Reference: Central Board of Indirect Taxes and Customs
Update:
24*7 customs clearance at designated Sea Ports and Airports
Due to the ongoing shutdown in China on account of Coronavirus outbreak, there is an apprehension on disruption in supply of raw materials/inputs to our industrial units which were dependent on these raw materials.
To handle such emergent situations, CBIC has decided to introduce 24*7 clearance at all the customs formations, so to address any congestion or delay or surge on account of the prevailing conditions or cessation thereof.
Implication:
These instructions shall remain in operation till end of May 2020 by which time the disruptions in the supply chains are expected to have settled.
Update:
Schemes for Rebate of State and Central Taxes Levies (RoSCTCL) and Additional Ad-hoc Incentive for export of garments and made-ups.
Since State and Central Levies remained unrebated in the export of garmennts and made-ups, the Ministry of Textiles notified the scheme, to rebate the incidence of various State as well as Central taxes/levies suffered on export of garments and made-ups.
DGFT has withdrawn the benefit for garment and made ups under MEIS for (falling under Chapters 61,62 and 63) w.e.f 07.03.2019, i.e the date of introduction of RoSCTL scheme with a view to compensate exporters affected under the RoSCTL scheme.
Implication:
Under the RoSCTL and Additional Ad-hoc Incentive schemes, the rebate will be granted by DGFT in the form of electronic duty credit scrips similar to scrips issued under MIES.
Update:
Exemption of duties of Central Excise against scrips issued under the 2% Additional ad hoc incentive for mobile phones.
Central Government vide amendment in its notification stated that the said scrip, against which goods when cleared are exempted from the whole of duty of excise leviable thereon under the Fourth Schedule to the said Central Excise Act, may include duty credit provided under the 2% Additional Ad Hoc Incentive in terms of paragraph 3.25 of the Foreign Trade Policy.
Update:
Exemption of duties of Central Excise against scrips
CBIC exempts the goods specified in the Fourth Schedule to the Central Excise Act, 1944. Provided that the said scrip, against which goods specified in the Fourth Schedule to the said Act when cleared are exempted from the whole of duty of excise leviable thereon under the Fourth Schedule to the said Central Excise Act, may include duty credit provided under the Additional Ad Hoc Incentive. The exemption shall be subject to the certain conditions:
- That the conditions (1) to (3) specified in paragraph 2 of the notification of Government of India, Ministry of Finance, Department of Revenue, No. 13/2020-Customs, dated 14th February, 2020 are complied and the said scrip has been registered with the Customs Authority at the port of registration specified on the said scrip.
- Holder of the scrip will present the said scrip to the said Customs Authority along with a letter or proforma invoice from the supplier or manufacturer indicating details of its jurisdictional Central Excise Officer and the description, quantity, value of the goods to be cleared and the duties leviable thereon.
- The said Customs Authority shall debit the duties leviable, but for this exemption in or on the reverse of the said scrip and shall mention the necessary details thereon, update its own records and send written advice of these actions to the said Officer.
Reference: Central Board of Direct taxes
Update:
Decision in case of Salem Sree Ramavilas Chit Company
Sree Ramavilas Chit Company (the petitioner) has challenged the impugned order passed by The Deputy Commissioner of Income Tax (the respondent) on 27.12.2019 in respect of the amount received by the petitioner post demonetization. The petitioner has prima facie demonstrated that the assessment proceeding has resulted in distorted conclusion on facts that amount collected by the petitioner during the period was huge and remained unexplained by the petitioner and therefore same was liable to be treated as unaccounted money in the hands of the petitioner under Section 69A of the Income Tax Act, 1961.
Implication:
The impugned order is set aside and the case is remitted back to the respondent to pass a fresh order within a period of sixty days from date of receipt of a copy of this order.
Update:
Some component of Salary income may be taxed twice
The Finance Bill, 2020 has proposed to amend section 17(2)(vii) of the Income-tax Act by introducing a cap on maximum contribution an employer can make towards recognized provident fund (PF), National pension scheme (NPS) and Superannuation fund (hereinafter collectively referred to as \’employee welfare schemes\’). This will lead to absurd tax-ability in the hands of an employee because as per section 17(1), the full amount of contribution made by the employer to NPS is already taxable in the hands of the employee.
Implication:
The proposed clause provides that contribution to employee welfare schemes in excess of Rs. 750,000 shall be taxed as perquisite in the hands of the employee.Employees with high salary income can escape from the tax liability only when their employer contribute the substantial amount in recognized provident fund and that too within the limit of 12% of salary.
Update:
Partners\’ remuneration / interest allowable to Firm opting for presumptive taxation u/s. 44AD
Delhi ITAT rules that interest on capital and remuneration to partners should be allowed as deduction to assessee-firm opting for presumptive taxation u/s. 44AD, where maintenance of books is not required
Update:
CBDT notifies forms to exercise option under new regime of section 115BAA and 115BAB
The Taxation Laws (Amendment) Act, 2019, introduced two new sections i.e. section 115BAA and section 115BAB. These section allows a domestic company to pay taxes at concessional rate of 22% or 15%, subject to fulfillment of certain conditions. The company opting of new taxation regime prescribed under Section 115BAA is required to exercise such option by filing a Form 10-IC. Similarly, a company opting for Section 115BAB is required to exercise such option by filing a form 10-ID.
Implication:
These forms are required to be furnished electronically either under digital signature or Electronic Verification Code (EVC).
Update:
CBDT introduces instant allotment of PAN on basis of Aadhaar
The Income-tax Department has introduced a functionality for instant allotment of PAN on basis of Aadhaar without any requirement for filling up of detailed application form. Further, a person shall not be required to pay any charges for using this facility of Aadhaar based instant PAN.
Update:
CBDT notifies the Rules to make PAN inoperative if it is not linked with Aadhaar
CBDT has notified Rule 114AAA to provide that where PAN of a person become inoperative, it shall be deemed that he has not furnished, intimated or quoted his PAN. Consequently, he shall be liable for all the consequences for not furnishing, intimating or quoting the PAN.
Implication:
The last date of linking PAN with Aadhaar is 31-03-2020.
Update:
Income tax (5th Amendment) Rules, 2020
Government has prescribed following manner of making permanent account number inoperative.
- Where a person, who has been allotted the permanent account number as on the 1st day of July, 2017 and is required to intimate his Aadhaar number under sub-section (2) of section 139AA, has failed to intimate the same on or before the 31st day of March.
- Where a person, whose permanent account number has become inoperative under sub-rule (1), is required to furnish, intimate or quote his permanent account number under the Act, it shall be deemed that he has not furnished, intimated or quoted the permanent account number and he shall be liable for all the consequences under the Act.
- Where the person referred to in sub-rule (1) has intimated his Aadhaar number under sub-section (2) of section 139AA after the 31st day of March, 2020, his permanent account number shall become operative from the date of intimation of Aadhaar number
- The Principal Director General of Income-tax or Director General of Income-tax shall specify the formats and standards along with the procedure for verifying the operational status of PAN.
Implication:
The provisions shall come into force from the date of their publication in the Official Gazette.
Update:
Income tax (4th Amendment) Rules, 2020
In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), after rule 21AD, the following rules shall be inserted, namely:-
21AE. Exercise of option under sub-section (5) of section 115BAA:
- The option to be exercised in accordance with the provisions of sub-section (5) of section 115BAA by a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall be in Form No. 10-IC.
- The option in Form No. 10-IC shall be furnished electronically either under digital signature or electronic verification code.
- The Principal Director General of Income-tax or the Director General of Income-tax, shall-
- specify the procedure for filing of Form No. 10-IC;
- specify the data structure, standards and manner of generation of electronic verification code, referred to in sub-rule (2), for verification of the person furnishing the said Form; and (iii) be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the Form so furnished.
21AF. Exercise of option under sub-section (7) of section 115BAB:
- The option to be exercised in accordance with the provisions of sub-section (7) of section 115BAB by a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall be in Form No. 10-ID.
- The option in Form No. 10-ID shall be furnished electronically either under digital signature or electronic verification code.
- The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall-
- specify the procedure for filing of Form No. 10-ID;
- specify the data structure, standards and manner of generation of electronic verification code, referred to in sub-rule (2), for verification of the person furnishing the said Form; and
- be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the Form so furnished.
Implication:
The provisions may come into force on the 1st day of April, 2020.
Reference: Reserve Bank of India
Update:
Exim Bank\’s Government of India supported Line of Credit of USD 11.13 million to the Government of the Republic of Suriname
Export-Import Bank of India (Exim Bank) entered into an agreement with the Government of the Republic of Suriname, for making available to them, Government of India supported line of Credit (LoC) of USD 11.13 million for the purpose of financing Rehabilitation and Upgradation of De Melkcentrale N.V. Milk Processing Plant in the Republic of Suriname. Under the agreement, financing of export of eligible goods and services from India would be allowed subject to their being eligible for export under the Foreign Trade Policy of the Government of India and its purchase will be agreed to be financed by the Exim Bank.
Implication:
The Agreement under the LoC is effective from January 27, 2020. Under the LoC, the terminal utilization period is 60 months after the scheduled completion date of the project.
Update:
Implementation of Section 51A of UAPA, 1967
Ministry of External Affairs (MEA) has forwarded a press release Security Council dated 18 February 2020 regarding removal of two entries to its Sanctions List, issued by the United Nations Security Council (UNSC).
- AL-MOKHTAR BEN MOHAMED BEN AL-MOKHTAR BOUCHOUCHA of Tunisian origin; and
- IMAD BEN BECHIR BEN HAMDA AL-JAMMALI of Tunisian origin
Implication:
Regulated Entities (REs) are advised to take note of the aforementioned UNSC communication and ensure meticulous compliance.
Update:
Extension of Direction issued to Mupasa Urban Co-operative Bank of Goa Ltd., Goa
RBI had issued directions to Mupasa Urban Co-Operative Bank of Goa Ltd., Goa from the close of business on February 18. The validity of the directions was extended from time to time & the last being upto November 15, 2019. Reserve Bank of India has now further extended the directions for a period of two months from from February 19, 2020 to April 18, 2020.
Implication:
The said bank will have to follow the directions issued by the RBI for further period of two months i.e., till 18.04.2020.
Update:
Implementation of Section 51A of UAPA, 1967
RBI has prescribed that Regulated Entities (REs) shall ensure that in terms of Section 51A of the Unlawful Activities (Prevention) (UAPA) Act, 1967, they do not have any account in the name of individuals/entities appearing in the lists of individuals and entities, suspected of having terrorist links, which are approved by and periodically circulated by the United Nations Security Council (UNSC).
Implication:
REs are advised to ensure meticulous compliance with the aforementioned instruction pertaining to UAPA and ensure that they do not have any account in the name of individuals/entities appearing in the list.
Update:
Cancellation of Registration
RBI has cancelled Certificate of Registration of following Two NBFCs:
- M. L. Singhi & Associates Private Limited.
- Stanchart Securities Private Limited
Implication:
The above companies shall not transact the business of a Non-Banking Financial Institution, as defined in clause (a) of Section 45-I of the RBI Act, 1934.
Update:
5 NBFCs have surrendered the Certificate of Registration granted to them by the Reserve Bank of India
- Consolidated Photo & Finvest Limited
- Kamakshi Marketing Private Limited
- Kamdhenu Enterprises Limited
- Chandan Credits Limited
- Jam Hire Purchase Private Limited
Implication:
These companies shall not transact the business of a Non-Banking Financial Institution, as defined in clause (a) of Section 45-I of the RBI Act, 1934.
Reference: Securities Exchange Board of India
Update:
Monetary Penalty on M/s. VCG & Co. and its partner Mr. Vishal Chandra Gupta
SEBI alleged that although the noticees had certified that the company had utilised Rs.6,85,00,000 to finance long term incremental working capital requirements, from the copies of loan agreements submitted, it is evident that the IPO proceeds were utilized by the company for financing the capital expenditure of its group companies by way of loans at the interest of PLR+2%, which is in the nature of financing activities and same was not forming part of the objects of the issue disclosed in the prospectus. The noticees had provided misleading and fraudulent statement even though he was in possession and aware of the aforesaid information.
Hence, SEBI imposed a monetary penalty of Rs. 15,00,000/- on the Noticees jointly and severally viz. VCG & Co. and Vishal Chandra Gupta for the violation of the provisions of section 12 A (a),(b) and (c) of the SEBI Act, 1992 and Regulations 3(a),(b),(c),(d), 4(1), 4(2)(f), 4(2)(k) and 4(2)(r) of the PFUTP Regulations.
Implication:
The Noticees shall jointly and severally remit / pay the said amount of penalty within 45 days of receipt of this order.
Update:
Monetary Penalty on Radison Properties Private Limited & 8 others
Radison Properties Private Limited & 8 others (Noticees) had traded with connected entities and had significant contribution towards positive LTP and thereby manipulated the price of the scrip by contributing to the price rise and indulged in an act which created false or misleading appearance of trading in the scrip of the company Turbotech Engineering Limited, thereby violated Regulation 3(a),(b),(c),(d) and Regulation 4(1), 4(2)(a) and (e) of SEBI (PFUTP) Regulations, 2003.
Hence, SEBI has imposed a monetary penalty of total of Rs. 59,00,000/- on all the 9 noticees.
Implication:
Noticees shall remit / pay the said amount of penalties, as mentioned in the order, within 45 days of receipt of this order.
Update:
Monetary penalty on Transchem Ltd and others
SEBI found that Transchem Ltd and others (Noticee) did not make open offer pursuant to their shareholding breaching the 25% threshold post the acquisition of shares of Transchem on January 30, 2012 and thus violated the provisions of Regulation 3(1) of SAST Regulations, 2011 that mandates that an acquirer together with persons acting in concert, shall not acquire shares or voting rights, which entitles them to exercise 25% or more than of the voting rights, unless the acquirer makes a public announcement of an open offer for acquire shares in accordance with the SAST Regulations.
Hence, SEBI imposed a penalty of Rs 4,50,000/- on the Noticees to be paid jointly and severally, under Section 15H(ii) of SEBI Act, 1992 for the violations of the provisions of Regulation 3(1) of SAST Regulations, 2011.
Implication:
The Noticees shall jointly and severally remit / pay the said amount of penalty within 45 days of receipt of this order.
Update:
Monetary penalty on Akash Ispat Private Limited
Akash Ispat Private Limited(Noticee) had executed a total of 43 such trades in 14 unique contracts which allegedly led to creation of artificial volume of total 85,29,500 units. SEBI also observed that the Noticee, by executing non genuine trades during the relevant period, registered a positive close out difference of ₹1,73,27,963/-approx. The trades entered by the Noticee were reversed on the same day within a very short span of time with same counterparty at a substantial price difference without any basis for significant change in the contract price which indicates that these trades are artificial and are non-genuine in nature.
Hence, SEBI has imposed a monetary penalty of ₹5,00,000/- upon Akash Ispat Private Limited under section 15HA of the SEBI Act.
Implication:
The Noticee shall remit / pay the said amount of penalty within 45 days of receipt of this order in either by the way of demand draft.
Update:
Settlement Order in respect of Ashok Vishwanath Hiremath (HUF), Ms. Chitra Ashok Hiremath, Ms. Supriya Ashok Hiremath and Suresh V Hiremath in the matter of Astec Life Sciences Limited
Applicants submitted a combined Settlement Application dated June 17, 2019 stating that since all belong to the promoter group, they be treated as one in view of the Hon’ble SAT observation in the matter of Gopalakrishnan Raman & Ors. Vs. SEBI
SEBI approved that the case may be settled on payment of Rs 3,17,900/- towards settlement charges.
Implication:
SEBI can take enforcement actions including commencing/reopening of the proceedings if it finds out that:
- Any representation made by the Applicants in the settlement proceedings are subsequently discovered to be untrue; or
- The Applicants breach any of the clauses/conditions of undertakings/waivers filed during the current settlement proceedings.
Update:
Penalty on HBJ Capital Services Pvt. Ltd. and its Directors for non compliance of WTM order
Whole time Member(WTM) of SEBI had passed an interim order dated June 15, 2015, in respect of HBJ Capital Services Private Limited and its Directors for violating certain provisions, namely:-
- To cease and desist from acting as an Investment Adviser and Alternative Investment Fund and to cease to solicit or undertake such activities or any other unregistered activities in the securities market directly or indirectly.
- To immediately withdraw and remove all advertisements, representations, Literatures, brochures, materials, publication, documents, websites, etc. in relation to those schemes/ activities (investment adviser and Alternative Investment Fund) or any unregistered activities in the securities market.
- Not to divert any funds raised from investors, kept in bank account(s) and/ or in the custody of HBJ Capital or its directors and HBJ Capital LLP and its designated partners. As per the SCN, it is alleged that the Noticees failed to comply with the directions issued vide WTM order dated June 15, 2015.
The notice has failed to comply with the WTM order. Hence, SEBI has imposed a penalty of Rs. 25,00,000/- on the Noticees for non-compliance of WTM order dated June 15, 2015.
Implication:
The Noticees shall jointly and severally remit / pay the said amount of penalty within 45 days of receipt of this order.
Update:
Monetary penalty on Arihant Sharecom Private Limited
Arihant Sharecom Private Limited has indulged in fraudulent and unfair trade practices. It had executed a total of 67 such trades in 19 unique contracts which allegedly led to creation of artificial volume of total 58,66,000 units. It is further observed that the Noticee, by executing non genuine trades during the relevant period, registered a positive close out difference of ₹2,30,92,225/- approx.
Hence, SEBI imposed a monetary penalty of ₹5,00,000/- upon Noticee viz. Arihant Sharecom Private Limited for trading in fraudulent manner.
Implication:
The Noticee shall remit / pay the said amount of penalty within 45 days of receipt of this order.
Update:
Monetary penalty on Redmond Investments Limited
Redmond Investments Limited failed to make disclosures to BSE and YDL under regulation 13(4A) within two working days and therefore, violated regulation 13(4A) r/w regulation 13(5) of SEBI (PIT) Regulations, 1992 and has failed to make required disclosures under section 15A(b) of SEBI Act, 1992.
Hence, SEBI has imposed a penalty of Rs 9,00,000/- upon the Noticee, i.e. Redmond Investments Limited for violation of regulations 13(4A) r/w 13(5) of PIT Regulations, 1992.
Implication:
The Noticee shall remit / pay the said amount of penalty within 45 days of receipt of this order.
Update:
SEBI constitutes ‘Municipal Bonds Development Committee’
SEBI has constituted a Municipal Bonds Development Committee, comprising of representatives from ministry, municipal corporation, lawyers, professionals and market practitioners as members. The terms of reference of the committee would be as under:
- To advise SEBI on issues related to regulation and development of primary and secondary market of municipal debt securities.
- To advise SEBI on matters required to be taken up for changes in legal framework to introduce simplification and transparency in systems and procedures in the primary and secondary market.
- To advise SEBI on matters relating to regulation of intermediaries for ensuring investor protection in the primary and secondary market.
- To recommend SEBI on measures to facilitate issuers (i.e. municipalities) for issuance of municipal debt securities.
Reference: Insurance Regulatory and Development Authority of India
Update:
National Strategy for Financial Inclusions – 2019-2024
National Strategy for Financial Inclusion for India 2019-2024, prepared by RBI under the aegis of the Financial Inclusion Advisory Committee is based on the inputs and suggestions from Government of India, other Financial Sector Regulators viz., Securities Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority of India (PFRDA).
It reflects various outcomes from wide-ranging consultation held with a range of stakeholders and market players. It also includes an analysis of the status and constraints in financial inclusion in India, specific financial inclusion goals, strategy to reach the goals and the mechanism to measure progress.
Reference: Ministry of Corporate Affairs
Update:
Companies (Registration Offices and Fees) Amendment Rules, 2020
MCA has notified the Companies (Registration Offices and Fees) Amendment Rules, 2020. Under the said rule MCA has given a substitute for form No.GNL-2.
Implication:
These rules shall come into force on the date of their publication in the Official Gazette.
Update:
Filing of forms in the Registry by the Insolvency Professional or Resolution Professional or Liquidator appointed under Insolvency Bankruptcy Code, 2016
MCA has clarified that the following procedures shall be followed in respect of cases wherein filing of forms in the registry of IP/RP/Liquidator has been appointed under IBC, 2016:-
- The IRP/ RP/ Liquidator would have to first file the NCLT order approving him as the IRP/RP/Liquidator in form INC-28.
- Jurisdictional ROC, shall thereafter examine and approve the INC-28 form so filed if the same is found to be in order. If the filed Form is not in order, he shall mark the form as under Re-submission / Rejected category.
- The Master Data for the company shall, after the approval of Form No.INC28 clearly display that the said company is under CIRp or Liquidation.
MCA also clarified that in case the order of admission of a company (corporate Debtor) into cIRP or into liquidation is stayed or set aside by the Tribunal or Appellate Tribunal or other courts, such order shall be filed in Form INC-28 by the concerned IP, and the status of the company and the authorization for filing of forms on behalf of company would then change accordingly.
Implication:
Unless INC-28 e-form is approved, no other forms would be enabled for filine by the IRP/RP/Liquidator in his role of designated CEO. The IRP/RP/Liquidator in his role as designated CEO shall again file e-form INC-28 upon the approval of the resolution plan, initiation of liquidation proceedings or upon withdrawal of the application for CIRp based.
Update:
Nidhi (Second Amendment) Rules, 2020
MCA has vide Nidhi (Second Amendment) Rule 2020 extended the timeline for compliance to be followed by Every company referred to in clause (b) of rule 2 and every Nidhi incorporated under the Act, before the commencement of Nidhi (Amendment) Rules, 2019. As per the said amendment above referred company shall get itself declared as such in accordance with rule 3,4 within a period of one year from the date of its incorporation or within a period of nine months from the date of commencement of Nidhi (Amendment) Rules, 2019, whichever is later.
Implication:
Above referred companies will have more time to comply with the said rule.
Reference: Institute of Chartered Accountants of India
Update:
ICAI’s decision regarding cut-off date for con-donation of cases for the year 2020-21
The Council has decided to extend the due date of submission of all forms up to 29th February, 2020 and waive all con-donation fees for a further period of 29 days up i.e to 29th February, 2020 as one time measure.
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