- CBDT vide NOTIFICATION G.S.R. 469(E) [ NO. 55/2020/ F. NO.142/22/2015-TPL], DATED 28-7-2020, has amended the Rule 12CB alongwith Form 64C & 64D for the purpose of Section 115UB being charging section of Income from Investment fund and its unitholders.
- CBDT vide NOTIFICATION S.O. 2512(E) [NO. 56/2020/F. NO. 370142/23/2020-TPL], DATED 29-7-2020 has further extended the due date for furnishing of belated as well as revised Income-tax return for the Assessment Year 2019-20 from 31-07-2020 to 30-09-2020. Further, any tax paid by the senior citizens, who aren’t required to pay advance tax as per provisions of Section 207(2), within original due date i.e. 31-07-2020 for filing ITR for AY 2020-21, shall be treated as advance tax for the purpose of computing interest u/s 234A. The intent is to give relief and also that Senior Citizens need to deposit self assessment tax before 31st July, 2020 in case they intends to avoid levy of interest under section 234A.
- CBDT vide CIRCULAR NO. F.NO. 500/09/2016-APA-I, DATED 7-8-2020, has issue detailed guideline for Mutual Agreement Procedure (MAP). Recently vide G.S.R.282 (E) dated 6thMay, 2020, Rule 44G of the Income-tax Rules, 1962 has been notified. This rule substitutes the previous rules 44G and 44H, which dealt with the same issue of implementation of MAP. The MAP guidance is presented in the following four parts:
- Part A: Introduction and Basic Information;
- Part B: Access and Denial of Access to MAP;
- Part C: Technical Issues; and
- Part D: Implementation of MAP outcomes
- CBDT vide NOTIFICATION G.S.R. 499(E) [ NO. 58/2020/F. NO. 370133/08/2020-TPL], DATED 10-8-2020, has inserted new sub-rule in Rule 37BC that provisions of section 206AA (not required to obtain PAN), shall not apply in respect of payments made to a person being a non-resident, not being a company, or a foreign company if Section 139A r.w.r. 114AAB is satisfied. As per rule 114AAB, the non-resident does not earn any income in India, other than the income from investment in the specified fund during the previous year, TDS as specified in Rule 194LBB needs to be deducted and deposited by the specified fund and the non-resident furnishes the following details and documents to the specified fund, namely:—(a) name, e-mail id, contact number;(b) address in the country or specified territory outside India of which he is a resident;(c) a declaration that he is a resident of a country or specified territory outside India; and(d) Tax Identification Number in the country or specified territory of his residence and in case no such number is available, then a unique number on the basis of which the non-resident is identified by the Government of that country or the specified territory of which he claims to be a resident.
- CBDT vide ORDER F. NO. 187/3/2020/ITA-I [13-08-2020] instructed all the assessment shall be passed by the National e-Assessment Centre through the Faceless Assessment Scheme, 2019. Now, the National e-Assessment Centre shall intimate the assessee for conduct of faceless assessment in case wherein notice has been issued by AO. The Board has also extended its scope to cover best judgment assessments. However, the board has provided two exception as well. Assessment orders in cases assigned to Central Charges & International Tax Charges. In view of the same NOTIFICATION F.NO.173/ 165/2020 -ITA-I [13-08-2020], has been also issued for detailed guideline for implementation of faceless assessment scheme 2019.
Goods & Services Tax (GST)
- CBIC vide Notification No. 61/2020 – Central Tax dated 30th July 2020 has amended Notification No. 13/2020 which shall come into force from 01st of October 2020 whereby E-Invoicing has been made applicable for the taxpayer having aggregate turnover of more than 500 crore.
- CBIC vide Notification No. 60/2020 – Central Tax dated 30th July 2020 has notified the Fomat /Schema for E-Invoicing under rule 48(4) of the CGST Rules 2017.
- CBIC vide Notification No. 62/2020 – Central Tax dated 30th July 2020 has given an option for Aadhar authentication.
Every applicant for GST registration can opt for the Aadhaar authentication. The exceptions are persons exempted by the Central government under the CGST Act or those who must mandatorily undergo the Aadhaar authentication under section 25(6C) of the CGST Act. The revised rule will be effective for applications made on or after 21st August 2020.
From 1st April 2020 up to 20th August 2020, all the applicants submitting registration application under GST had to mandatorily undergo Aadhaar authentication for obtaining registration.
The applicants who opt for it must submit an Aadhaar Card along with the application for registration under GST. After this, they need to E- verify the same on the GST portal. An OTP will be sent on the mobile number and email ID linked to the Aadhaar card. Only upon entering this OTP, the Aadhaar will get e-validated. After this, whenever a taxpayer files his returns or uses any services on the GST portal, an OTP will be sent on the mobile number and email ID, which is linked to its Aadhaar number. Only after entering this OTP, a taxpayer can proceed to file the return.
If a person fails to do an Aadhaar authentication when opted or has not opted for it, the registration will be granted after a physical verification is done of the principal place of business.
- CBIC vide Notification No. 63/2020 – Central Tax dated 25th August 2020 has appointed 1st day of September 2020 as the date on which the provisions of Section 100 of the Finance (No. 2) Act, 2019 (23 of 2019), shall come into force. Interest on the delayed payments of GST liability is to be charged on the net liability (Gross Output- Input) from 1st of September 2020. However, the GST council in its 39th meeting recommended to apply the above provision retrospectively.
Companies Act, 2013
- MCA has notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020, which shall come into force on the date of their publication in the Official Gazette i.e. 24-08-2020.
A new proviso has been added in Rule 2 (1)(e), to provided that any Company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22 and 2022-23 subject to the conditions that such research and development activities shall be carried out in collaboration with any of the institutes or organisations mentioned in item (ix) of Schedule VII to the Act and details of such activity shall be disclosed separately in the Annual Report on CSR included in the Board’s Report. Further, to pave way for the said proviso, in Rule 4(1) the words, excluding activities undertaken in pursuance of its normal course of business have been deleted.
- MCA has notified the further amendments in Schedule VII to the Companies Act, 2013, which shall come into force on the date of their publication in the Official Gazette i.e. 24-08-2020.
The amendments are made in the item (ix) and the entries thereto, to substitute the same with the new clause. According to the amendments, contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government has been added in sub-clause (a) and new institutions have been to the list, which are engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs).
- MCA has issued Clarification on Extension of Annual General Meeting (AGM) for the financial year ended as at 31.03.2020 beyond the statutory period provided in Section 96 of the Companies Act, 2013.
MCA has examined the matter and it is stated that the Ministry had already issued regarding holding of AGM through video conferencing (VC) or other audio-visual means (OAVM) for the calendar year 2020. In addition, the companies which are unable to hold their AGMs were advised to prefer applications for extension of AGM at a suitable point of time before the concerned Registrar of Companies under section 96 of the Act. MCA has once again reiterated that the companies which are unable to hold their AGM for the financial year ended on 31.03.2020, despite availing the relaxations, have to file their applications in form No. GNL-1 for seeking an extension of time in holding of AGM for the financial year ended on 31.03.2020 with the concerned Registrar of Companies on or before 29.09.2020. Further, the Registrars of Companies are hereby advised to consider all such applications (filed in Form No. GNL-1) liberally in view of the hardships faced by the stakeholders and to grant extension for the period as applied for (up to three months) in such applications.
- MCA has released the Report of the Committee on Business Responsibility Reporting, constituted for preparing Business Responsibility Reporting formats for listed and unlisted companies.
The committee has endeavoured to draft a report with a view towards global developments that are increasingly seeking businesses to be responsible and sustainable towards their environment and society. To better reflect the intent and scope of the reporting requirement, the Committee recommends that the Business Responsibility Report be called the Business Responsibility and Sustainability Report (BRSR). The Committee also proposes two formats for disclosures: a comprehensive format and a Lite version. The Committee is of the view that implementation of the reporting requirements should be done in a gradual and phased manner. With regard to listed entities, reporting may be done by top 1000 listed companies (by market capitalisation) as applicable presently, or as prescribed by SEBI. The reporting requirement may be extended by MCA to unlisted companies above specified thresholds of turnover and/or paid-up capital. Further, the Committee recommends that smaller unlisted companies below this threshold may, to begin with, adopt a lite version of the format, on a voluntary basis. The Committee recommends that the BRSR be integrated with the MCA21 portal. This would ensure that all information already filed on the MCA21 portal by companies would be automatically filled while filing the BRSR. The Committee also recommends that a Guidance Note on BRSR should be prepared to enable companies to disclose their actions on the principles in a more meaningful manner.
- MCA has issued a Clarification on dispatch of notice under Section 62(2) Companies Act, 2013 by listed companies for rights issues opening upto 31st December, 2020.
On the basis of the representations received for extending the validity of earlier circular and after taking into consideration the circular issued by SEBI, MCA has decided that clarification given under para 2 of General Circular 21/2020, would continue to be applicable for rights issues, in case of listed companies, opening up to 31st December, 2020. Accordingly, in case of listed companies, which comply with relevant circulars issued by SEBI, inability to dispatch the relevant notice to shareholders through registered post or speed post or courier would not be viewed as a violation of section 62(2) of the Act for rights issues opening up to 31st December, 2020. Other requirements provided in the said General Circular remain unchanged.
Accordingly, in case of names reserved for 20 days for new company incorporation. SPICE+ Part B was supposed to be filed within 20 days of name reservation. Now names expiring any day between March 15, 2020 to July 31, 2020, would be extended by 20 days beyond July 31, 2020. Further, the names reserved for 60 days for change of name of the company, the Form INC-24 had to be filed within 60 days of name reservation. Now the period has been extended for names expiring any day between March 15, 2020 to July 31, 2020 by 60 days beyond July 31, 2020. MCA has also extended the RSUB validity for companies. The SRNs where the last date of Resubmission (RSUB) falls between March 15, 2020 to July 31, 2020, an additional 15 days beyond July 31, 2020 is allowed. MCA has allowed extended the names reserved for 90 days for new LLP incorporation or change of name and FiLLiP Form 5 needs to be filed within 90 days of the name reservation. Now, the names expiring any day between March 15, 2020 to July 31, 2020 would be extended by 20 days beyond July 31, 2020. The RSUB validity for LLPs. The SRNs where the last date of resubmission (RSUB) falls between 15th March 2020 to July 31, 2020, an additional 15 days would be allowed from July 31, 2020 for resubmission
- MCA in consultation with the National Financial Reporting Authority has notified the Companies (Indian Accounting Standards) Amendment Rules, 2020 which shall come into force on the date of their publication in the Official Gazette i.e. 24/07/2020.
The entities must apply these amendments to business combinations, whose acquisition date is on or after the start of the first annual reporting period beginning on 1st April, 2020, and to asset acquisitions that take place on or after that period. The new Rules amend Indian Accounting Standards 107 that relates to disclosures to be made in respect of financial instruments by introducing a provision specifying the disclosures to be made where there is uncertainty due to Interest Rate Benchmark Reform. The new Rules amend Indian Accounting Standards 109 providing detailed provisions for temporary exceptions from applying specific hedge accounting requirements and transition for hedge accounting. These must be applied by entities for annual periods starting on or after 1st April, 2020. Indian Accounting Standard 116 has been amended to provide that subject to specified conditions, any rent concession due to COVID-19 may, if the lessee so elects, not be assessed as a lease modification. This is subject to disclosures to be made by the lessee and shall apply to annual reporting periods on or after 1st April, 2020 or where the lessee has not approved the financial statements prior to this amendment, it may be applied for such periods from 1st April, 2019. Further, in Indian Accounting Standards 1 and 8, changes have been made to the definition of material in relation to material information
- MCA has finally released the much awaited e-Form PAS – 6 for Reconciliation of Share Capital Audit Report(Half-yearly) Pursuant to sub-rule (8) of rule 9A Companies (Prospectus and Allotment of Securities Rules, 2014.
All information shall be furnished for the hall year ended 30th September and 31st March in every financial year for each ISIN separately. Accordingly, every unlisted public company governed by this rule shall submit Form PAS-6 to the Registrar with such fee as provided in Companies (Registration Offices and Fees) Rules, 2014 within sixty days from the conclusion of each half year duly certified by a company secretary in practice or chartered accountant in practice. The e Form PAS-6 is now available for filing as e Form w.e.f 15th July 2020. Stakeholders may please take note and plan accordingly
The Ministry of Corporate Affairs after a due examination has considered the extension of the last date of filing of Form NFRA-2, which is required to be filed under Rule 5 of the National Financial Reporting Authority Rules, 2018. MCA has decided to extend the time limit for filing Form NFRA-2 will be 270 days (earlier 150 days) from the date of deployment of this form on the website of National Financial Reporting Authority (NFRA).
- The MCA has included contributions towards the Central Armed Police Forces (CAPF) and Central Paramilitary Forces (CPMF) veterans and their dependents including widows, within the definition of Corporate Social Responsibility (CSR).
The MCA has issued a notification for amendment in the Schedule VII of the Companies Act, 2013 which shall come into force on the date of its publication in the Official Gazette i.e. 23-06-2020. In exercise of the powers conferred by Section 467(1) of the Companies Act, 2013, the Central Government hereby makes the further amendments in Schedule VII to insert the words “Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents including widows;” after the words “war widows and their dependents” in item (vi) of Schedule VII. The notification has widened the scope of CSR, which was earlier restricted activities benefiting the army, navy and air force veterans and their dependents and war widows.
The Trade Marks Registry has issued a Public Notice to conduct Show-Cause Hearing through Video Conferencing.
Further, hearings will be scheduled in those matters where applicant or authorised agent give consent and confirm their participation for the hearing through Video Conferencing. In this regard, all applicants / Agents who are interested in hearing of their matters through video conferencing are requested to submit their consent to attend Show-Cause Hearing by sending an email at email@example.com. Further, hearings will be scheduled in those matters where applicant or authorised agent give consent and confirm their participation for the hearing through Video Conferencing. In this regard, all applicants / Agents who are interested in hearing of their matters through video conferencing are requested to submit their consent to attend Show-Cause Hearing by sending an email at firstname.lastname@example.org. Email sent to any other email address shall not be entertained. It may be noted that only cases for those parties will be scheduled for hearing where concern applicants or their authorised agent submit consent on or before 05/09/2020. Others applications will be kept in abeyance to schedule hearing in person as and when hearing with physical presence are started. It may further be noted that if the applicant or its authorised agent as the case may remain absent on the date of hearing the application will be decided as per law. For submitting consent for hearing through video conferencing applicant or its authorised agent shall submit his request by writing in subject “consent for Show-cause Hearing through Video Conference”. The Office will try to schedule all pending applications of concern applicant / agent on the same day in sequential order as per available time
- The Listed Companies may approach SEBI to resolve grievances against proxy advisors, who advise shareholders on corporate governance issues and assist them with a voting recommendation.
This will be applicable from September 1, 2020. The regulator noted that proxy advisors, over the past few years, have played a key role in enabling shareholders to effectively participate in corporate governance decisions. Proxy advisors provide advice to institutional investors or shareholders of a listed entity, in relation, to exercise of their rights in the company including a voting recommendation on agenda items. However, due to the inherent nature of the work, it is probable that proxy advisors and listed entities may have different views on any agenda item of the listed entity leading to grievances. The market watchdog will examine the matter for non-compliance by proxy advisors with the provisions of the code of conduct specified under Research Analyst Regulations and the procedural guidelines for proxy advisors.
- SEBI has issued the procedural guidelines for proxy advisors under the SEBI (Research Analyst) Regulations,2014.
The proxy Advisors shall formulate the voting recommendation policies and disclose the updated voting recommendation policies to its clients. It shall disclose the methodologies and processes followed in the development of their research and corresponding recommendations to its clients. It shall alert clients, within 24 hours of receipt of information, about any factual errors or material revisions to the report. Further, it shall share their report with its clients and the company at the same time. This sharing policy should be disclosed by proxy advisors on their website. It shall also disclose in their recommendations the legal requirement. The provisions of this Circular shall be applicable with effect from September 01, 2020.
- The SEBI has issued the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) (Second Amendment) Regulations, 2020
To further amend the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 which shall come into force on the date of their publication in the Official Gazette i.e. 05-08-2020. The amendments are made under Regulation 42(1) related to the record date or date of closure of transfer books. Accordingly, the listed entity shall intimate the record date to for the events, to all the stock exchange(s) where it is listed or where stock derivatives are available on the stock of the listed entity or where listed entity’s stock form part of an index on which derivatives are available, such as declaration of dividend; issue of right or bonus shares; Issue of shares for conversion of debentures or any other convertible security; Shares arising out of rights attached to debentures or any other convertible security; Corporate actions like mergers, de-mergers, splits, and bonus shares, where stock derivatives are available on the stock of listed entity or where listed entity’s stocks form part of an index on which derivatives are available; and Such other purposes as may be specified by the stock exchange(s)
- The SEBI has issued an amended International Financial Services Centre (IFSC) Guidelines pertaining to eligibility criteria and the shareholding limit for clearing corporations that wish to operate in such centers.
Under the norms, any Indian recognised stock exchange or clearing corporation, or, any recognised stock exchange or clearing corporation of a foreign jurisdiction will form a subsidiary to provide the services of clearing corporation in IFSC wherein at least 51 percent stake is held by such exchange or clearing corporation. The remaining share capital may be acquired or held by any other person, whether Indian or foreign jurisdiction. Besides, such person will not at any time, directly or indirectly, either individually or together with persons acting in concert, acquire or hold more than 5 percent stake in a clearing corporation in IFSC, subject to applicable laws.
The Securities and Exchange Board of India has released the circular to extend the timeline for submission of financial results for the quarter/ half-year/financial year ended June 30, 2020.
Earlier, SEBI had extended the timeline for submission of financial results by listed entities for the quarter/half-year / financial year ended 31st March 2020 to July 31, 2020 due to the impact of the CoVID19 pandemic. According to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which requires a listed entity to submit its quarterly/half-year/annual financial results within forty-five days or sixty days, as applicable, from the end of each quarter/half-year/financial year. Accordingly, listed entities are required to submit the financial results for the quarter/half year ended June 30, 2020, on or before August 14, 2020. After consideration, it has been decided to extend the timeline for submission of financial results under Regulation 33 of the LODR Regulations, for the quarter/half-year/financial year ended June 30, 2020, to September 15, 2020.
SEBI has come out with a framework for handling investor complaints by exchanges as well as the standard operating procedure for actions to be taken against listed companies for failure to redress such grievances. Under the framework, exchanges can levy penalty on companies in case of non-redressal of investor complaints and ask depositories to freeze the shareholding of the promoter entities. The procedure will be applicable for complaints related to non-updation of address or signature; non-receipt of bonus, dividend, interest for delay in dividend, duplicate debt securities certificate and share certificate. In addition, grievances pertaining to non-receipt of securities in public issues or rights issues, not receiving securities after conversion/consolidation/splitting; and receiving refund or dividend and shares in physical mode instead of electronic mode will also be applicable. Further, it is clarified that the exchanges will not handle grievances related to monopoly and anti-competitive practices, chit funds, company, where moratorium order is passed against the company in winding up/ insolvency proceedings and companies under liquidation and the official liquidator has been appointed, among others. In case the company does not redress it within 30 days from the date of receipt of the complaint, such direct complaints will be forwarded to designated stock exchange (DSE) through SCORES. This will come into force from September 1, 2020.
- The Securities and Exchange Board of India has issued the master circular for Mutual Funds superseding the previous Master Circular issued in the year 2018.
For effective regulation of the Mutual Fund Industry, Securities and Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order to enable the industry and other users to have access to all the applicable circulars at one place, Master Circular for Mutual Funds has been prepared. This Master Circular is a compilation of all the circulars issued by SEBI on the above subject, which are operational as on the date of this circular. In case of any inconsistency between the master circular and the applicable circulars, the contents of the relevant circular shall prevail. The Salient Features of this circular includes Offer document for the scheme; Conversion and consolidation of scheme and launch of an additional plan; New Products; Risk Management System; Disclosure and Reporting Norms; Governance Norms; Secondary Market Issue; Net Asset Value; Valuation; Loads, Fees and Expenses; Dividend Distribution Procedures; Investment by Foreign Investors in Scheme; Advertisements; Investor Rights and Obligation; Certification and registration of intermediaries and Transaction in mutual funds units.
- The SEBI has issued a circular to further extended the timelines for compliance with the regulatory requirements by the Depository Participants (DPs)/Registrars to an Issue & Share Transfer Agents (RTAs)and KYC Registration Agency (KRA) mentioned in the SEBI circulars.
In terms of this Circular, the extensions shall be made effective for the processing of Demat request form by issuer/ RTA or by Participants now carry a period of exclusion from 23rd March, 2020 till 30th September, 2020. It also applies to the requirement of updating the KYC application form and supporting documents of the clients on the system of KRA within 10 working days. Further, a period of 15 days, after 30th September 2020 is allowed to Depository/ DPs to clear backlogs. Submission of half-yearly Internal Audit Report (IAR) by DPs for the half-year ending on March 31, 2020, is extended till 30th September. 2020. In the case of redressal of investor grievances, the transmission of securities, closure of Demat account, the period of exclusion is from 23rd March, 2020 to 30th September, 2020. The systems audit on an annual basis, the extended timeline specified is 30th September, 2020 for the financial year ending on 31st March, 2020.
- The Insurance Regulatory and Development Authority of India has issued dividend criteria for equity investment under Approved Investment.
IRDA has issued a circular, after considering the representations made by Life and General Insurance Councils, the Authority in exercise of the powers conferred under Regulation 14(2) of the IRDAI (Investments) Regulations, 2016, has permitted Insurers to classify investments in Preference Shares and Equity Shares as a part of “Approved Investment” if such Shares have paid a dividend for at least 2 years out of 3 consecutive years immediately preceding instead of for at least 2 consecutive years immediately preceding (as required under Regulation 3(a)(4) and 3(a)(5) of IRDAI (Investment) Regulations, 2016) for the period from 1st April 2020 to 31st March 2021.
- The RBI has released a Review of Guidelines for Core Investment Companies (CIC) which deals with risk management, corporate governance, and disclosure requirements of the CICs.
A Core Investment Companies (CIC) is a non-banking financial company (NBFC) that deals in the business of acquisition of shares and securities and hold not less than 90% of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt, or loans in group companies. Its investments in equity shares in group companies constitute a minimum of 60% of its net assets. The notification released by RBI defined the Adjusted Net Worth (ANW), as the amount representing any direct or indirect capital contribution made by one CIC in another CIC, to the extent such amount exceeds ten percent of Owned Funds of the investing CIC, shall be deducted. All other terms and conditions for the computation of ANW remain the same. To address the complexity in group structures and the existence of multiple CICs within a group, it has been decided that the number of layers of CICs within a Group (including the parent CIC) shall be restricted to two, irrespective of the extent of direct or indirect holding/ control exercised by a CIC in the other CIC. All the CICs with asset size of more than Rs. 5,000 Crores shall appoint a Chief Risk Officers (CRO) with clearly specified roles and responsibilities. The disclosure requirements will apply to all NBFC-CICs and Corporate governance requirements will be as per the Companies Act, 2013.
- The RBI through an announcement on the Foreign Liabilities and Assets Information Reporting (FLAIR) system website has once again extended the due date of filing of Foreign Liabilities and Assets (FLA) Return for the financial year 2019-20 to 14th August, 2020 from 31st July, 2020.
The FLA Return needs to be submitted by all Indian companies which have received Foreign Direct Investments (FDI) or made any FDI abroad (overseas investment) in the previous year(s) including the current year i.e. who holds Foreign Assets or Liabilities in their Balance Sheets. The due date of filing the FLA Return for the financial year 2019-20 was 15th July, 2020 which was extended to 31st July, 2020, and now further extended up to 14th August, 2020. Non-filing of the return before the due date will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA. Further, the submission of annual return on FLA through the web-based FLAIR portal for the financial year 2019-20 has been started. Entities which are filing FLA return for the first time/ with revised UIN (Unique identification number) are required to register themselves first for generating login credentials and they can file FLA return. However, the entities which have already registered earlier may submit FLA-2020 using their login credentials.
- RBI comes up with clarifications on a new definition of Micro, Small and Medium Enterprises, based on the representations from IBA and banks regarding the applicability of certain aspects on new criteria for classifying the enterprises as micro, small and medium enterprises.
It is clarified that all the enterprises are required to register online and obtain ‘Udyam Registration Certificate’ and All lenders may, therefore, obtain ‘Udyam Registration Certificate ’from the entrepreneurs. Further, the existing Entrepreneurs Memorandum and Udyog Aadhaar Memorandum (UAMs) of the MSMEs obtained till 30th June 2020 shall remain valid till 31st March 2021 and all enterprises registered till 30th June 2020, shall file new registration in the Udyam Registration Portal well before March 31, 2021, and Udyam Registration Certificate’ issued on self-declaration basis for enterprises exempted from filing GSTR and/or ITR returns will be valid for the time being, upto March 31, 2021.
- The Reserve Bank of India has issued the Foreign Exchange Management (Export and Import of Currency) (Amendment) Regulations, 2020 to further amend the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015.
A new Regulation 9 has been inserted through this amendment under the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015. The Regulation 9 has been inserted which specifies the Reserve Bank’s power to permit import or export of foreign currency. Accordingly, notwithstanding anything contained in these regulations, the Reserve Bank may, on an application made to it and on being satisfied that it is necessary to do so, allow any person to take or send out of India to any country or bring into India from any country currency notes of Government of India and /or of Reserve Bank of India subject to such terms and conditions as the Reserve Bank may stipulate.
- The Food Safety and Standards Authority of India (FSSAI) has issued the Standard Operating Procedures for applying and processing of refund of erroneous or inadvertent payments credited into the FSSAI Account in respect of license registration fee.
There have been instance, where the applicant has applied several times for the registration on the FSSAI online portal. According to the Standard Operating Procedure, the request for the refund of the payment of a fee for the license or the registration shall be made within 1 year of the payment, online on the registration portal. The application shall be dealt with by the Regulatory Compliance Division (RCD) shall then forward the complaint to the IT Division. After the inspection has been completed by the IT Division, the request shall then be processed with the proper facts by the RCD for the repayment. Further, the Repayment shall be processed according to the administrative structure provided by the competent authority and no Refund of less than Rupees 100 shall be processed. The refund shall be done only in cases of double payment or due to some technical glitch, made through razor pay. The amount shall be then refunded through razor pay only. The fee paid successfully for the registration or the license shall not be refunded.
- The NCLT has mandated that it shall not accept new petitions without a record of default U/s. 7 of IBC, 2016, wherever available from the Information Utility.
With an intent to provide some relief, in partial modification to the order issued on 12/05/2020, the Hon’ble NCLT has directed all concerned to file default record from Information Utility along with the new petitions being filed under Section 7 of Insolvency and Bankruptcy Code, 2016 wherever available with the Information Utility. Further, the Authorized Representatives / Parties in the cases pending for admission under the aforesaid section of IBC also directed to file default record from Information utility, wherever available with the Information Utility. Earlier it was mandated to have records from Information Utility and no new petition was entertained without a record of default under section 7 of IBC, 2016.
- The NCLT has further notified that the Regular Proceedings at NCLT shall now start from 20-08-2020 instead of 05-08-2020.
The regular proceedings at NCLT Delhi were stopped immediately after the lockdown was announced on 24-03-2020. The NCLT has earlier decided and fixed the dates of hearings for Principal Bench and for all its New Delhi Benches (Court No. II, III, IV, V & VI) effective from 15-06-2020 which was re-notified from 01-07-2020, 20-07-2020, and 05-08-2020. However, NCLT has now decided that all matters listed for 05-08-2020, 06-08-2020 shall now be held on 20-08-2020, 21-08-2020, 22-08-2020 respectively, and so on. All stakeholders are requested to take note of the same.
- The IBBI has released the wonderful document on Avoidance Transaction – Red Flags for the benefit of Insolvency Professionals (IPs).
The IBBI has facilitated the preparation of this document for the use of IPs in understanding and identifying various red flags which may point to the need for a review of Avoidance transactions as covered under Sections 43, 45, 50 and 66 of the Code. In furtherance to its endeavour of achieving the objectives of the Code and keeping in mind the role of an IP, IBBI has released this document which is intended to guide the IPs to identify situations which would merit such Avoidance Transaction review and resultant application to AA. For the convenience of IPs, the various Red Flags have been collated and placed under the following six broad categories, namely, Red Flags related to Entity, Group and Operations; Maintenance of Books and Records; Regulatory Compliance and Litigation; Independent Auditor Reports; Financial Statements and Board Reports; and Classification and Reporting of Frauds (as covered under RBI Master Directions).
- The IBBI has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2020.
The amendment is brought under regulation 4A which deals with the choice of authorized representative in which the interim resolution professional shall identify three insolvency professionals who are not his relatives or related parties, having their addresses, as registered with the Board, in the State or Union Territory, as the case may be, which has the highest number of creditors in the class as per their addresses in the records of the corporate debtor, Provided that where such State or Union Territory does not have adequate number of insolvency professionals, the insolvency professionals having addresses in a nearby State or Union Territory, as the case may be, shall be considered. Under regulation 16A the authorized representative shall circulate the agenda to creditors in a class and may seek their preliminary views on any item in the agenda to enable him to effectively participate in the meeting of the committee. Further, for approval of a regulation plan under Regulation 39, the committee shall, evaluate the resolution plans and record its deliberations on the feasibility and viability of each resolution plan, and vote on all such resolution plans simultaneously.
- The IBBI has notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2020
To further amend Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 which shall come into force on the date of their publication in the Official Gazette i.e 05-08-2020. The amendments have been made in Regulation 5 related to the appointment of the liquidator has been substituted, stating that the corporate person shall appoint an Insolvency Professional as liquidator, and, wherever required, may replace him by appointing another insolvency professional as liquidator, by a resolution passed under Section 59(3)(c) or Regulation 3(1)(c), as the case may be. Provided that such resolution shall contain the terms and conditions of appointment of the liquidator, including the remuneration payable to him. The insolvency professional shall, within three days of his appointment as liquidator, intimate the Board about such appointment.
- The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency and Bankruptcy Board of India (Liquidation Process) (Third Amendment) Regulations, 2020
To further amend Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 which shall come into force on the date of their publication in the Official Gazette i.e 05-08-2020. The amendments are made in Regulation 4(2) which specifies the liquidator has to distribute the amount realised and if he does not do so, there shall be a corresponding fee applicable. The Regulations require the committee of creditors to fix the fee payable to the liquidator. Where the fee has not been fixed by the committee of creditors, the Regulations provide for a fee as a percentage of the amount realised and of the amount distributed by the liquidator. There have been instances where a liquidator realises the amount while another liquidator distributes the same to stakeholders. The amendment made to the Regulations yesterday clarifies that where a liquidator realises any amount but does not distribute the same, he shall be entitled to a fee corresponding to the amount realised by him.
- The Ministry of Micro, Small & Medium Enterprises has issued an Office Memorandum clarifying the existing Entrepreneurs Memorandum (EM)Part-III Udyog Aadhaar Memorandum (UAM) – I and New Udyam Registration.
Based on the representations seeking clarifications on certain issues it is clarified that all the existing EM Part II and UAMs obtained till 30.06.2020 shall remain valid till 31.03.2021. There are also doubts about whether existing UAM holders may edit or amend their details on the UAM portal. It is clarified that the same can be done till 31.3.2021. Those enterprises that have not entered their Aadhaar or PAN number so far in the UAM portal are hereby advised to obtain Udyam Registration Number well before 3l.3.2021. It is further clarified that online Form for Udyam Registration captures depreciated cost as on 31st March each year of the relevant previous year for Value of Plant and Machinery or Equipment. Therefore, the value of Plant arid Machinery or Equipment’s for all purposes shall mean the Written Down Value (WDV) as at the end of the Financial Year as defined in the Income Tax Act and not the cost of acquisition or original price, which was applicable in the context of the earlier classification criteria.
- The Ministry of Finance has issued a notification for Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2020
To further amend Foreign Exchange Management (Non-debt Instruments) Rules, 2019, which shall come into force on the date of their publication in the Official Gazette 27/07/2020. Amendments are carried out to insert a new rule 2A which specifies the rules to be administered by the Reserve Bank of India (RBI), relating to interpret and issue such directions, circulars, instructions, clarifications, as it may deem necessary, for effective implementation of the provisions of these rules. Further Schedule 1, serial number 9.3 which specifies the sectoral cap and entry route for air transport services has been substituted.
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