GST Gyan - Small Traders, Manufacturers and restaurants may opt for availing the composition scheme till 30th September, 2017 having turnover upto Rs. 75 lakh taxing at 1, 2 & 5 %. First such return, for quarter July-September, 2017 has to be filed by 18th October, 2017. FORM GSTR-4A is not to filed for this quarter.
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Quick Reference to "Loan and Investment by the Company" :-
Legal Provision:-
Section 186 of Companies Act, 2013.
Points:-
1. It deals with loan given to any person , body corporate, Giving of guarantee in related with loan. Acquisition (Purchase) of Securities of Body Corporate.
2. Limits:-
Upto 60% of its paid up capital + Free reserves+ Securities Premium Account.
OR
Upto 100% of its free reserves + Securities Premium Account.
👆Unanimous Board resolution in the Board meeting is required. Circular resolution is not allowed.
3. The Special Resolution in the General meeting is required if It Crosses the above mentioned limit. ( Exempted for Govt . companies engaged in defence production)
4. Disclosure should be made in financial statements (Section 186(4) of Companies Act, 2013).
5. Approval of financial institution is not required if it's upto the limit ( Already mentioned Above).
6. Separate Register should be maintained in Form MBP-2.
7. Non-Apllicability:-
# Banking Company
#NBFC
#Insurance Company
#Husing Finance Company
#Ordinary Business of Company as acquisition of Securities.
#Sale on Credit.
#Normal Trade Advances given to Suppliers.
#Investment in mutual fund ( Except UTI )
# Loan to Directors.
8. Punishment for Contravention:-
For Company:-
Min. ₹ 25 k Max ₹5 lakh.
For Officer in default :-
Imprisonment maximum Term of 2 years or fine of Min. ₹25 k Max. ₹ 1 lakh or both.
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Maharashtra Govt Takes Strict Penal Actions against Persons including Composition Dealers for Not Displaying GSTIN in Sign Boards
Read more at: http://www.taxscan.in/maharashtra-govt-takes-strict-penal-actions-persons-including-composition-dealers-not-displaying-gstin-sign-boards/11380/
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Govt Amends Customs Valuation Rules, 2007 [Read Notification]
Read more at: http://www.taxscan.in/govt-amends-customs-valuation-rules-2007-read-notification/11387/
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CBEC issues circular following Amendment to Customs Valuation Rules [Read Circular]
Read more at: http://www.taxscan.in/cbec-issues-circular-following-amendment-customs-valuation-rules/11394/
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GST updates on the new services made available on portal and defect fixed*
1) REG_011 : Application for Amendment of Registration - Core Fields, deployed in portal
2) REG_012 : Processing of Amendment Application, deployed in portal for tax officials
3) REG_19 : Suomoto Registration along with payment option, deployed in portal
4) GSTR 3B issue
If the user enters multiple decimal values in Section 3.2 and section 3.1a IGST is equal to section 3.2, save GSTR3B is showing business validation error. In browser java script when the decimal values are getting summed up, more than 2 digits are getting added which is causing this validation issue, so same has been rounded off to 2 digits.
Bug fixed and Change completed successfully
5) EVC Filing Issue in Transition form 1
Change completed successfully
6) Transfer of Charge –BO System Error thrown while trying to transfer the charge. Fix is done in order to avoid this issue.
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CBEC issues circular following Amendment to Customs Valuation Rules [Read Circular]
Read more at: http://www.taxscan.in/cbec-issues-circular-following-amendment-customs-valuation-rules/11394/
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🍊 *GST CORE FIELD AMENDMENT STARTED.* 🍎
🥕 1) Business Detail
🥕 2) Place of Business
🥕 3) Additional Place of Business
🥕 4) Promoters/Partners detail
🍍
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RBI
RBI has notified the amendments to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 As per the existing norms, the limit for investment by Foreign Portfolio Investors (FPIs) in corporate bonds is ₹ 244,323 crore which includes issuance of Rupee denominated bonds overseas (Masala Bonds) by resident entities of ₹ 44,001 crore (including pipeline). The Masala Bonds are presently reckoned both under Combined Corporate Debt Limit (CCDL) for FPI and External Commercial Borrowings (ECBs). On a review, and to further harmonise norms for Masala Bonds issuance with the ECB guidelines, with effect from October 3, 2017, Masala bonds will no longer form apart of the limit for FPI investments in corporate bonds. They will form a part of the ECBs and will be monitored accordingly. The amount of ₹ 44,001 crore arising from shifting of Masala bonds will be released for FPI investment in corporate bonds over the next two quarters as prescribed in the circular. All other existing conditions for investment by FPIs in the debt market remain unchanged.
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CBEC
The Central Government has notified the Customs and Central Excise Duties Drawback Rules, 2017 to replace the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 which shall be effective from 1.10.2017. The Central Government has also revised All Industry Rates (AIRs) of Drawback which shall also comes into force on 1.10.2017. In the revised Rules, definition of Drawback has been amended to provide for drawback of Customs and Central Excise duties excluding integrated tax leviable under sub-section (7) and compensation cess livable under sub-section (9) respectively of section 3 of the Customs Tariff Act, 1975 chargeable on any imported materials or excisable materials used in the manufacture of goods exported. Further, references to input services and Service Tax have been omitted. With trade facilitation in view, tenure of the Drawback Committee constituted by the Central Government has been extended to 31.12.2017 to expeditiously look into issues arising from the changes made. Accordingly, exporters may immediately come forward with representations with supporting data and documents, if any, for higher rates than rates provided.
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Ministry of Labour & Employment
The Ministry of Labour & Employment has launched the Platform for Effective Enforcement for No Child Labour (PENCIL) Portal at the National Conference on Child Labour organised by the Ministry of Labour and Employment, Government of India. The PENCIL is an electronic platform that aims at involving Centre, State, District, Governments, civil society and the general public in achieving the target of child labour free society. Ministry has also launched the Standing Operating Procedures (SOPs) for the enforcement of legal framework against child labour. The SOP is aimed at creating a ready reckoner for trainers, practitioners and monitoring agencies to ensure complete prohibition of child labour and protection of adolescents from hazardous labour ultimately leading to Child Labour Free India. The PENCIL Portal (pencil.gov.in) has various components, namely Child Tracking System, Complaint Corner, State Government, National Child Labour Project and Convergence. The Districts will nominate District Nodal Officers (DNOs) who will receive the complaints and within 48 hours of receiving, they will check the genuineness of the complaint and take the rescue measures in coordination with police, if the complaint is found to be genuine.
CBEC
CBEC has notified the amendments to the Customs Valuation (Determination of Value of Imported Goods) Rules 2007, which may be called the Customs Valuation (Determination of Value of Imported Goods) Amendment Rules, 2017 and shall come into force on the date of their publication in the Official Gazette. These rules lays that “place of importation” means the customs station, where the goods are brought for being cleared for home consumption or for being removed for deposit in a warehouse;” and “The value of the imported goods shall include the cost of transport, loading, unloading and handling charges associated with the delivery of the imported goods to the place of importation and the cost of insurance to the place of importation”. Further, where the cost of insurance is not ascertainable, such cost shall be 1.125% of free on board value of the goods. It is also clarified that if the goods imported by sea or air and transshipped to another customs station in India, the cost of insurance, transport, loading, unloading, handling charges associated with such transshipment shall be excluded.
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MCA invites Public Comments on Procedure for starting a Business in India
Read more at: http://www.taxscan.in/mca-invites-public-comments-procedure-starting-business-india/11402/
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No TDS on Passenger Service Fee: ITAT follows CBDT Circular [Read Order]
Read more at: http://www.taxscan.in/no-tds-passenger-service-fee-itat-follows-cbdt-circular/11366/
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# *GST* Collections for the m/o Aug’ 2017 marginally dropped to Rs.90,669 Crore (37.63 Lakh GSTR-3B filed) Vs. Rs.94,063 Crore for Jul’ 2017.
# *GST*: The government said only Rs.12,000 Crore of the Rs.65,000 Crores of input tax credit claimed by assesses for the pre-GST stocks were valid.
# *CBEC*: The Central Government has notified the Customs and Central Excise Duties Drawback Rules, 2017 to replace the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 which shall be effective from 1.10.2017.
# *CBEC* has notified the amendments to the Customs Valuation (Determination of Value of Imported Goods) Rules 2007, which may be called the Customs Valuation (Determination of Value of Imported Goods) Amendment Rules, 2017.
# *MoL&E*: The Ministry of Labour & Employment has launched the Platform for Effective Enforcement for No Child Labour (PENCIL) Portal at the National Conference on Child Labour organised by the Ministry of Labour and Employment, Government of India.
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DISQUALIFICATION OF DIRECTOR
Introduction:
As MCA has struck off the approx 209,000 Companies from its record because of “Non Filing of its financial statement for 3 years or more” as per provisiosn of Section 164(2) and issued the list of approx 100,000 Director who has been disqualified under 164(2). Both the lists are available on the website of the MCA.
Major impact of disqualification of Director is:
If a Person is director in more than 1 Company example in 4 (A,B,C,D) Companies. One of such Companies (Company A) made default u/s 164(2). The name of Company may or may not be struck off from the Register of the ROC. But such director is become disqualified.
In such case if that disqualified director filing any form in other Company (i.e. B, C, D) then a error is occurring that “the person associated with the DIN is disqualified and not allowed to file the form”
Therefore, by this practical problem one can opine that intention of the Ministry is that once as director is disqualified u/s 164(2)(a) he have to vacant the office from all the Companies in which he is acting as director as a vacation u/s 167(1).
One Quick Issue:
If a Company has not filed Annual Return or Financial statement for more than 3 years and the Status of Company Still Active. Whether Director of such company shall be disqualified to continue their appointment in another Companies or filing of forms of other Companies?
Solution:
First of all Status of Company is not a decisive factor to identify the disqualification or non disqualification of Director. Even if a Company is active, Directors of the Company may be disqualified.
Because as per provisions of Section 164(2) “A person who is or has been a director of a company which has not filed financial statements or annual returns for any continuous period of three financial years shall not be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years”
Therefore, principle of qualification or disqualification of status of Director is non filing of financial statement. Hence, one can opine that Yes, Even the Company status of Company is still active in the records of ROC but Company not filed the financial statements and annual returns from last 3 years then the status of director shall be “DISQUALIFIED”
After reading of above mentioned question and provisiosn of Section 164(2) many questions come into the mind of the person like:
i. What are the compliances required to be done by a Company in case of its fails to file the FS or AR for 3 financial years.
ii. Who shall be responsible for such non Compliances?
· If there is Company Secretary in such Company, whether he will be responsible for such non-compliance.
· If Auditor has not mentioned in its auditor report whether he shall be responsible for such non compliance.
· What are the penalties on the Directors of the Company
iii. How to appoint new Director in such Company for completion of the pending compliances.
iv. Whether any way out of removal of disqualification of Director, if yes, which statutory authority has such power.
v. If a Company has not filed the financial statement for an example from last 5 financial years. However, the Company has file many other forms, pass resolutions, conducted business etc. Whether work done by director shall be considered valid or void?
vi.
What are the compliances required to be done by a Company in case of its fails to file the FS or AR for 3 financial years.
Legal Background:
As per Section 164(2) read with Rule 14 of the Companies (Appointment and Qualification of Directors) Rules, 2014, in case of Company fails to file Financial Statement and Annual Return for continue period of 3 year then following are the Compliance requirements for the Company:
Rule 14(2) whenever a company fails to file the financial statements or annual returns, as specified in sub-section (2) of section 164, the company shall immediately file Form DIR-9, to the Registrar furnishing therein the names and addresses of all the directors of the company during the relevant financial years.
Rule 14(4) upon receipt of the Form DIR-9 under sub-rule (2), the Registrar shall immediately register the document and place it in the document file for public inspection.
Outcome:
Hence, after reading the above mentioned Rule one can opine that it is duty of Company to file e-form DIR-9 with the ROC in case of Company fall u/s 164(2). In DIR-9 company have to mention the name of the Directors who was directors of the Company during such period.
The purpose of this form is to inform the ROC by the Company about the Disqualified Directors so that ROC can debar them from appointment in another Companies or Incorporation of new Companies.
Therefore, all the Companies which have not filed such form DIR – 9 with ROC shall be liable for non compliance of Rule 14.
Who shall be responsible for such non Compliances under Rule 14 ?
Legal Background:
Rule 14(2) When a company fails to file the FormDIR-9 within a period of thirty days of the failure that would attract the disqualification under sub-section (2) of section 164, officers of the company specified in clause (60) of section 2 of the Act shall be the officers in default.
Officer in default: means any of the following officers of a company, namely:—
(i) whole-time director;
(ii) key managerial personnel;
(iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified
(iv) (v) (vi) (vii)…..
Question:
If there is Company Secretary in Such Company whether he will be responsible for such non-compliance.
As per provisions of Section 2(51) of Companies Act, 2013 “Company Secretary” is covered under definition of Key Managerial Personnel and KMP is included in the definition of Officer in Default.
Outcome:
Hence, one can opine that if the Company fails to file DIR-9 with ROC within 30 days of occurrence of Disqualification of Director then Company Secretary shall be officer in Default shall be liable for the penalty u/s 172.
Even the same penalty applicable on the Directors of the Company.
Penalty u/s 172: If a company contravenes any of the provisions of this Chapter and for which no specific punishment is provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.
One more question comes to mind here:
In case a person (Mr. A) director in 4 Companies. Out of 4 Companies 1 Company having KMP (like: CEO/CFO/CS).
Out of 4 Companies 1 Company fails to file its financial statement or annual return for continue period of 3 years. In such situation Mr. A become disqualify u/s 164(2) and have to vacant office immediately u/s 167(1) (a).
But Mr. A continued as director in another 3 Companies. Another 3 Companies continue show him as director of the Company even he was disqualified u/s 164(2) and vacant u/s 164(1).
Whether there will be any penalty on the Directors, Company Secretary, KMP, Practicing Company Secretary who has certified the form of these Companies?
If Auditor has not mentioned in its auditor report whether he shall be responsible for such non compliance.
Legal Background:
Pursuant to provisiosn of Section 143(3) the auditor’s report shall also state— whether any director is disqualified from being appointed as a director under sub-section (2) of section 164.
In the above mentioned example if the Auditor of another 3 Companies has not mentioned in their Auditor Report that directors are disqualified to appoint as director u/s 164(2) and have to vacant office u/s 167(1). Whether auditor shall be punishable under Companies Act, 2013?
Outcome:
Even in the above mentioned example, if the auditor of above 3 companies has not mentioned in their Auditor Reports that the directors are not disqualified it is non compliance on the part of Auditors u/s 143(3) and they are liable for penalty under Companies Act, 2013.
Penalty:
If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues.
How to appoint new Director in such Company for completion of the pending compliances.
In some cases due to disqualification of all the Directors of the Company now it is not possible for such Companies to pass the Board Resolution or to file the form DIR- 12 with ROC for appointment of new Director. Therefore, a question arise in mind
· How to appoint the new Director for compliances of the Company.
· How to file the form for appointment of new Director.
Legal Background:
Pursuant to provisiosn of section 167(3): Where all the directors of a company vacate their offices under any of the disqualifications specified in sub-section (1), the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in the general meeting.
Outcome:
As due to disqualifications of the entire directors, there is NIL Directors on the Board and the Company. The promoters of the Company can appoint any other person as Director of the Company that person shall hold the office till the next General Meeting of the Company. Hence one question is clear that Promoter can appoint the Director.
However, how to file the form / update in the record of the ROC name of the person appointed by promoters. At the same time as all the directors are disqualified so company can’t use their DSC.
In such Situation company can file the physical copy of application along with details of the person appointed by promoter to act as director of the Company. The ROC officials shall verify the application and if they are satisfied they will update the name of such person in their record as Director of the Company.
Hence, This remedy is in addition to any other remedies available to the members of such a company by applying to the Tribunal (currently CLB) for an order convening a general meeting of the company under section 98 of the Act.
Conclusion:
After reading of the provisiosn of Companies Act, 2013 it is clear that disqualified Director not able to continue as director in other Companies also, due to section 167(1) his office shall be vacant from all the Companies. In case of failure of information of such disqualification to ROC by the officer of the Company they are punishable for non compliance under the Act.
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Collections under the GST dropped marginally to Rs 90,669 crore for August from the revised figure of Rs 94,063 crore for July.
The Central Government has notified the Customs and Central Excise Duties Drawback Rules, 2017 to replace the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 which shall be effective from 1.10.2017.
Banks have started the process of scanning account details of directors disqualified by the MCA to analyze their links with shell companies and check whether they diverted funds.
SEBI allowed Stock brokers to submit monthly data on their clients’ funds to the exchanges within three trading days after the month-end. Currently, brokers need to submit this data by the next trading day.
Prime Minister constituted a five member Economic Advisory Council (EAC) headed by Niti Aayog member Bibek Debroy, at a time when concerns are being raised over the declining growth in India.
RBI has notified the amendments to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 as per the existing norms.
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Quick Reference to "Compounding of Offence under Companies Act, 2013" :-
Legal Provision:- Section 441 of Companies Act, 2013.
Points:-
1. Basically, Compounding of Offence means Amicable settlement of Dispute.
2. It is applicable for Offence punishable with fine only,
3. An offense punishable with imprisonment only or imprisonment and fine is not compoundable.
4. Jurisdiction:-
# Amount of fine more than ₹ 5 lakh ;- NCLT
# Amount of fine upto ₹ 5 lakh ;- Regional Director.
5. Compounding is not allowed if investigation with company is already going on.
6. Same offence is not Compoundable within a period of 3 years.
7. Compounding order should be filed with ROC in form INC-28.
8. No prosecution is instituted if offence is compounded.
9. An offence punishable with imprisonment or fine, imprisonment or fine or both shall be Compoundable with the permission of Special Court.
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: Delhi HC distinguishes Setting Aside of Assessment & Assessment Order for Time limit u/s 153(2A): Nokia Gets Relief [Read Order]
Read more at: http://www.taxscan.in/delhi-hc-distinguishes-setting-aside-assessment-assessment-order-time-limit-us-1532a-nokia-gets-relief/11348/
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Finance Ministry unveils GST Revenue Figures till 25th Sept, 2017
Read more at: http://www.taxscan.in/finance-ministry-unveils-gst-revenue-figures-till-25th-sept-2017/11364/
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*Service Tax:*
1. *Financial advisory services* provided by CRISIL does not fall under category of 'Management Consultancy Services' and is rightly classified under 'Banking and other Financial Services'.
*2017-TIOL-1993-HC-MUM-ST*
2. *Installation of plant-* The appellants are engaged in the activity of installation of plant (greenhouse), the Greenhouse is building and, therefore, would fall under definition of plant - activity is liable to service tax.
*2017-TIOL-3479-CESTAT-MUM*
3. *Room rent* charged by hotels for short-term stay cannot be levied with service tax under category of Mandap Keeper Services.
*2017-TIOL-3488-CESTAT-MUM*
*Central Excise:*
4. *Notfn. 11/2002-CE(NT)* requires submission of Bill of Lading or Shipping bill or export proof duly certified by Customs officer - such documents are only available in case of actual export and not deemed export.
*2017-TIOL-3484-CESTAT-MUM*
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📺 *Updates*
➡1. Interest earned on corpus donation forming part of corpus was eligible for sec. 11 exemption.
Commissioner of Income-tax, (Exemption) v. Mata Amrithanandamayi Math*
➡2. Squaring up debtor by debiting bad debts reserve a/c amounted to actual write-off of debt: HC
Principal Commissioner of Income-tax v. Gujarat State Co-OP Bank Ltd.
➡3. All legal services provided by advocates are covered under reverse charge
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Quick Reference to " Small Company" :-
Legal Provision:-
Section 2(85) of Companies Act, 2013.
Points:-
1. Small company is basically a private company with some unique features.
2. Max. Paid up capital ₹ 50 lakh and Max Turnover ₹ 2 crore.
3. Small company should be other than public company.
4. Provision of Small Company is not Applicable to Holding, Subsidiary, Section 8 company, company or body corporate by special act.
5. The annual return of Small Company shall be signed by the Company Secretary and if there is no Company Secretary then by the director of the Company.
6. The merger and amalgamation procedure is simple for two or more small Companies.
7. Small Company is different from One Person Company.
🙏Thank you🙏
Have a nice day
