Legal Updates December 2019 Edition

Income Tax

• CBDT vide Press release dated 12.12.2019 launches new govt saving schemes in place of old saving schemes.
• CBDT vide Press release dated 16.12.2019 has decided to extend the last date for payment of December instalment of Advance tax for F.Y. 2019-20, from 15^th December 2019 to 31^st December 2019 in case of all the assessees, Corporate and other than Corporate, in the North Eastern States.

Ø   CBDT vide Notification No. 104/2019[G.S.R. 937 (E) (F. NO. 370142/28/2019-TPL)], Dated 18-12-2019 amends Form 10DA for claiming deduction u/s 80JJAA in respect of employment of new employees.

• CBDT vide Circular No.31/2019, dated 19.12.2019 hereby extends the due date for payment of tax deducted at source under section 194M during the month of September, 2019 and October, 2019 and the due date for furnishing the challan-cum-statement in Form 26QD for the same, from 31-10-2019 and 30-11-2019 respectively to 31-12-2019. Consequently, the due date of furnishing of the certificate of deduction of tax in Form 16D has also been extended for the tax deducted during the month of September, 2019 and October, 2019 to 15-1-2020.
• CBDT ORDER [F. NO. 225/306/2019-ITA-II], Dated 24-12-2019 hereby further extends the ‘due-date’ for filing of Income-tax Returns/Tax Audit Reports to 31st January, 2020 in respect of all categories of income-tax assessees in the Union Territory of Jammu and Kashmir and Union Territory of Ladakh.
• CBDT ORDER [F. NO. PR.CCIT (NeAC)/2019-20/61], Dated 24-12-2019 hereby With a view to provide relief to the taxpayers and tax professionals and to facilitate the compliance with respect to e-Assessment proceedings under E-assessment Scheme, 2019, the time limit for filing of response to notices under section 142(1) of the Income-tax Act issued up to 24.12.2019 by the National e-Assessment Centre is extended up to 10.01.2020 or time given in such notices, whichever is later.
• CBDT vide Circular No.32/2019, dated 30.12.2019 hereby prescribed electronic modes for accepting payments by the specified persons (every person having a business turnover of more than Rs 50 Crore). Following modes are notified in electronic modes in addition to other electronic modes:

(i) Debit Card powered by RuPay; (ii) Unified Payments Interface (UPI) (BHIM-UPI); and (iii) Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code.

 

Therefore, with effect from 0 I” January, 2020, the specified person must provide the facilities for accepting payment through the prescribed electronic modes. In this connection, it may be noted that the Finance Act has also inserted section 271 DB in the Act, which provides for levy of penalty of five thousand rupees per day in case of failure by the specified person to comply with the provisions of section 269SU. In order to allow sufficient time to the specified person to install and operationalise the facility for accepting payment through the prescribed electronic modes, it is hereby clarified that the penalty under section 271 DB of the Act shall not be levied if the specified person installs and operationalises the facilities on or before 31″ January, 2020. However, if the specified person fails to do so, he shall be liable to pay a penalty of five thousand rupees ay m 01″ February, 2020 under section 271 DB of the Act for such failure.

• CBDT vide Notification No. 107/2019, Dated 30-12-2019 extends the due date of linking of Aadhar no with PAN from 31.12.2019 to 31.03.2019.

International Taxation

• CBDT vide Office Memorandum dated 31.12.2019 proposes to insert new rule 29BA and Form 15E to streamline the process of passing of such orders under section 195(2) of the Act.

Goods & Services Tax (GST)

 

• CBIC vide Removal of difficulty order (ROD) Order No. 09/2019-Central Tax dated 03^rd December,2019 extended the last date for filing of appeals before the GST Appellate Tribunal against orders of Appellate Authority on account of non-constitution of benches of the Appellate Tribunal.
• Following State/Area Benches of the Goods and Services Tax Appellate Tribunal (GSTAT) notified- 1.) Mizoram- Aizawal 2.) Rajasthan- Jaipur 3.) Karnataka 4.) Rajasthan- one area of Jodhpur
• Blocking/unblocking of EWB generation facility has been implemented on EWB Portal from 2^nd December, 2019.
• CBIC vide Notifications no. 63, 64, 65 and 66 /2019 – Central Tax all dated 14th November, 2019 extended the Due dates for GSTR-1, GSTR-3B and GSTR-7 for the state of Jammu and Kashmir.
• The updated List of CGST Nodal officers of IT Grievance redressal from all CGST Zones, containing their names, designations, addresses, phone numbers and e mails, has been uploaded on the GST Portal which can be accessed on http://cbic.gov.in/htdocs-cbec/gst/index.
• E-Invoice:

  Notification no. 68, 69, 70, 71 & 72/2019 – Central Tax all dated 13th December, 2019:

1. Starting from April 1,2020 a new invoicing system is to be introduced in the GST business process. A standardised protocol will be enabled to generate and read electronic invoices.
2. An e-invoice raised by a trader can be read by computer systems using dynamic QR code up or down the supply chain. The consumer, too, can integrate the data on their systems.
3. The GST Council has approved the introduction of e-invoicing in phases for reporting of business-to-business (B2B) invoices to the GST System. This will be introduced on a voluntary basis to begin with.
4. Taxpayers with a turnover of over ₹500 crore can implement it on voluntary (trial) basis from January 1, 2020 while those with a turnover of over ₹100 crore can adopt it (on voluntary trial basis) from February,1 2020.
5. It shall be made mandatory for all taxpayers with a turnover of over ₹100 crore from April 1, 2020.
6. The e-invoice schema and template, as approved by the GST Council, are available in the GSTN website
7. An invoice issued by a registered person, whose aggregate turnover in a financial year exceeds INR 500 crores, to an unregistered person, shall have Quick Response (QR) code

• CBIC vide Notification No. 76, 77 & 78 /2019 – Central Tax, all dated 26th December, 2019 extended the Last date for GSTR-1 to 31st December, 2019 for the taxpayers, having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or current financial year, and having principal place of business in the State of Assam, Manipur or Tripura, for the month of November, 2019, also Last date for GSTR-3B extended to 31st December, 2019 and Last date for GSTR-7 extended to 25th December, 2019.
• CBIC Vide Notification No. 74/2019 – Central Tax dated 26th December, 2019 (deemed to have come into force with effect from the 19th day of December, 2019) amends the Notification No. 4/2018 – Central Tax dated 23rd January, 2018 by purview of which Late fee payable under section 47 of the CGST Act shall stand waived for the registered persons who failed to furnish the details of outward supplies in FORM GSTR-1 for the months/quarters from July, 2017 to November, 2019 by the due date but furnishes the same in FORM GSTR-1 between the period from 19th December, 2019 to 10th January, 2020.
• Rule 36(4) amended wherein effectively ITC shall not exceed now 10% (Earlier 20%) of the eligible credit reflected in GSTR-2A.
• New Rule 86A inserted for Blocking of ITC Ledger, Power under Rule 86A is exercised by authorities if they have reason to believe that ITC is ineligible or has been fraudulently availed. ITC is said to have been availed fraudulently in following cases :-
  1. Supplier found non-existent or not conducting business from its registered place.
  2. Taxes not paid into the Government Treasury, i.e. the supplier has not paid GST against prescribed documents on which recipient availed credit.
  3. Recipient availed credit without receipts of goods or services.
  4. Recipient is not in possession of tax invoice, debit note or any other document prescribed under rule 36.

Companies Act, 2013

 

 

• MCA extends the last date of filing of Form PAS-6 (Reconciliation of Share Capital Audit Report – Half yearly) without additional fees for the half-year ended on 30.09.2019 will be sixty days from the date of deployment of this form on the website of the Ministry.

The Ministry has received representations regarding extension of the last date of filing of Form PAS-6 under rule 9A (8) of the Companies (Prospectus and Allotment of Securities) Rules, 2014. Earlier this year MCA has notified that the first such report in Form PAS – 6 shall be filed for the half year ending on 30-09-2019 within 60 days i.e. by 30-11-2019.

• MCA has notified the extension of the last date of filing of Form NFRA–2.

The Ministry of Corporate Affairs has received several representations regarding 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 90 days from the date of deployment of this form on the website of National Financial Reporting Authority (NFRA).

• MCA has notified the Relaxation for additional fees and extension of last date infiling of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act, 2013- UT of J & K and UT of Ladakh.

On the basis of the representations received from various stakeholders stating that due to disturbances in internet services and the normal work was affected in the UT of J&K and UT of Ladakh and sought an extension of time for filing of financial statements for the financial year ended 31.03.2019. MCA has decided to extend the due date for filing of e-form AOC-4, AOC-4 (CFS) AOC-4 XBRL and e-form MGT-7 upto 31.01.2020, for companies having jurisdiction in the UT of J&K and UT of Ladakh without levy of additional fee.

• The Ministry of Corporate Affairs and Indian Institute of Corporate Affairs (IICA) have introduced a comprehensive online databank for all existing and aspiring Independent Directors.

This databank draws its origin from Companies (Appointment and Qualification) Rules, 2019. As per the rules, all existing Independent Directors need to empanel with this databank within 3 months of commencement of these rules. Simultaneously, acting as a facilitator and educator, the Ministry has provisioned for the capacity building of Independent Directors through an integrated Learning Management System (LMS) to deliver an interactive and engaging library of eLearning courses. The databank has many key features to offer such as Empanelment of professionals acting as Independent Directors, Empanelment of professionals with/without DIN who wish to serve as Independent Directors, Online courses offered through an integrated Learning Management System (LMS), Newsletter and knowledge resources for continued professional development and most important is the Profile sharing for corporate access for helping them appoint well-trained and informed Independent Director. The empanelment process is quick and simple and independent directors can choose the subscription plan of their choice. There are three different subscription plans available – 1 Year, 5 Years, and Lifetime. The fee for 1 Year plan is Rs. 5,000 + 18% GST (five thousand only + 18% GST). The fee plan for 5 Years and Lifetime will be notified later.

• MCA inexercise of the powers conferred by section 435 of the Companies Act, 2013 and with the concurrence of the Chief Justices of the High Court of Uttarakhand, Nainital and High Court of Jammu and Kashmir has designated the Courts as Special Courts.

For the purpose of providing speedy trial of offenses punishable with imprisonment of two years or more as per clause (a) of sub-section (2) of section 435 of the Act, Court of IV Additional District and Session Judge, Dehradun State of Uttarakhand and Principal Sessions Judge, Leh Union territory of Ladakh, respectively as the Special Courts. Further, for the purpose of providing speedy trial of other offenses as mentioned in clause (b) of sub-section (2) of section 435 of the Act, Court of II Additional Chief Judicial Magistrate, Dehradun State of Uttarakhand, Sub-Judge/Special Mobile Magistrates, Jammu and Srinagar Union territory of Jammu and Kashmir, Chief Judicial Magistrate, Leh-Union Territory of Ladakh respectively, as the Special Courts.

• MCA has granted relaxation of additional fees and extension of the last date of filing of CRA-4 (cost audit report) for FY 2018-19 under the Companies Act, 2013.

On the basis of the several representations received from various stakeholders for extension of the last date, MCA has decided that the last date of filing of CRA-4 (cost audit report) for all eligible companies for the Financial Year 2018-19, without payment of additional fee, has been further extended till 29.O2.2020. However, it may be noted that the said extension is given for the entire process starting from ‘preparation of Annexures to the Cost Audit Report’ to ‘submission of Cost Audit Report by the Cost Auditor to the Company’ and finally, filing of Cost Audit Report by the Company with the Central Government’.

Other Laws

 

IBBI

The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2019 which shall come into force on the date of their publication in the Official Gazette i.e. 27th November 2019.

The Insolvency and Bankruptcy Code, 2016 (Code) envisages corporate insolvency resolution process (CIRP) for reorganisation and insolvency resolution of corporate debtors. An insolvency professional conducts the CIRP and manages its operations during the CIRP. Keeping in view the responsibilities of the IPs and the importance of CIRP, the Code casts an obligation on the IBBI and the IPA to monitor performance of IPs, and to collect, maintain and disseminate information and records relating to insolvency process of corporate debtors. It also casts an obligation on IPs to forward/submit certain information and records relating to CIRP to the IPA and IBBI. In the interest of transparency and accountability in conduct of CIRPs and conduct of the IPs, and to facilitate the IBBI, the IPAs and the IPs to discharge of their statutory obligations, the Amendment Regulations require the IPs to file a set of Forms, covering the life cycle of a CIRP, online on an electronic platform hosted on the website of the IBBI.

The Union Cabinet approved the proposal to make amendments in the Insolvency and Bankruptcy Code, 2016, through the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019.

The amendments aim to remove certain difficulties being faced during insolvency resolution process to realise the objects of the code and to further ease of doing business. The Amendment Bill seeks to provide additional thresholds for Financial Creditors represented by an authorized representative due to large numbers in order to prevent frivolous triggering of the Corporate Insolvency Resolution Process (CIRP). Further, for ensuring that the substratum of the business of the corporate debtor is not lost, and it can continue as a going concern by clarifying that the licenses, permits, concessions, clearances, etc. cannot be terminated or suspended or not renewed during the moratorium period. Ring-fencing corporate debtor resolved under the IBC in favour of a successful resolution applicant from criminal proceedings against offences committed by previous management/promoters.

 

RBI

RBI announced to make the NEFT system available on a 24×7 basis from December 16, which means the stakeholders would be able to send and receive money anytime through the National Electronic Funds Transfer (NEFT) System on a 24×7 basis.

It has been decided that the NEFT shall be made available from December 16, 2019 with the first settlement taking place after 00:30 hours on December 16, 2019. The NEFT payment system so far is available for customers from 8 am to 7 pm on all working days, except the second and fourth Saturdays of the month. Further, NEFT transactions after usual banking hours of banks are expected to be automated transactions initiated using ‘Straight Through Processing (STP)’ modes by the banks. The existing discipline for crediting beneficiary’s account or returning the transaction (within 2 hours of settlement of the respective batch) to the originating bank will continue and Member banks will ensure the sending of positive confirmation messages (N10) for all NEFT credits. Member banks are also advised to initiate necessary action and ensure availability of all necessary infrastructural requirements at their end for providing seamless NEFT 24×7 facility to their customers. Banks may disseminate information on the extended timings for NEFT to all their customers.

RBI with the intent of furthering Digital Payments has decided for Waiver of Charges for all online National Electronic Funds Transfer (NEFT).

Transfer of money via NEFT 24×7 is effective from 16th December 2019 and shall be free of cost from Jan 1, 2020. From December 16, one can transfer money online using the National Electronic Funds Transfer (NEFT) route 24×7, i.e., any time of the day and any day of the week. The Reserve Bank of India stated earlier on in the month, that bank customers will be able to transfer funds through NEFT around the clock on all days including weekends and holidays from December 16. This ensures the availability of anytime electronic funds transfer. RBI now joins an elite club of countries having payment systems that enable round the clock funds transfer and settlement of any value. NEFT allows individuals, firms, corporates to transfer money from one bank branch account to another one anywhere in the country. Earlier, this facility could be availed only on working days between 8:00 Am and 7:00 PM. In order to give further impetus to digital retail payments, it has now been decided that member banks shall not levy any charges from their savings bank account holders for funds transfers done through NEFT system which is initiated online (viz. internet banking and/or mobile apps of the banks).

The Reserve Bank of India has reviewed all the 35 circulars appearing in Master circular on OLTAS,

In consultation with the office of Principal Chief Controller of Accounts, Central Board of Direct Taxes, based on its relevance in the present scenario, issuing authority etc. It has been decided to withdraw with immediate effect 31 circulars issued under the signature of RBI, however, the instructions issued by the office of Principal Chief Controller of Accounts, Central Board of Direct Taxes remain in force wherever applicable. Further, four circulars which will continue to remain operational under the signature of RBI w.r.t On-line Tax Accounting System (OLTAS) – Funds Settlement; Compulsory quoting of Permanent Account Number (PAN) / Tax Deduction Account Number (TAN) – State of Rajasthan; Cut-off time for e-payment transactions pertaining to Government Revenue & Improvement in data quality- Introduction of Computerised receipts w.e.f. June 1, 2008.

SEBI

SEBI in partial modification of the original circular has mandated Filing of Offer Documents under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

SEBI has decided that the draft offer documents in respect of issues of size up to Rs. 750 crores shall be filed with the concerned regional office of the Board under the jurisdiction of which the registered office of the issuer company falls. Accordingly, the Merchant Bankers are also advised to file the draft offer documents / offer documents with the concerned office of the Board, based on the estimated issue size as provided in the circular. The amendments made vide this circular shall come into effect for all draft offer documents for issues which are filed with SEBI on or after the date of issuance of this circular.

SEBI has allowed asset management companies (AMC) of mutual funds to provide management and advisory services to foreign portfolio investors

owned by central banks, sovereign wealth funds, international multilateral organisations, and other agencies including entities controlled or at least 75 percent owned by such Government. This apart, they can also provide asset management service to regulated entities such as pension funds, insurance or reinsurance entities, banks and mutual funds besides foreign portfolio investors where the regulated entities own over 50 percent of share. SEBI has given one-year exit time to AMCs which are already providing management and advisory services to such foreign portfolio investors are not falling under the above categories. The new norms will come into effect immediately. In September, the regulator had issued norms on classification for FPIs and simplified their registration process as part of ease of doing business in India.