the survival rate of the MSMEs.

https://ibclaw.in/pre-pack-insolvency-resolution-process-for-msmes/ Important Provisions of MSME Pre-packaged Insolvency Resolution Process

Summary of important provisions of pre-packaged Insolvency Ordinance, 2021.

https://ibclaw.in/important-provisions-of-msme-pre-packaged-insolvency-resolution-process/

Follow our LinkedIn page for more updates: https://www.linkedin.com/company/ibclaw

: *We examine pre-packs and their impact on the insolvency resolution process*.

The central government has promulgated an ordinance allowing the use of pre-packs as an insolvency resolution mechanism for Micro, Small and Medium Enterprises (MSMEs) with defaults up to Rs 1 crore, under the Insolvency and Bankruptcy Code.

The move comes soon after the end of a one-year suspension of insolvency initiation imposed by the government in light of the Covid-19 pandemic. The government had last year also increased the minimum default threshold for insolvency proceedings from Rs 1 lakh to Rs 1 crore.  We examine pre-packs and their impact on the insolvency resolution process.

What are pre-packs?

A pre-pack is the resolution of the debt of a distressed company through an agreement between secured creditors and investors instead of a public bidding process. This system of insolvency proceedings has become an increasingly popular mechanism for insolvency resolution in the UK and Europe over the past decade. Under the pre-pack system, financial creditors will agree to terms with a potential investor and seek approval of the resolution plan from the National Company Law Tribunal (NCLT).

The approval of a minimum of 66 per cent of financial creditors that are unrelated to the corporate debtor would be required before a resolution plan is submitted to the NCLT.  Further NCLTs are also required to either accept or reject any application for a pre-pack insolvency proceeding before considering a petition for a CIRP.

What are the benefits of pre-packs over the Corporate Insolvency Resolution Process (CIRP)?

One of the key criticisms of the CIRP has been the time taken for resolution.  At the end of December 2020, over 86 per cent of the 1717 ongoing insolvency resolution proceedings had crossed the 270-day threshold. One of the key reasons behind delays in the CIRPs are prolonged litigations by erstwhile promoters and potential bidders.

The pre-pack in contrast is limited to a maximum of 120 days with only 90 days available to the stakeholders to bring the resolution plan to the NCLT.

Another key difference between pre-packs and CIRP is that the existing management retains control in the case of pre-packs while a resolution professional takes control of the debtor as a representative of financial creditors in the case of CIRP. Experts note that this allows for minimal disruption of operations relative to a CIRP.

What is the key motivation behind the introduction of the pre-pack?

According to sources aware of developments, pre-packs are largely aimed at providing MSMEs with an opportunity to restructure their liabilities and start with a clean slate while still providing adequate protections so that the system is not misused by firms to avoid making payments to creditors.

“Prepacks will help corporate debtors to enter into consensual restructuring with lenders and address the entire liability side of the company,” said Rajiv Chandak, partner at Deloitte India, noting that the government should consider setting up specific benches of the NCLT to deal with pre-pack resolution plans to ensure that they are implemented in a time-bound manner.

How are creditors protected from misuse by promoters to simply reduce liabilities and retain control?

Experts noted that the pre-pack provisions introduced by the central government also provided for adequate protection to ensure the provisions were not misused by errant promoters. The pre-pack mechanism allows for a swiss challenge for any resolution plans which proved less than full recovery of dues for operational creditors. Under the swiss challenge mechanism, any third party would be permitted to submit a resolution plan for the distressed company and the original applicant would have to either match the improved resolution plan or forego the investment.

“… adopting plan evaluation process akin to Swiss Challenge, it (the pre-pack mechanism) retains competitive tension such that promoters propose plans with least impairment to rights and claims of creditors,” said Soumitra Majumdar, partner at law firm J Sagar Associates adding that the option available to creditors to require the promoters dilute their shareholding in case the resolution plan provides for impairment of claims by creditors would also be a significant deterrent against “unreasonable terms” in resolution plans.

Creditors are also permitted to seek resolution plans from any third party if they are not satisfied with the resolution plan put forth by the promoter.

What next?

The pre-pack is expected to be rolled out to all corporations over time as legal issues around the provisions are settled through case law, according to experts

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👉Auto-population of e-invoice details into GSTR-1

https://www.gst.gov.in/newsandupdates/read/460

👉Module wise new functionalities deployed on the GST Portal for taxpayers

https://www.gst.gov.in/newsandupdates/read/455

👉Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021Pdf(477 KB)

http://www.mca.gov.in/Ministry/pdf/IBCAmedOrdinanceBill_06042021.pdf

👉Corrigenda-Insolvency and Bankruptcy Code (Amendment) Ordinances, 2021Pdf(104 KB)

http://www.mca.gov.in/Ministry/pdf/CorrigendaIBCAmedOrdinances_06042021.pdf

👉Resolution of the Monetary Policy Committee (MPC) April 5-7, 2021

https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51381

👉Statement on Developmental and Regulatory Policies

https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51382

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⚫The Govt approved production linked incentive schemes for white goods and high efficiency solar photovoltaic modules with a total budgetary outlay of Rs 10,738 crore in a bid to boost domestic manufacturing.

⚫Loans sanctioned to small businesses and entrepreneurs under the Pradhan Mantri Mudra Yojana dropped to Rs 2.7 trillion in f/y 2020-21 as the Covid-19 pandemic weighed on business activity. 

⚫The RBI left interest rates unchanged and maintained an accommodative stance as the economy faces a renewed threat to growth due to the resurgence of coronavirus cases. Repo rate and the reverse repo rate remain unchanged at 4% and 3.35%.

⚫The faceless assessment mechanism has proved to be a success for the i-tax dept, with 1.06 lakh cases being disposed off so far in a glitch-free manner . A crucial aspect of the faceless scheme is a pointed questionnaire by the dept and a to the point reply by assessee.

⚫India recorded 126315 Covid-19 cases in the last 24 hours. India is now the 4th worst hit country in terms of active cases. Maharashtra reported 59907 new cases and Delhi too recorded this year's biggest single day rise of 5,506 cases.

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