Reference: Central Board of Indirect Taxes and Customs
Update:
Amendments to the rate of GST on supply of lottery
CBIC makes the following amendments in the notification No.1/2017-Central Tax (Rate), namely:-
In the said notification-
- In schedule II- 6%, S.No. 242 and the entries relating to it shall be omitted.
- In schedule IV-14%, for S.No. 228 and the entries relating to it shall be substituted with the word \”Lottery\”.
Similarly, in the notification No.1/2017- Integrated Tax (Rate), CBIC has made amendments in schedule II- 12% and Schedule IV-28% and in the notification No.1/2017- Union Territory Tax (Rate) in Schedule II- 6% and in Schedule IV- 14%.
Implication:
This notification shall come into force on the 1st day of March, 2020.
Update:
Transportation of Goods (Through Foreign Territory), Regulations, 2020.
CBIC makes regulations in the supersession of the Transportation of Goods (Through Foreign Territory) Regulations, 1965. These regulations shall apply to the movement of goods under the ACMP and under the PIWTT.
As per the regulation for the movement of the goods under these regulations, the consignor of the goods or the carrier of the goods or their authorised agent shall, at the customs station of exit in India,
- File a Customs Transit Declaration, –
- in Annexure ‘A’, for movements under clause (i) of regulation 2;
- in Annexure ‘B’ for movements under clauses (ii) and (iii) of regulation 2; and
- Execute a bond, for the value of the goods, to ensure safe transportation of the goods up to the destination declared in the Customs Transit Declaration, as per Annexure.
Upon the compliance of above Regulation, by the consigner of the goods or the carrier of the goods or their authorized agent, the proper officer shall approve the Customs Transit Declaration.
Implication:
These regulations shall come into force on the day of their publication in the official gazette.
Update:
Standard Operating Procedure (SOP) to be followed by exporters
The Board has taken measures to apply stringent risk parameters-based checks driven by rigorous data analytics and Artificial Intelligence tools based on which certain exporters are taken up for further verification. While the verification are caused to mitigate risk, it is necessary that genuine exporters do not face any hardship. CBIC has advised that exporters whose scrolls have been kept in abeyance for verification would be informed at the earliest possible either by the jurisdictional CGST or by Customs.
Implication:
The Jurisdictional Pr. Chief Commissioner/Chief Commissioner of Central Tax should take appropriate action to get the verification completed within next 7 working days.
Update:
Tariff Notification in respect of Fixation of Tariff Value
CBIC has notified the Government of India in the Ministry of Finance (Department of Revenue) about fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy seeds, Areca Nut, Gold and Silver as prescribed in notification.
Update:
Assessee not liable to pay interest where IGST wrongly paid inadvertently as CGST
Shree Nanak Ferro Alloys (P.) Ltd. (Assessee) contended that the amount demanded by authorities was not short paid, but merely classified under a different head and that correct information was shown while filing GSTR 1 and the mistake had only occurred while filing of GSTR 3B in the early phase of implementation of GST. The court was of the view that the assessee had neither concealed any transaction nor committed any fraud.
Hence, court held that the assessee was not liable to pay the interest where the tax amount was inadvertently paid under the head CGST instead of IGST.
Reference: Central Board of Direct taxes
Update:
Condonation of delay in filing Return of Income
The Board has issued Circulars authorizing the Commissioners of Income Tax to admit belated applications of Form 9A and Fonn 10 and to decide on merit the condonation of delay U/S 11 9(2)(b) of the Income-tax Act.
CBDT has decided that where the application for condonation of delay in filing Form 9A and Form 10 has been filed and the Return of Income has been filed on or before 31st March of the respective assessment years i.e. Assessment Years 2016-17, 2017-18 and 2018-19, the Commissioners of Income-tax (Exemptions) are authorized to admit such belated applications for condonation of delay in filing Return of Income and decide on merit.
Update:
No reassessment based on Supreme Court ruling that reversed legal position prevailing at time of regular assessment
The petitioner challenged that the reassessment notices were issued after expiry of four years from the end of the relevant assessment year. Assessing Officer (AO) could not establish that the information of alleged escaped income was not within his knowledge and was not considered at the time of passing of the assessment order under section 143(3) of the Income-tax Act, 1961.
Thus, it couldn’t be said that there was an omission or failure on the part of the assessee in disclosing fully and truly the material facts necessary for relevant assessment and reassessment notices were liable to be quashed.
Update:
Provision made for leave encashment on actuarial basis not to be added back while computing book profit under MAT
AO added the provision for leave encashment to the net profit of the assesse. Assessee claimed that provision for leave encashment was not for an ascertained liabiity, therefore, same was not liable to be added while computing book profits. Since this contention was rejected, on further appeal, Mumbai ITAT held that if a business liability had definitely arisen in the accounting year, the deduction should be allowed, although the liability may have to be quantified and discharged at a future date.
Reference: Reserve Bank of India
Update:
RBI Working Paper- Nowcasting Indian GDP growth using a Dynamic Factor Model
RBI placed on its website a Working Paper titled \”Nowcasting Indian GDP growth using a Dynamic Factor Model\” under RBI Working Paper Series. This paper constructs single-index dynamic factors using a sequentially expanding list of 6,9 and 12 high-frequency activity indicators.
Update:
Short Term Crop Loans eligible for Interest Subvention Scheme (ISS) and Prompt Repayment Incentive (PRI) through KCC
Banks are advised to ensure that all Short Term Crop Loans eligible for Interest Subvention (IS) and Prompt Repayment Incentive (PRI) benefit are extended through KCC w.e.f. April 1, 2020 and the existing Short Term Crop Loans which are not extended through KCC shall be converted to KCC loans by March 31, 2020.
Implication:
Reimbursement of interest subvention for Short Term Crop Loans through non-KCC accounts shall not be considered beyond March 31, 2020.
Update:
Investment in Certificates of Deposit (CDs) – Reporting in Form ‘A’ Return
RBI has advised banks to follow a certain practice while reporting their transactions in CD\’s in Form \’A\’ Return that when the CD\’s are issued by banks on reporting Friday, the issuer bank should report such CD\’s under item I of the Form \’A\’ Return i.e., \”Liabilities to the Banking system in India\” and the CD\’s held by non-bank entities should be reported as \”Liabilities to Others in India\”. The reporting of the CD\’s should be done as per the issue price of the CD\’s.
Implication:
Reimbursement of interest subvention for Short Term Crop Loans through non-KCC accounts shall not be considered beyond March 31, 2020.
Update:
External Benchmark Based Lending – Medium Enterprises
To strengthen monetary policy transmission, RBI has now decided that all new floating rate loans to the Medium Enterprises extended by banks from April 1, 2020 shall be linked to the external benchmarks as indicated in prescribed circular.
Update:
Implementation of Section 51A of UAPA, 1967 – Addition of two entities to 1267 List
Ministry of External Affairs (MEA) has forwarded a notification regarding addition of two entities in UNSC’s 1267/1989 ISIL (Da\’esh) & Al-Qaida Sanctions List, namely:-
- Islamic State West Africa Province (ISWAP)
- Islamic State in the Western Sahara (ISGS)
Implication:
Regulated Entities (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 lists of individuals and entities, suspected of having terrorist links.
Update:
March 2020 Round of Inflation Expectations Survey of Households
RBI has been regularly conducting Inflation Expectations Survey of Households (IESH) which aims at capturing subjective assessments on price movements and inflation. The results of the survey provide useful information for monetary policy formation. M/s Hansa Research Group Pvt. Ltd., Mumbai has been engaged to conduct the field work of this round of the survey on behalf of the RBI. For this purpose, the households will be approached by the agency and the selected households are requested to provide their response.
Implication:
Individuals who are not approached by the agency can participate in this survey by providing their responses using the linked survey schedule.
Update:
March 2020 Round of Consumer Confidence Survey
RBI has been conducting Consumer Confidence Survey which seeks qualitative responses from households, regarding their sentiments on general economic situation, employment scenario, price level, household\’s income and spending. M/s Hansa Research Group Pvt. Ltd., Mumbai has been engaged to conduct the field work of this round of the survey on behalf of the RBI. For this purpose, the households will be approached by the agency and the selected households are requested to provide their response.
Implication:
Individuals who are not approached by the agency can participate in this survey by providing their responses using the linked survey schedule.
Reference: Securities Exchange Board of India
Update:
Monetary penalty on Gitanjali Gems Limited
In view of fraudulent activity by the Gitanjali Gems Limited, Mr. Mehul Choksi and Mr. Dhanesh Sheth (Noticees), following are the allegations on the Noticees, namely:-
- The Noticee No. 1 has not made disclosures within 24 hours of occurrence of the following events:
a. Withdrawal of credit limits by PNB in view of the alleged fraud by the Noticee No. 1 and its subsidiaries.
b. Sudden obligation to repay an significant amount of ₹1045.88 Crores within 10 days.
c. Subsequent development in the matter. - The Noticee No. 1 has not made disclosures on various litigations and actions by enforcement agencies against Noticee No. 1, its Managing Director and other senior managerial personnel to the stock exchanges as well as not replied on various clarification sought by the stock exchanges till date.
- No disclosures has been made by the Noticee No. 1 on various litigation to stock exchanges during the years 2012-2017.
- No disclosure has been made by the Noticee No. 1 on resignation of Key Managerial Persons (Company Secretary and Chief Finance Officer) and Director to the stock exchanges.
- The Noticee No. 1 has not made disclosures with respect to delay in payment of interest and principal amount for a period of more than three months from the due date and default in payment of interest and principal to LIC on NCDs.
Hereby violating Regulation 30(1), 30(2), 30(3), 30(5), 30(6), 30(7), 30(10), 30(12) read with Clauses (6), (5), (8) and (7) of the LODR Regulations and Regulation 4(2)(f)(i)(2), 4(2)(f)(ii)(8), 4(2)(f)(iii)(3), 4(2)(f)(iii)(6) of LODR Regulations.
Hence, SEBI has imposed a monetary penalty of Rs. 5,00,00,000/- under section 23E of the SCRA.
Implication:
The Noticees shall remit / pay the said amount of penalty within 45 days of receipt of this order.
Update:
Monetary penalty on M/s Helios and Matheson Information Technology Ltd
CRISIL, a credit Rating Agency, in its Press Report dated October 17, 2014 downgraded the ratings of the M/s Helios and Matheson Information Technology Ltd (Noticee/Company) on the following parameters:
- Fundamental grade of the company from 3/5 to 2/5 as a result of deteriorating liquidity.
- Valuation grade of the company from 4/5 to 1/5 indicating that the current market price has strong downside.
The Noticee neither disclosed the revised ratings of CRISIL to the stock exchanges nor disseminated the revised ratings through its website and also failed to disclose to the stock exchanges, the winding up petitions lodged by the depositors againts the Noticee before the Hon\’ble High Court of Madras hereby violating Section 23A(a) and 23E of SCRA.
Hence, SEBI has imposed a monetary penalty on the Noticee, i.e. M/s Helios and Matheson Information Technology Ltd, of Rs. 65,00,000/-.
Implication:
The Noticee shall remit/pay the said amount of penalty within 45 days of receipt of this order.
Update:
Monetary penalty on Umang Nemani
Umang Nemani (Noticee) was one of the entities who had indulged in creating artificial volume of 21,85,44,000 units through 830 non-genuine trades in 204 stock option contracts. It was alleged that the Noticee has entered into reversal trades in BSE ISO and these reversal trades were non-genuine in nature and have created false and misleading appearance of trading in terms of artificial volume in Stock Options and therefore alleged to be manipulative, deceptive in nature. The Noticee was alleged to have violated Regulations 3(a), (b), (c) and (d), 4(1), 4(2)(a) of SEBI (PFUTP Regulations).
Hence, SEBI has imposed a monetary penalty of Rs. 25,00,000/- on the Noticee for indulging in execution of reversal trades in Stock Options with same entity on the same day, thereby creating artificial volume, leading to false and misleading appearance of trading in the illiquid stock options at BSE.
Implication:
The Noticee shall remit/pay the said amount of penalty within 45 days of receipt of this order.
Update:
Monetary Penalty on Gordon Herbert (India) Limited
SEBI alleged that Gordon Herbert (India) Limited (Noticee) by failing to obtain SCORES authentication and to redress the one pending investor grievances, the Noticee has violated CIR/OIAE/1/2013 dated April 17, 2013 which stated that if SCORES authentication was not obtained within 30 days, it would not only be deemed as non redressal of investor grievances, but, also indicate wilful avoidance of the same read with CIR/OIAE/1/2014 dated December 18, 2014 which stated inter alia that existing listed companies which have failed to obtain authentication shall be dealt with in terms of the circluars issued earlier.
Hence, SEBI imposes a monetary penalty of Rs. 1,00,000/- upon the Noticee i.e., Gordon Herbert (India) Limited for violation of SEBI Circulars No. CIR/OIAE/1/2013 dated April 17, 2013 read with CIR/OIAE/1/2014 dated December 18, 2014.
Implication:
The Noticee shall remit / pay the said amount of penalty within 45 days of receipt of this order.
Update:
Inclusion of Mauritius in the FATF list of “jurisdictions under increased monitoring”
Since Mauritius has made progress on a number of its MER recommended actions to improve technical compliance and effectiveness, including amending the legal framework to require legal persons and legal arrangements to disclose of beneficial ownership information and improving the processes of idenifying and confiscating proceeds of crimes.
SEBI has hence, placed Mauritius in the list of “jurisdictions under increased monitoring”, commonly referred to as the “grey list” and has asked it to work to implement its action plan, including by:
- Demonstrating that the supervisors of its global business sector and DNFBPs implement risk-based supervision.
- Ensuring the access to accurate basic and beneficial ownership information by competent authorities in a timely manner.
- Demonstrating that LEAs have capacity to conduct money laundering investigations, including parallel financial investigations and complex cases.
- Implementing a risk based approach for supervision of its NPO sector to prevent abuse for TF purposes.
- Demonstrating the adequate implementation of targeted financial sanctions through outreach and supervision.
Implication:
FPIs from Mauritius continue to be eligible for FPI Registration with increased monitoring as per FATF norms.
Update:
Review of Margin Framework for Cash and Derivatives segments (except for Commodity Derivatives segment)
With a view to keeping up pace with the changing market dynamics and to bring more efficiency in the risk management framework, a comprehensive review of the margin framework was done in consultation with the Risk Management Review Committee (RMRC) of SEBI. It has been decided to effect changes to the existing risk management framework.
Implication:
The provisions of this Circular shall come into effect from May 01, 2020.
Update:
Implementation of Section 51A of UAPA, 1967 -Removal of two entries from 1267/ 1989 ISIL (Da’esh) & Al-Qaida Sanctions List
SEBI has forwarded a press release regarding removal of two entries from 1267/ 1989 ISIL (Da’esh) & Al-Qaida Sanctions List, issued by the United Nations Security Council (UNSC) namely:-
- AL-MOKHTAR BEN MOHAMED BEN AL-MOKHTAR BOUCHOUCHA of Tunisian origin
- IMAD BEN BECHIR BEN HAMDA AL-JAMMALI of Tunisian origin
Implication:
Registered intermediaries shall continuously scan all existing accounts to ensure that no account is held by or linked to any of the entities or individuals included in the list.
Update:
Monetary penalty on Mr. Babulal Dugar and sons
Mr. Babulal Dugarand his sons namely Mr. Manoj Dugarand and Mr. Vinod Dugar (Noticees) used the multiple identities (sham identities) in the Initial Public Offers (IPOs) during the period 2002 to 2012, and got the shares in multiple names which is fraudulent.
The Noticees had opened multiple De-mat accounts and bank accounts by producing documents acquired by fraudulent means viz. multiple PANs, driving license, ration-cards and have made notional gain of Rs. 3,07,607.30/- at the cost of other investors violating provisions of Section 12A(a),(b) and (c) of SEBI Act read with Regulation 3(a),(b),(c),(d) and 4(1) of PFUTP Regulations.
Hence, SEBI has imposed a monetary penalty of Rs. 9,22,821/- on the Noticees namely Mr. Babulal Dugar, Mr. Manoj Dugar and Mr. Vinod Dugar.
Implication:
The amount of penalty shall be paid jointly or severally by the Noticees within 45 days of the receipt of the said order.
Update:
Monetary Penalty on Murtuza S. Mewawala and others
The allegation against Mr. Murtaza S. Mewawala, Ms. Shabeena M. Mewawala, Mr. Hasnain S. Mewawala, Ms. Sajeeda H. Mewawala and Ms. Shahida S. Mewawala (Noticees) is mainly to the effect that they made a delayed public announcement of open offer for acquiring shares of the Target Company and thus violated the provisions of Regulation 13(1)and 13(2)(b) of SAST Regulations, 2011.
Hence, SEBI imposed a monetary penalty of Rs. 5,00,000/- on the Noticees.
Implication:
The Noticees shall remit / pay the said amount of penalty jointly or severally within 45 days of receipt of this order.
Update:
Monetary penalty on Muthoottu Mini Financiers Limited
Allegation against Muthoottu Mini Financiers Limited (Noticee) is regarding issuing a misleading advertisement related to public issue of NCDs of the Noticee which stated that said issue of Noticee was rated ‘stable by SEBI and RBI’and that using the names of the regulators tends to impart a sense of security to investors and misleading impression to the public at large thereby violating the provisions of regulation 8 of ILDS Regulations which state that no issuer shall issue an advertisement which is misleading in material or which contains any information in a distorted manner or which is manipulative or deceptive.
Hence, SEBI has imposed a monetary penalty of Rs. 10,00,000/- on the Noticee i.e. Muthoottu Mini Financiers Limited.
Implication:
The Noticee shall remit/pay the said amount of penalty within 45 days of receipt of this order.
Update:
Monetary penalty on Ashok Kumar Damani
Ashok Kumar Damani (Noticee) had traded in 9 unique Stock Option contracts during the Investigation Period i.e, April 01, 2014 to September 30, 2015, out of which 194 reversal trades have been found to be non-genuine trades which allegedly led to creation of artificial volume of total 82,64,000 units. The Noticee, by executing non-genuine trades during the investigation period, registered a negative close out difference of Rs. 8,59,60,700/- approx. The trades entered by the Noticee were reversed on the same day within few minutes with same counterparty at a substantial price difference without any basis for significant change in the contract price which indicates that these trades were artificial and non-genuine in nature thereby violating provisions of Regulation 3 (a),(b),(c),(d),4(1) and 4(2)(a) of the SEBI (PFUTP) Regulations, 2003.
Hence, SEBI has imposed a monetary penalty of Rs. 3,00,000/- on the Noticee.
Implication:
The Noticee shall remit/pay the said total amount of penalty within 45 days of receipt of this order.
Update:
Facilitating transaction in Mutual Fund schemes through the Stock Exchange Infrastructure
SEBI had permitted mutual fund distributors to use recognized stock exchanges\’ infrastructure to purchase and redeem mutual fund units directly from Mutual Fund/Asset Management Companies. To further increase the reach of this platform, SEBI has decided to allow investors to directly access infrastructure of the recognized stock exchanges to purchase and redeem mutual fund units directly from Mutual Fund/Asset Management Companies.
Reference: Insurance Regulatory and Development Authority of India
Update:
Committee on studying the feasibility of allowing life insurers to offer indemnity based health policies
In order to examine the feasibility of allowing life insurers offer indemnity based health policies, IRDAI has decided to set up a committee of 9 members, namely to review:-
- Feasibility and the business scope for Life Insurance Companies to offer indemnity based health insurance products
- Extant statutory provisions that are applicable in this regard.
- Any other matter as permitted by the chairperson.
Implication:
The Committee shall meet as often as required and submit its recommendations within two months of issue of this order.
Reference: Ministry of Corporate Affairs
Update:
Companies (Incorporation) Amendment Rules, 2020
MCA has notified the Companies (Incorporation) Amendment Rules, 2020. Under the said rule, MCA has prescribed the procedure for Reservation of name or change of name as follows-
An application for reservation of name shall be made through the web service available at www.mca.gov.in by using web service SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus: INC-32), and
For change of name by using web service RUN (Reserve Unique Name) along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014, which may either be approved or rejected, as the case may be, by the Registrar, Central Registration Centre after allowing re-submission of such web form within fifteen days for rectification of the defects, if any, with effect from the 23rd February, 2020.
It has also substituted “Form No INC-32 (SPICe)” with ” SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus: INC-32″.
Implication:
These changes shall come into force with effect from the 23rd February, 2020.
Update:
Invitation for Public Comments on the Competition (Amendment) Bill, 2020
MCA had constitued a Competition Law Review Committee to review and recommend a robust Competition regime by taking the inputs of key stakeholders and suggest changes in both the substantive and procedural aspects of law.
Hence, public comments are solicited on the draft Competition (Amendment) Bill, 2020.
Implication:
Stakeholders shall submit their comments online by end of business hours on 6th March, 2020 positively.
Update:
Invitation for Public Comments on the Competition (Amendment) Bill, 2020
MCA had constituted a Competition Law Review Committee (CLRC) to review and recommend a robust Competition regime by taking the inputs of key stakeholders and to suggest changes in both the substantive and procedural aspects of law. Accordingly, a Competition (Amendment) Bill, 2020 has been drafted for carrying out amendments in the Competition Act, 2002.
Implication:
Stakeholders shall submit their comments if any, online by end of business hours on 6th March, 2020 positively.
Update:
Companies (Auditor\’s Report) Order, 2020
The Companies (Auditor\’s Report) Order, 2020 shall apply to every company including a foreign company as defined in clause(42) of section 2 of the Companies Act, 2013.
Auditors report shall contain matters specified in paragraphs 3 and 4 provided this order shall not apply to the auditor\’s report on consolidated financial statements except clause (xxi) of paragraph 3. The auditors report on the accounts of a company to which this order applies shall include a statement on matters given in the order. Where, in the auditor\’s report, the answer to any of the questions referred to in paragraph 3 is unfavourable or qualified, the auditor\’s report shall also state the basis for such unfavourable or qualified answer.
Implication:
This order shall come into force on the date of its publication in the Official Gazette.
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