Relief from MAT u/s 115JB with regard to adjustments made to book profit on account of Secondary Adjustment and APAs

Relief Provided

The Finance Act 2021 has introduce new sub-section (2D) of section 115JB to rationalize MAT provisions to consider the below situations in computing MAT liability:

• In case of income of past year is included in the books of accounts of the Assessee, on account of secondary adjustment made under Transfer Pricing on an application made by the Assessee to the AO in this behalf or as a result of APA, book profit shall be computed taking without into account such income;

Computation mechanism

CBDT vide Notification No. 92/2021 dated 09/08/2021 has introduced new Rule 10RB giving effect to the above provision.

As per Rule 10RB, MAT payable u/s 115JB by the company will be reduced by the relief calculated by below formula:

(A-B) – (D-C),

where,

A = tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of the previous year including the past income;

B = tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of the previous year after reducing the book profit with the past income;

C = Aggregate of tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of those past year or years to which the past income belongs;

D = Aggregate of tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of past year or years, referred to in item C, after increasing the book profit with the relevant past income of such year or years:

Provided that if the value of (A-B)-(D-C) in the formula is negative, its value shall be deemed to be zero.

Filing Mechanism

For availing relief under the said rule 10RB, CBDT has introduced Form 3CEEA which needs to be uploaded and signed / verified electronically at the IT portal.

Introduction of Taxation Laws (Amendment) Bill, 2021: Background

• The post 2012 scenario added fears of retrospective taxation to certain companies undergoing tax assessments on account of capital gains arising from transfer of shares of a foreign company. It is argued that such retrospective amendments militate against the principle of tax certainty and damage India’s reputation as an attractive destination.
• This was brought about as a reason of landmark verdict of the Hon’ble Supreme Court in 2012 in the matter of Vodafone International Holdings BV ([2012] 17 taxmann.com 202 (SC)), wherein it was held that such transfer of shares of a foreign company would not give rise to taxable capital gains.
• In the past few years, major reforms have been initiated in the financial and infrastructure sector which has created a positive environment for investment in the country. The country today stands at a juncture when quick recovery of the economy after the COVID-19 pandemic is the need of the hour and foreign investment has an important role to play in promoting faster economic growth and employment. Therefore, to attract the investment in India and to boost growth, this bill proposes to scrap a retrospective amendment.
• The bill has been passed by both houses of Parliament and now pending for Hon’ble President assent.

Brief Facts: The Vodafone Controversy

• In Vodafone International Holdings BV. case, Vodafone International Holdings (VIH), a Netherlands based Company procured 100% shares in CGP Investments (Holding) Ltd a company situated in Cayman Island, for USD 11.1 billion from Hutchison Telecommunications International Ltd in the year 2007. CGP, through different organizations and actions controlled 67% of Hutchison Essar Limited (HEL), an Indian Company. Vodafone got command over CGP and its downstream the subsidiaries including HEL through the acquisition.
• In 2007, the Tax authority issued a notice to Vodafone International Holdings (VIH) for not withholding tax in India. The said notice was challenged by Vodafone International Holdings (VIH) in the Bombay High Court however, the same was turned down citing [2010] 193 Taxman 100(Bombay).
• Thereafter, the matter was filed in the Hon’ble Apex court which held in the favor of Vodafone International Holdings (VIH) in view of the fact that the transfer of shares outside India does not amount to indirect transfer of any assets owned by the company in which the shares are so held. Accordingly, the Apex Court refused to lift the corporate veil of the foreign company holding shares in the Indian company.
• To overcome this ruling, the Government vide Finance Act, 2012 amended section 9(1) of the Income Tax Act (‘ITA’) by introducing the explanation 4 & 5 to tax the indirect transfer made of capital asset of a company having substantial value of asset in India.

There were a total seventeen cases which were under similar dispute and accordingly tax demands had been raised in these matters by the tax authority on similar lines.

Further, the dispute on account of two cases namely, Vodafone BV & Cairn Energy were referred to Arbitration Tribunal under Bilateral Investment Protection Treaty at the International Forum, which ruled in favor of the aforementioned taxpayers and against the Indian Income Tax Department.

Brief- The Taxation Laws (Amendment) Bill, 2021

In a bid to cover the phantom of review tax assessment, the tax authority on Thursday August 06, 2021, passed a Taxation Laws (Amendment) Bill, 2021 (“TLA Bill, 2021”) from the Lok Sabha to pull out all back tax requests on organizations, Cairn Energy and Vodafone and said it will refund the money gathered to authorize such levies (Without Interest).

The Bill accommodates the withdrawal of assessment request made on “Indirect Transfer of Indian resources if the exchange was executed before 28 May 2012 (i.e., the day the review tax enactment appeared).

Hence, after the existing 3^rd proviso to explanation 5 of section 9, additional three provisos i.e., proviso 4, 5 & 6 are proposed to be added to give effect of the new bill.

It is additionally proposed to refund the sum paid in these cases with no interest consequently u/s 244A of Income tax act. The Bill has an immediate bearing on long-running assessment questions with British firms Cairn Energy Plc and Vodafone Group.

Proposals in the Bill:

• Proposed new 4th proviso provides that nothing in Explanation 5 shall apply to—
• an assessment or reassessment to be made under section 143, section 144, section 147 or section 153A or section 153C
• an order to be passed enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154 o
• an order to be passed deeming a person to be an assessee in default under sub-section (1) of section 201.

in respect of income accruing or arising through or from the transfer of an asset or a capital asset situate in India in consequence of the transfer of a share or interest in a company or entity registered or incorporated outside India made before the 28th day of May, 2012.

Analysis: It means, no demand will be raised in Future in context of any indirect transfer made till 27.05.2021. As retrospective amendment by Finance Act 2012 was made to cover all the indirect transfer done between April 01, 1961 till the date of getting President assent i.e. 28 May 2021, So for giving the relief it is proposed in this proviso that no order or demand can be raised in future for any indirect capital transfer covered by the section 9(1)(i) for any pending proceedings.

Proposed new 5th proviso provides that:

Where

• an assessment or reassessment has been made under section 143, section 144, section 147 or section 153A or section 153C; or
• an order has been passed enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154; or
• an order has been passed deeming a person to be an assessee in default under sub-section (1) of section 201; or
• an order has been passed imposing a penalty under Chapter XXI or under section 221,

in respect of income accruing or arising through or from the transfer of an asset or a capital asset situate in India in consequence of the transfer of a share or interest in a company or entity registered or incorporated outside India made before the 28th day of May, 2012 and the person in whose case such assessment or reassessment or order has been passed or made, as the case may be, fulfils the ‘specified conditions’.

Analysis: It means, demand raised or order passed to the extent to any indirect transfer made till 27.05.2021 will be nullified. But this effect will be issued once the specified condition as mentioned below will be fulfilled.

• Further it is also proposed to new 6th proviso to Explanation 5 clarifies that
• where any amount becomes refundable to the person referred to in fifth proviso as a consequence of him fulfilling the ‘specified conditions’, then, such amount shall be refunded to him, but no interest under section 244A shall be paid on that amount.

Analysis: It means, any demand collected or refund adjusted, will be refunded.  But here it is pertinent to note that such refund will be without any interest i.e. without giving effect to section 244A.

Specified condition as used in aforesaid provisos 5 & 6 are reproduced as under:

• where the said person has filed any appeal before an appellate forum or any writ petition before the High Court or the Supreme Court against any order in respect of said income, he shall either withdraw or submit an undertaking to withdraw such appeal or writ petition, in such form and manner as may be prescribed;
• where the said person has initiated any proceeding for arbitration, conciliation or mediation, or has given any notice thereof under any law for the time being in force or under any agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise, he shall either withdraw or shall submit an undertaking to withdraw the claim, if any, in such proceedings or notice, in such form and manner as may be prescribed;
• the said person shall furnish an undertaking, in such form and manner as may be prescribed, waiving his right, whether direct or indirect, to seek or pursue any remedy or any claim in relation to the said income which may otherwise be available to him under any law for the time being in force, in equity, under any statute or under any agreement entered into by India with any country or territory outside India, whether for protection of investment or otherwise; and
• such other conditions as may be prescribed.”.

Analysis: As per the condition the assessee or said person needs to withdraw any appeal filed or submit the undertaking to withdraw any initiation made against the order whether filed in India or outside India. The manner, form or other conditions will be notified in future.

Further in this proposed bill, a consequential amendment in section 119 is proposed by adding proviso same to the specified conditions mentioned above.

Concluding remarks:

Bringing the amendment retrospectively, provides an interim and much needed relief to the ongoing litigations created on account of indirect transfers in the aforesaid matters. However, it needs to be understood that as the amendment is only retrospective, hence prospective taxation shall continue to be taxed in the similar manner. Accordingly, on one hand it aims to end specific retrospective controversies created by executive parliamentary powers but however on the other hand, it also creates a dilemma for foreign investors with respect to Indian tax laws, as to the fact that such positions might recur in the future. However, as of now it is a much needed and welcome step for the companies involved in retrospective tax disputes pertaining to indirect transfers.

KNM India can assist you with a range of complete financial services that range from Corporate advisory to Transaction advisory, Pre-incorporation to Post-incorporation, Insolvency and bankruptcy code to Secretarial services, Assurance to Internal audit services, along with Market entry strategy to Foreign company registration in India. To discuss any of these please book your slot, or call us on +91-99105-04170 – or email us at services@knmindia.com to get a quick response.

The article has been contributed by

CA Kavita Arora

Sr. Manager-Direct Tax

Further, we shall be happy to assist in case of any clarifications. For a deeper discussion, feel free to revert us at services@knmindia.com

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication

Executive Summary

Income Tax

• Manual filing of Form 15CA/CB further extended to 15^th August 2021.
• India Joined hands with OECD/G20 for Digital economy taxation in unified approach (Pillar I & Pillar II).
• Extension of time limits for processing of ITR validly filed upto AY 2017-18 till 30^th September 2021.

Guidelines issued considering difficulty in implementing the provision of Sec 194Q.

Goods & Services Tax (GST)

• Functionality to check and update status of bank account details updated on GST portal
• New functionality on Annual Aggregate Turnover deployed on GST Portal for tax payer’s dashboard
• Basic custom duty has been exempted on covid test kits and specified medicine products for specified period.

Clarification on applicability of Dynamic QR Code

Companies Act 2013/ Other Laws.

• MCA has issued a press release to highlight the various measures taken by the ministry to fight Covid-19 pandemic.
• SEBI has extended the timelines for compliance with the regulatory requirements by debenture trustees for the quarter/half-year/year ending March 31, 2021 by Debenture Trustees.
• DGFT extends Date for Mandatory Electronic Filing of Non-Preferential CoO through Common Digital Platform.

Detailed

Income tax

• CBDT vide Circular No.13/2021 dated 30^th June 2021 issued clarification/guidelines in compliance the provision of section 194Q. In the circular, CBDT has clarified the issues on threshold of TDS and application of TDS/TCS in case of dual applicability.
• CBDT vide Press release dated 02^nd Jul 2021 informs about joining of India in OECD/G20 discussion for consensus on Base erosion and profit shifting Digital economy taxation(Pillar I & Pillar II approach) Pillar I which is  about  reallocation of additional share of profit to the market jurisdictions and Pillar II consisting of minimum tax and subject to tax rules.
• CBDT vide Press release dated 05^th Jul 2021 further extends the manual filing of 15CA/CB considering the bugs/error on new Income Tax website till 15^th July 2021. By Press release dated 20^th Jul 2021, manually filing is further extended till 15^th August, 2021.
• CBDT vide ORDER F. NO.225/98/2020IITA-II, Dated 05^th July 2021 has further extended the dates for the processing of validly filed ITR upto AY 2017-19, considering the pending taxpayers’ grievances related to issue of refund and to mitigate genuine hardship being faced by the taxpayers these time limits, till 30^th September 2021 through order u/s 119 of IT Act, 1961.
• CBDT vide Notification No. 77/2021 dated 07^th July 2021 has makes rule 8AC for of short-term capital gains and written down value under section 50 where depreciation on goodwill has been obtained.

Goods & Services Tax

• CBDT vide Notification No. 28/2021 – Central tax dated 30^th June 2021 waives penalty payable for non-compliance of provisions of notification no. 14/2020 dated 21^st March, 2020 for certain class of registered persons capturing dynamic QR code and the implementation of QR code to be further extended to 30^th September 2021.
• GST portal has issued functionality to check and update status of bank account details dated 29^th June 2021 for the taxpayers who have taken new registration at GST Portal but have not yet furnished the same, has been introduced. Such taxpayers are required to update their Bank Account Details within 45 days through Non-core amendment in the manner as specified of the first login henceforth.
• GST portal has issued New functionality on Annual Aggregate Turnover (AATO) dated 27^th June 2021 deployed on GST Portal for tax payer’s dashboard with the facility of turnover update.
• CBIC vide Circular 157/13/2021 – GST dated 20^th July 2021 issue clarifications regarding the extension of timelines granted by Hon’ble Supreme Court vide its Order dated 27.04.2021 is applicable in respect of any appeal which is required to be filed before Joint/ Additional Commissioner (Appeals), Commissioner (Appeals), Appellate Authority for Advance Ruling, Tribunal and various courts against any quasi-judicial order or where proceeding for revision or rectification of any order is required to be undertaken, and is not applicable to any other proceedings under GST Laws
• CBIC vide Notification no. 35/2021- customs dated 12^th July 2021 exempt basic customs duty on various imports of specified API/ excipients for Amphotericin B and raw materials for manufacturing COVID test kits, till specified period.
• CBIC vide Circular no. 17/2021- customs dated 23rd July, 2021 specify to focus its efforts to reduce compliance burden for citizens and business activities. Various procedures and requirements stated under various provisions in the Customs Act,1962 are being revisited so that compliances under these laws can be simplified or dispensed with, in order to enhance ease of doing business and minimize regulatory compliances.
• CBIC vide Circular no. 16/2021- customs dated 19^th July, 2021 issues clarification on issue of applicability of IGST on repair cost, insurance and freight, on goods re-imported after being exported for repairs on the recommendation of the GST council made in its 43^rd
• CBIC vide Circular no. 15/2021- customs dated 15^th July, 2021 prescribe manner for implementation of Risk Management system for processing of Duty drawback claims in exports.
• CBIC vide Circular no. 14/2021- customs dated 07^th July, 2021 has decided to implement various measures in custom for Faceless Assessment and clearance process to enhance the uniformity in assessments with a view to reduce interface with the trade.
• CBIC vide Circular no. 13/2021- customs dated 01^st July, 2021 in relation to AEO (Authorized Economic operator) T1 decide to launch a new version (V 2.0) for on-boarding of AEO T2 and AEO T3 applicants by way of online filing, real- time monitoring and digital certification.
• CBIC vide Circular no. 12/2021- customs dated 30^th June, 2021 guide the trades relating to procedures for smooth implementation of Sea Cargo Manifest and Transhipment Regulations.
• CBIC vide Notification no. 34/2021 – (Customs ADD) dated 28^th June 2021 Seeks to further amend notification No. 29/2017-Customs (ADD) dated 14th June, 2017 ‘Glazed/Unglazed Porcelain/Vitrified tiles’ originating in or exported from China PR, up to and inclusive of 31st December, 2021.

• CBIC vide Notification no. 35/2021 – (Customs ADD) dated 29th June 2021 Seeks to further amend notification No. 11/2016-Customs (ADD) dated 29th March, 2016 ‘Tyre Curing Presses also known as Tyre Vulcanisers or Rubber Processing Machineries for tyres, excluding Six Day Light Curing Press for curing bi-cycle tyres originating in or exported from China PR, up to and inclusive of 30th November, 2021.

• CBIC vide Notification no. 36/2021 – (Customs ADD) dated 29th June 2021 Seeks to further amend notification No. 17/2017-Customs (ADD) dated 11th May, 2017 Hot-Rolled flat products of alloy or non-alloy steel’ originating in or exported from China PR, Japan, Korea RP, Russia, Brazil or Indonesia, up to and inclusive of 15th December, 2021.
• CBIC vide Notification no. 37/2021 – (Customs ADD) dated 29th June 2021 Seeks to further amend notification No. 18/2017-Customs (ADD) dated 12th May, 2017 ‘Cold-Rolled flat products of alloy or non-alloy steel’ originating in or exported from China PR, Japan, Korea RP or Ukraine, up to and inclusive of 15th December, 2021.
• CBIC vide Notification no. 38/2021 – (Customs ADD) dated 30th June 2021 Seeks to further amend notification No. 42/2016-Customs (ADD) dated 08th August, 2016 PVC Flex Film originating in or exported from China PR, up to and inclusive of 31st January, 2022.

• CBIC vide Notification no. 39/2021 – (Customs ADD) dated 30th June 2021 Seeks to further amend notification No. 43/2016-Customs (ADD) dated 08th August, 2016 relating to Viscose Staple Fibre (VSF) excluding Bamboo Fibre, Dyed Fibre, Modal Fibre & Fire-retardant Fibre originating in or exported from China PR and Indonesia.

• CBIC vide Notification no. 40/2021 – (Customs ADD) dated 30^th June 2021 Seeks to further amend notification No. 34/2016-Customs (ADD) dated 14th July, 2016 ‘Plain Medium Density Fibre Board (MDF) having thickness of 6mm and above’ originating in or exported from Vietnam, up to and inclusive of 13th March, 2022.
• CBIC vide Instruction no. 15/2021- customs dated 30^th June 2021 specify requirement of report of testing of Covid-19 in live animals by the exporters not more than 3 days old before export into India in addition to other existing requirements in this regard.

Companies Act, 2013

• MCA has issued a press release to highlight the various measures taken by the ministry to fight Covid-19 pandemic.
• The illustrative list issued by MCA has 23 entries and covers almost all benefits and relaxations extended due to Covid-19 pandemic, which includes the Companies Fresh Start Scheme, 2020 (CFSS), LLP Settlement Scheme, 2020, relaxation on levy of additional fees for companies / LLPs in filing Charge Related Forms, Condonation of Delay Scheme for Companies restored by NCLT between December 1, 2020 to December 31, 2020, conduct Board Meetings through Video Conference (VC) or other audio-visual means for passing resolutions in respect of the restricted matters, conduct of Extraordinary General Meetings (EGMs) through Video Conferencing (VC), conduct of Annual General Meetings (AGMs) by Video Conferencing (VC),  Extension of time in the holding of Annual General Meeting for the financial year ended on March 31, 2020 till December 31, 2020,  enhanced the period to thirteen months from December 1, 2019 within which existing Independent directors may apply online for inclusion of their names in the databank for Independent Directors, Independent Directors (IDs) of a company have been given relaxation from holding at least one mandatory meeting, mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA-13) (120 days) were extended by a period of 60 days, Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the Act shall not be treated as a non-compliance for the financial year 2019-20 and 2020-21

Other Laws

• SEBI has extended the timelines for compliance with the regulatory requirements by debenture trustees for the quarter/half-year/year ending March 31, 2021 by Debenture Trustees.

The extended timelines for compliance include submission of Asset Cover Certificate, a statement of the value of pledged securities and a statement of value for Debt Service Reserve Account (DSRA) or any other form of security offered – August 31, 2021; Net worth certificate of guarantor (secured by way of personal guarantee), Financials/ value of guarantor prepared on basis of audited financial statement etc. of the guarantor (secured by way of corporate guarantee) and Valuation report and title search report for the immovable/ movable assets, as applicable – October 31, 2021 and Disclosure on the website of Monitoring of asset cover certificate and quarterly compliance report of the listed entity, Monitoring of utilization certificate, Status of information regarding breach of covenants/ terms of the issue, if any action was taken by debenture trustee and Status regarding maintenance of accounts maintained under the supervision of debenture trustee – August 31, 2021.

• SEBI has issued a circular to notify that the block mechanism in the Demat account of clients undertaking sale transactions would be available from 1st August 2021.

A facility of block mechanism in the Demat account of clients has been made available by the depositories. The securities lying in the client’s Demat account may be blocked in favour of Clearing Corporation either by the client himself using depository’s online system or eDIS mandate or through depository participant based on physical DIS given by client or Power of Attorney (POA) holder. In case the sale transaction is not executed, shares will continue to remain in the client’s demat account and will be unblocked at the end of the T (Trade) day. Blocking of shares will be on ‘time bases. If securities for sale are blocked in the depository system in favour of Clearing Corporation, all margins would be deemed to have been collected and penalty for short/non-collection of margins including other margins shall not arise. Further, the proposed facility of block mechanism is on an optional basis and the EPI mechanism will also continue.

• SEBI has issued a circular to introduce expected loss-based rating scale for rating agencies and standardization of rating scale used by credit rating agencies for ratings of projects/ instruments associated with the infrastructure sector.

All the Credit rating agencies will now be required to provide expected loss-based ratings for projects and instruments associated with the infrastructure sector, with SEBI putting in place a new framework. The new scale will be used by the credit rating agencies for ratings of projects or instruments associated with the infrastructure sector to begin with. Lowest expected loss, very low expected loss, low expected loss, moderate expected loss, high expected loss, very high expected loss and highest expected loss will be the seven levels on the new scale. Further for the existing outstanding ratings, the CRAs shall disclose new rating symbols and definitions on their websites; update their rating lists on their websites; and inform their clients about the change in the rating symbols and definitions and specify that this should not be construed as a change in the ratings. All the provisions in the latest circular except those pertaining to standardization of rating scales, will be applicable with “immediate effect” for Credit Rating Agencies (CRAs). The CRAs shall ensure compliance with the requirements of this circular, latest by March 31, 2022 and also place the compliance status of this circular before their Board of Directors.

• SEBI has come out with a new framework with regard to the valuation of securities, having multiple put options, held by mutual funds.

The new framework will be applicable with effect from October 1, 2021. In respect of valuation of securities with multiple put options present “ab-initio”, wherein put option is factored into the valuation of the security by the valuation agency, SEBI has taken certain decisions based on the recommendation of its mutual fund advisory committee. Under the framework, if the put option is not exercised by a mutual fund while exercising the put option would have been in favor of the scheme, fund houses will have to give justification for not exercising such option to the valuation agencies, board of AMC and Trustees. The explanation must be given on or before the last date of the notice period. The valuation agencies will not take into account the remaining put options for the purpose of valuation of the security. The put option will be considered as ‘in favor of the scheme’ if the yield of the valuation price ignoring the put option under evaluation is more than the contractual yield or coupon rate by 30 basis points.

• SEBI has released the Discussion Paper for Review of SEBI (Share Based Employee Benefit) Regulations, 2014 and SEBI (Issue of Sweat Equity) Regulations, 2002.

Through this discussion paper, SEBI has suggested combining two separate regulations, SEBI (Share Based Employee Benefits) Regulations, 2014, and SEBI (Issue of Sweat Equity) Regulations, 2002, that deal with employee compensation. It is recommended that the objectives for which issuance of sweat equity shares are permitted and the ceiling on the quantum issued by a company should be included in the sweat equity regulations. It also recommended that the lock-in period for sweat equity shares and its pricing formula should be consistent with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The committee recommended that even non-permanent employees be considered to receive share-based employee benefits falling under SBEB Regulations. Further, through these draft Regulations SEBI has recognised the Secretarial Auditor to certify that the scheme(s) has been implemented in accordance with these regulations and in accordance with the resolution of the company in the general meeting as per Regulation 13 and under Regulation 26(2) to certify compliance with this provision at the time of adoption of such balance sheet by the Company. Public comments are invited on the recommendations made by the Expert Group in its report, in the prescribed format.

• SEBI has issued a standard operating procedure for subsidiary companies planning to get delisted through a ‘Scheme of Arrangement’ wherein the listed holding companies and the listed subsidiaries are in the same line of business.

According to a circular, the ‘same line of business’, is defined as when least 50 per cent of revenue from the operations of the listed holding and listed subsidiary company must come from the same line of business, In addition, at least 50% of the net tangible assets of the listed holding company and the listed subsidiary must be invested in the same line of business. Further, the principal economic activities of both firms need to be under the same group as per the National Industrial Classification (NIC) Code. In case of change of name of the listed entities within the last one year, at least 50 per cent of the revenue, calculated on a restated and consolidated basis, for the preceding one full year has to be earned by it from the activity indicated by its new name. The listed holding company and the listed subsidiary have to provide self-certification with respect to both the companies being in the same line of business. Further, these need to be certified by the Statutory Auditor and Merchant Banker. To be eligible for the exemption under the route, shares of both companies should be listed for at least three years and the trading thereof should not have been suspended immediately before approval of the scheme by the Board of Directors of the companies.

• SEBI has issued a circular to reduces the time period for submitting an application to obtain NOC for release of 1% of the issued amount.

The time period for processing of NOC applications is also reduced to 2 months from the existing period of 4 months after listing for submitting the application. As per its earlier guidelines, the issuer company is required to submit an application on its letterhead addressed to SEBI in the specified format specified, after the lapse of 4 months from listing on the Exchange, which was the last to permit listing, for the purpose of obtaining the NOC. However, the time period of 4 months has now been reduced to 2 months. Further, the merchant banker shall submit a certificate confirming that all the SCSBs involved in the ASBA process have unblocked ASBA accounts. SEBI shall consider the application as incomplete if the application is not accompanied by a confirmation by merchant banker that all the accounts in ASBA have been ‘unblocked’.

RBI

• The Reserve Bank of India (RBI) has extended the last date for filing the Annual Return of Foreign Liabilities and Assets (FLA) to 31st July, 2021.

The Annual Return on Foreign Liabilities and Assets are required to be filed by an Indian Company and LLP to RBI within the prescribed due date. This Return is filed Online on RBI Portal. The portal on which you can file the return is https://flair.rbi.org.in/fla/. Generally, the filing of the FLA annual return has to be done before the 15 of July of the respective year and must include data of FDI or ODI received or made by the company for the previous year or current financial year. Entities that 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 afterward they can file an FLA return. However, the entities which have already registered earlier may submit FLA 2021 using their earlier login credentials. The Companies which have received FDI and/or made FDI abroad in any of the financial year are required to submit FLA Return to RBI. The Financial Statement of the company for such a particular FY can exactly explain the status of Inward FDI or Outward FDI.

• RBI has issued Instructions on Interest on overdue domestic deposits. 

RBI has instructed all banks that all unclaimed maturity proceeds of Term Deposits (TDs) with banks will attract the rate of interest as applicable to savings accounts or the contracted rate of interest on the matured TD, whichever is lower. This directive comes in the backdrop of Savings Bank (SB) rates (on deposits above ₹1 lakh) of some of the small finance banks being higher than the TD rates in the less than one-year and above five years maturity buckets. Earlier, the rule on overdue domestic deposits stated that if a Term Deposit matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings deposits. The amendment comes as unclaimed deposits with banks have been growing every year.

IBBI

• IBBI has specified the format of CIRP 8 under IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which needs to be filed in respect of every CIRP ongoing or commencing on or after July 14, 2021.

Regulation 35A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) requires the Resolution Professional to form an opinion on transactions covered under sections 43, 45, 50 and 66 by 75 day, make a determination on such transactions by 115 day, and file an application before the Adjudicating Authority by the 135 day of the insolvency commencement date. Further regulation 40B(IB) of the CIRP Regulations require the resolution professional to file Form CIRP 8 intimating details of his opinion and determination under Regulation 35A, by 140 day of the insolvency commencement date. For effective monitoring, the amendment requires the RP to file Form CIRP 8 on the electronic platform of the Board, intimating details of his opinion and determination in respect of avoidance transactions.

• IBBI has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2021 to further amend the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

Through this amendment, a new Regulation 4B has been inserted which deals with disclosure of change in name and address of the Corporate Debtor. Where a corporate debtor has changed its name or registered office address during the period of two years preceding the insolvency commencement date, the Interim Resolution Professional or Resolution Professional, as the case may be, shall disclose all the former name(s) and registered office address(es) so changed along with the current name and registered office address in every communication, record, proceeding or any other document. Further under Regulation 27 the resolution professional shall, within seven days of his appointment but not later than forty-seventh day from the insolvency commencement date, appoint two registered valuers to determine the fair value and the liquidation value of the corporate debtor in accordance with Regulation 35.

• The IBBI has issued the has issued Information Brochure on Pre-Packaged Insolvency Resolution Process (PPIRP) for Micro, Small, and Medium Enterprises (MSMEs).

The PPIRP is required to be completed within a period of 120 days from its commencement date. The RP shall either file the resolution plan for approval or an application for termination of PPIRP, with the AA within 90 days from the PPIRP commencement date. A model timeline along with the activities to be undertaken and responsibilities of Resolution Professionals, creditors, and corporate debtors are provided in the brochure. It is designed for the sole purpose of creating awareness on the subject and must not be used as a guide for taking or recommending any action or decision, commercial or otherwise. The released brochure presents step-by-step activities from initiation till the closure of PPIRP. It annexes: (i) a typical process flow of a PPIRP (Annexure A); (ii) an indicative list of responsibilities of the CD, the RP, and the creditors in respect of a PPIRP (Annexure B); (iii) a model timeline for completion of PPIRP within the prescribed period of 120 days from the date of its commencement (Annexure C); and (iv) a list of Forms (Annexure D).

DGFT

• DGFT extends Date for Mandatory Electronic Filing of Non-Preferential CoO through Common Digital Platform.

The DGFT has issued notice to provide that the option of submission and issuance of CoO (Non-Preferential) by the issuing agencies through their paper-based systems may continue further up to 30th September 2021. However, the mandatory electronic filing of the Non-Preferential Certificate of Origin (CoO) shall be from October 1, 2021. The objective of this platform is to provide an electronic, contact-less single window for the CoO related processes. However, on the request of certain Chambers/Associations, the existing system of submitting and processing non-preferential CoO applications in manual/paper mode is being allowed for the time being and the online system is not being made mandatory. All Agencies as notified under Appendix-2E are required to ensure the onboarding exercise is completed latest by September 30, 2021.

• The Directorate General of Foreign Trade has revised para 2.96 from the Handbook of procedures 2015-2020 which deals with intimation regarding a change in the constitution of business of RCMC holders.

Accordingly, clause 2.96(b) w.r.t the Export shall furnish quarterly return /details of his exports of different commodities to the concerned registering authority has been deleted. However, status holders shall also send quarterly returns to FIEO in the format specified by FIEO. Further, the format of ANF-2C of foreign trade policy 2015-2020 mandating submission of monthly return of export including NIL return to the registering authority by 15^th of the month following the quarter deleted.

• DGFT has granted Extension in period of modification of IEC till 31.07.2021 and waiver of fees for IEC updation during July, 2021.

An IEC holder has to ensure that details in its IEC are updated electronically every year, during the April – June period. However, for the current year only, this period is extended by another month i.e., till 31st July, 2021. In cases where there are no changes in IEC details the same also needs to be confirmed online. Further, fee to be charged for modification of IEC done during the month of July, 2021 will remain ‘Nil”. Period of modification of IEC is extended for the year 2021-22 only till 31.07.2021, and no fee shall be charged on modifications carried out in IEC during the period upto 31st July, 2021.

MSME

• The Minister of Micro, Small and Medium Enterprise (MSME) has announced revised guidelines for MSMEs with inclusion of retail and wholesale trades as MSMEs.

With the revised guidelines the retail and wholesale trades will now be allowed to register on the Udyam Registration Portal. The Enterprises having Udyog Aadhaar Memorandum (UAM) under above three NIC Codes are now allowed to migrate to Udyam Registration Portal or they can file Udyam Registration afresh. The existing definition of MSMEs includes manufacturing and service enterprises whereas retail and wholesale trade were not classified under the same. However, benefits to Retail and Wholesale trade MSMEs are to be restricted to Priority Sector Lending only. Accordingly, the list of eligible additional activities under NIC Code 45- Wholesale and retail trade and repair of motor vehicle and motorcycles, NIC Code 46 – Wholesale trade except of motor vehicles and motor cycles and NIC Code 47 – Retail Trade Except of Motor Vehicles and motorcycles. Consequent upon above changes, para 2 including Table. 2 mentioned in O.M. no 5/2(1)/2020/E-P&G/Policy dated 01.12.2020, stands omitted.

View Monthly Compliance Calendar

KNM India can assist you with a range of complete financial services that range from Corporate advisory to Transaction advisory, Pre-incorporation to Post-incorporation, Insolvency and bankruptcy code to Secretarial services, Assurance to Internal audit services, along with Market entry strategy to Foreign company registration in India. To discuss about any of these please book your slot, or call us on +91-99105-04170 – or email us at services@knmindia.com to get a quick response.

As per the provisions mentioned in Income-tax Act, 1961, there is a requirement to furnish Form 15CA/15CB electronically. In the existing system on old Income Tax portal, taxpayers upload the Form 15CA, along with the Chartered Accountant Certificate in Form 15CB, wherever applicable, before submitting the copy to the authorised dealer for any foreign remittance.

Recently on 7^th June 2021, CBDT has launched new Income Tax portal. Considering the difficulties facing by the taxpayer of procedure & DSC issue, CBDT by Press release dated 14^th June 2021, has defer the uploading of online 15CA/CB on Income Tax Portal till 30^th June 2021.

Now by Press release Dated 05^th July 2021, CBDT has further extended the aforesaid date to 15^th July 2021. In view thereof, taxpayers can now submit the said Forms in manual format to the authorized dealers till 15th July, 2021. On other side, Authorized dealers are advised to accept such Forms till 15th July, 2021 for the purpose of foreign remittances.

A facility will be provided on the new e-filing portal to upload these forms at a later date for the purpose of generation of the Document Identification Number.

KNM India can assist you with a range of complete financial services that range from Corporate advisory to Transaction advisory, Pre-incorporation to Post-incorporation, Insolvency and bankruptcy code to Secretarial services, Assurance to Internal audit services, along with Market entry strategy to Foreign company registration in India. To discuss any of these please book your slot, or call us on +91-99105-04170 – or email us at services@knmindia.com to get a quick response.

The article has been contributed by:

CA Kavita Arora

Sr. Manager-Direct Tax

Further, we shall be happy to assist in case of any clarifications. For a deeper discussion, feel free to revert us at services@knmindia.com

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication.

Under section 143(1) of Income Tax Act, 1961, an intimation for adjustment of refund/demand needs to be send within 9 months from the end of the financial year in which the return is made. Earlier this timeline was 12 months from the end of the financial year in which the return is made.

However, due to some technical issues or other reasons, of course not attributed to taxpayers several Income Tax returns up to the AY 2017-18 were not processed and consequently Intimations of the same were not sent to taxpayers. This has led to a situation where the taxpayer is unable to get his legitimate refund in accordance with provisions of the Act, although the delay is not attributable to him.

As per the earlier order dated 10^th July 2020, time frame was given till 31^st October 2020 to process such returns with refund claims but considering the pending taxpayers’ grievances related to issue of refund and to mitigate genuine hardship being faced by the taxpayers these time limits are further extended till 30^th September 2021 through order u/s 119 of IT Act, 1961.

The relaxation accorded above shall not be applicable to the following returns:

(a) returns selected in scrutiny.

(b) returns remain unprocessed, where either demand is shown as payable in the return or is likely to arise after processing it.

(c) returns remain unprocessed for any reason attributable to the assessee.

To ensure adequate safeguards, it has been decided that once administrative approval is accorded by the Pr. CCIT/CCIT, the Pr. CIT/CIT concerned would make a reference to the DGIT(Systems) to provide necessary enablement to the Assessing officer on a case-to-case basis.

KNM India can assist you with a range of complete financial services that range from Corporate advisory to Transaction advisory, Pre-incorporation to Post-incorporation, Insolvency and bankruptcy code to Secretarial services, Assurance to Internal audit services, along with Market entry strategy to Foreign company registration in India. To discuss any of these please book your slot, or call us on +91-99105-04170 – or email us at services@knmindia.com to get a quick response.

The article has been contributed by:

CA Kavita Arora

Sr. Manager-Direct Tax

Further, we shall be happy to assist in case of any clarifications. For a deeper discussion, feel free to revert us at services@knmindia.com

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication.

EXECUTIVE SUMMARY

Income Tax

CBDT has come out with the following amendments as below: –

• Launching of New Income Tax Website.
• Compliance check Functionality for ease the usance of section 206AB/CCA.
• Extension of time limits of certain compliances to provide relief to taxpayers.
• Issuance of Cost Inflation Index for FY 2021-22.

GST

CBIC has come out with the following amendments as below: –

• GST notifications issued on June 1st 2021 to provide effect of 43rd GST council meeting
• GST rates reduced on Goods on specific items prescribed in 44th GST council meeting held on June 12th 2021
• Clarification on applicability of Dynamic QR Code

Companies Act 2013/ Other Laws

MCA has come out with the following amendments as below:

• MCA has issued the much-awaited clarification for passing general and special resolutions and convening an EGM in unavoidable circumstances and extended the validity of the existing circulars up to December 31, 2021, in light of the current social distancing norms.
• All companies are free to discuss and approve the matters related to the approval of the annual financial statements; the approval of the Board’s report; the approval of the prospectus; the Audit Committee Meetings for consideration of financial statement including consolidated financial statement if any;

To know in detail please continue reading…

• CBDT vide Press release dated 5^th June 2021 informed for launching of new Income tax website incometax.gov.in on 07^th June 2021 with an aim to providing better interface, free ITR preparation utility in some cases, new & functionalities and also for quick refunds etc.

• CBDT vide Notification No. 71/2021 / No. 370142/19/2021-TPL dated 8^th June 2021 amend the rule 31A (4) to comply with clauses amended according to 194A, 196D and 194Q. In addition to Appendix II has been changed in form 26Q to give effect to TDS sections.

• CBDT vide Circular F.NO.225/61/2021/ITA-I dated 10^th June 2021 has issued parameters for compulsory selection of returns for Complete Scrutiny during Financial Year 2021-22 and conduct of assessment proceedings.

• CBDT vide Press release dated 14^th June 2021 has informed that until fixation of bugs/error on new Income Tax website taxpayer can prepare 15CA/CB manually. This notification is applicable till 30^th June 2021. A facility will be provided on the new e-filing portal to upload these forms at a later date for the purpose of generation of the Document Identification Number.

• CBDT vide Notification No. 73/2021 / NO. 370142 / 10 / 2021-TPL dated 15^th June 2021 has issued Cost inflation index (CII-317) for the financial year 2021-22 and is applicable from AY 2022-23.

• CBDT vide Circular No.11/2021[F.NO. 370133/7/2021-TPL] dated 21^th June 2021 has issued circular regarding use of functionality u/s 206AB/CCA. For more details, please click the link: https://knmindia.com/tds-tcs-on-goods-along-with-deduction-collection-at-higher-rates-a-deep-insight/.

• CBDT vide Press release dated 23^rd June 2021 has informed about approves agreement between India and Saint Vincent and grenadines for exchange of information and assistance in collection with respect to taxes.

• CBDT vide circular No. 12 of 2021 dated 25th June 2021 has issued clarification that income-tax exemption will be given to the amount received by a taxpayer for medical treatment from employer or from any person for treatment of Covid-19 during FY 2019-20 and subsequent years. It has been decided to provide income-tax exemption to ex-gratia payment received by family members of a person from the employer of such person or from other person on the death of the person on account of Covid-19 during FY 2019-20 and subsequent years. The exemption shall be allowed without any limit for the amount received from the employer and the exemption shall be limited to Rs. 10 lakh in aggregate for the amount received from any other persons.

Further due to covid-19 provide various relaxations through extension of time limits of certain compliances to provide relief to taxpayers as below:

• CBDT vide Notification No. 74/2021/ F. No. 370142/35/2020-TPL dated 25th June 2021 & 75/2021/ No.IT(A)/01/2020-TPL Dated 25^th June,2021 has decided to extend the various dates as below:

For GST notifications dated 01^st June 2021 for Relaxations and effect to GST council notifications please refer the below link (https://knmindia.com/relaxations-by-gst-council/)

• The GST council in its 44th meeting held on 12th June, 2021 recommended reduction in GST rates on goods on specific items being used in COVID -19 relief and management. (Link /https://knmindia.com/relaxations-by-gst-council/)

• CBDT vide Circular No. 156/12/2021 – GST dated 21^st June 2021 issue various clarifications in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices and compliance of notification 14/2020- Central Tax dated 21st March, 2020 as below:
• Dynamic QR Code is to be provided on an invoice issued to an Unique Identity Number holder.
• Bank account and IFSC details need not to be provided separately in the Dynamic QR Code along with UPI ID.
• where the payment is collected by some person other than the supplier (E-Commerce Operator or any other person authorized by the supplier on his/ her behalf) then in such cases UPI ID of such person who is authorized to collect the payment on behalf of the supplier, may be provided.
• Wherever an invoice is issued to a recipient located outside India, for supply of services where place of supply is in India and the payment is received by the supplier in foreign currency, through RBI approved mediums, then such invoice may be issued without having a Dynamic QR Code.
• In some instances, it may not possible for the supplier to provide details of invoice number in the dynamic QR code displayed to the customer on payment counter where payment received before generation of invoice then cross reference of such payment received along with unique order ID/ sales reference number to be provided on the invoice.
• When the part-payment for any supply has already been received from the customer/ recipient, in form of either advance or adjustment through voucher/ discount coupon etc. then the dynamic QR code may provide only the remaining amount payable by the customer/ recipient against “invoice value”. However, the total invoice value should be mentioned on invoice showing advance adjustment.

• CBIC vide Notification no. 34/2021- customs dated 29^th June 2021 seeks to reduce the basic custom duty on Crude Palm Oil [1511 10] and Palm Oil other than Crude Palm Oil [1511 90] till 30th September 2021.

• CBIC vide Notification no. 33/2021- customs dated 14^th June 2021 Seeks to rescind notification No. 30/2021-Customs, dated 01.05.2021 relating to reduce IGST on Oxygen Concentrators when imported for personal use.

• CBIC vide Notification no. 32/2021 – (Customs ADD ) dated 03rd June 2021 Seeks to further amend notification No. 23/2016-Customs (ADD) dated 6th June, 2016 extend the levy of Anti-Dumping duty on Polytetrafluoroethylene originating in or exported from Russia, up to and inclusive of 31st October, 2021.

• CBIC vide Notification no. 33/2021 – (Customs ADD ) dated 03^rd June 2021 Seeks to further amend notification No. 6/2016-Customs (ADD) dated 8th March, 2016 to extend the levy of Anti-Dumping duty on Phenol originating in or exported from European Union and Singapore, up to and inclusive of 31st October, 2021.

• MCA has issued the much-awaited clarification for passing general and special resolutions and convening an EGM in unavoidable circumstances and extended the validity of the existing circulars up to December 31, 2021, in light of the current social distancing norms

The MCA has earlier issued General Circular no 14/2020 (first circular) and 17/2020 (second circular) dated 13th April 2020 for providing relaxations and clarifying various difficulties in following the first circular. The circular details guidelines for conducting an EGM for companies that need to provide e-voting facility or have opted for e-voting as per section 108 of the Companies Act, 2013, every listed company and company not having less than 1000 shareholders must mandatorily provide e-voting facility and for companies that do not need to provide e-voting facilities. All other requirement and conditions provided in the said circulars shall remain unchanged.

• MCA has notified the Companies (Accounting Standards) Rules, 2021 which shall come into force on the date of their publication in the Official Gazette i.e 23-06-2021.

Through these Rules, MCA has notified the Accounting Standards for small and medium companies that revise the turnover and borrowing limits as well as help in making disclosure requirements less onerous. The definition of Small and Medium-Sized Companies (SMCs) under the standards has been revised and accordingly turnover limit has been increased from Rs 50 crore to not exceeding Rs 250 crore and with enhanced borrowing limits. This is in addition to the requirements that such entities should be unlisted companies, which are not banks, financial institutions, or insurance companies. The Accounting Standards 1 to 5, 7, and 9 to 29 as recommended by the Institute of Chartered Accountants of India shall be applicable on SMC and shall come into effect in respect of accounting periods commencing on or after 01-04-2021. Every company, other than companies on which Indian Accounting Standards as notified under Companies (Indian Accounting Standards) Rules, 2015 are applicable, and its auditor(s) shall comply with the Accounting Standards at the time of preparation of Financial Statements. Further, an existing Company which has subsequently become SMC can only claim the benefits of SMC under these Rules after two years.

• MCA has notified the Companies (Creation and Maintenance of Databank of Independent Directors) Amendment Rules, 2021,

Which shall come into force on the date of their publication in the Official Gazette i.e. 18-06-2021. The MCA has notified the much-awaited amendment and eased the requirement for aspiring as well as serving independent directors on the board of companies to get their names included in an official database of eligible professionals. As per a rule change notified by the ministry on Friday, in spite of any delay, a professional could get her name empaneled in the official database of independent directors maintained by the Indian Institute of Corporate Affairs (IICA) by paying ₹1,000/-. This is expected to give relief to those who have missed their deadline. Aspiring independent directors were expected to get their names included in the database before they took up the assignment while serving ones had time till last October as per an earlier instruction.

• MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2021,

Which shall come into force on the date of their publication in the Official Gazette i.e. 18-06-2021.  To enable users of financial statements to understand the effect of interest rate benchmark reform on an entity‘s financial instruments and risk management strategy, an entity shall disclose information about the nature and extent of risks to which the entity is exposed arising from financial instruments subject to interest rate benchmark reform, and how the entity manages these risks; and the entity‘s progress in completing the transition to alternative benchmark rates, and how the entity is managing the transition. Among others, there are changes in the basis for determining the contractual cash flows as a result of interest rate benchmark reform. The disclosures will enable users of financial statements to understand the effect of these changes, including an entity’s progress in completing the transition to alternative benchmark rates. Further, the amendments to Ind ASs are in terms of insertion of certain paragraphs, substituting definition of certain terms used in the standard along with aligning the bare text of Standards with Conceptual Framework of Financial reporting under IndAS.

The MCA has notified the Companies (Meetings of Board and its Powers) Amendment Rules, 2021 

Which shall come into force on the date of their publication in the Official Gazette i.e 15-06-2021. Through this Amendment, Rule 4 related to the matters not to be dealt with in a meeting through video conferencing or other audiovisual means has been omitted. Accordingly, now all companies are free to discuss and approve the matters related to the approval of the annual financial statements; the approval of the Board’s report; the approval of the prospectus; the Audit Committee Meetings for ²[consideration of financial statement including consolidated financial statement if any; and the approval of the matter relating to amalgamation, merger, demerger, acquisition, and takeover, in any meeting held through video conferencing or other audio visual means. Earlier, MCA has provided relaxation in this regard up to 30^th June 2021.

Other Laws

SEBI

• The Securities and Exchange Board of India has amended the SEBI (Alternative Investment Funds) Regulations, 2012(“AIF Regulations”), which were notified on May 05, 2021. 

The Amendment, 2021 notified on June 25, 2021 provides a framework for AIFs to invest simultaneously in units of other AIFs and directly in securities of investee companies. In terms of Regulation 15(1) (c) and (d) of the AIF Regulations, AIFs may invest in an Investee Company up to a specified limit, directly or through investment in the units of other AIFs. In terms of Regulation 20(1), the key management personnel of the AIF and the Manager shall abide by the Code of Conduct as specified in the Fourth Schedule of the AIF Regulations. In terms of provision to Regulation 20(8) of AIF Regulations, there is a requirement to furnish a waiver to AIF in respect of compliance with the said Regulation. The consent of the investors of the AIF or scheme may not be required for change in ex-officio external members (who represent the sponsor, sponsor group, manager group or investors, in their official capacity), in the investment committee set up by the Manager.

• SEBI has relaxed the vesting period requirement under the employee stock option schemes of listed companies in case of the death of an employee, a move aimed at providing relief to families of the deceased staff amid the coronavirus pandemic. 

The relaxation will be available to all such employees who died on or after April 1, 2020. The Share Based Employee Benefit (SBEB) Regulation provides that there will be a minimum vesting period of one year in case of employee stock options and Stock Appreciation Rights (SAR). In the event of death of an employee, all the options, SAR or any other benefit granted to him or her under a scheme till such date will vest in the legal heirs or nominees of the deceased employee. SEBI has now decided the provisions under the SBEB Regulations relating to minimum vesting period of one year shall not apply in case of death (for any reason) of an employee and in all such instances, all the options, SAR, or any other benefit granted to such an employee will vest with his/her legal heir or nominee on the date of death of the employee.

• SEBI has issued a circular regarding Automation of Continual Disclosures as per SEBI (Prohibition of Insider Trading) Regulations, 2015 for System driven disclosures for inclusion of listed Debt Securities.

It has now been decided to include the listed debt securities of equity listed companies under the purview of the said System Driven Disclosures for the entities. The Depositories and Stock Exchanges shall make necessary arrangements such that the disclosures pertaining to listed Debt Securities along with equity shares and equity derivative instruments are disseminated on the websites of respective stock exchanges with effect from July 01, 2021.

RBI

RBI with an intent to infuse greater transparency and uniformity in practice has notified a Guidelines on the Distribution of Dividends by NBFCs.

These guidelines shall be applicable on all NBFC’s and shall be effective for the declaration of dividend from the profits of the financial year ending March 31, 2022, and onwards. All NBFCs eligible to declare dividend may pay a dividend, subject to the Dividend Payout Ratio is the ratio between the amount of the dividend payable in a year and the net profit as per the audited financial statements for the financial year for which the dividend is proposed. The proposed dividend shall include both dividend on equity shares and compulsorily convertible preference shares eligible for inclusion in Tier 1 Capital. Further, in case the net profit for the relevant period includes any exceptional and/or extraordinary profits/ income or the financial statements are qualified (including ’emphasis of matter’) by the statutory auditor that indicates an overstatement of net profit, the same shall be reduced from net profits while determining the Dividend Payout Ratio. It has also made clear that the Reserve Bank shall not entertain any request for ad-hoc dispensation on the declaration of dividend.

IBBI

• The Insolvency and Bankruptcy Board of India has issued the provisional list of IPs prepared in accordance with ‘Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2021

For appointment as, IRP in a CIRP under section 16(4), liquidator in a liquidation process under section 34(6), RP in an individual insolvency resolution process under section 97(4) or 98(3), and bankruptcy trustee (BT) under section 125(4), 146(3) or 147(3) of the Insolvency and Bankruptcy Code, 2016. This list shall be in effect during the period between July 1, 2021 – December 31, 2021. The Board has prepared a common Panel of IPs for appointment as IRP, Liquidator, RP and BT and shall share the same with the Adjudicating Authority (‘AA’) (NCLT and DRT) in accordance with these Guidelines. The Panel will have validity of six months and a new Panel will replace the earlier Panel every six months. For example, the first Panel under these Guidelines will be valid for appointments during July – December 2021, and the next Panel will be valid for appointments during January – June 2022, and so on. The NCLT may pick up any name from the Panel for appointment of IRP, Liquidator, RP or BT, for a CIRP, Liquidation Process, Insolvency Resolution or Bankruptcy Process relating to a corporate debtors and personal guarantors to corporate debtors, as the case may be.

View Monthly Compliance Calendar

KNM India can assist you with a range of complete financial services that range from Corporate advisory to Transaction advisory, Pre-incorporation to Post-incorporation, Insolvency and bankruptcy code to Secretarial services, Assurance to Internal audit services, along with Market entry strategy to Foreign company registration in India. To discuss about any of these please book your slot, or call us on +91-99105-04170 – or email us at services@knmindia.com to get a quick response.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for the period 26.05.2021 till 25.06.2021.

A much-needed relief by the Ministry of Corporate Affairs (MCA) to conduct the Extra Ordinary General Meetings (EGM) through Video Conference (VC) or Other Audio-Visual Means (OAVM) in accordance with the framework provided till 31^st December 2021.

A. Background

The Ministry of Corporate Affairs had earlier provided relaxations for conducting EGM through Video Conference (VC) or Other Audio-Visual Means (OAVM) on account of COVID-19. The MCA had issued the First General Circular no. 14/2020 dated 8^th April 2020 for providing relaxation wherein the companies were allowed to conduct Extra-Ordinary General Meeting (EGM) for passing ordinary and special resolutions requiring approval of members through VC or OAVM considering the COVID 19 outbreak situation.

In furtherance to the above circular, the Second General Circular no. 17/2020 was issued on 13^th April 2020 clarifying the framework for conducting the EGM through VC or OAVM.

B. Relaxation

Now, it has been allowed to all the companies to conduct EGM’s through VC or OAVM or transact items through postal in accordance with the framework provided till 31^st December 2021 vide the General Circular No. 10/2021 dated 23^rd June 2021.

MCA had already allowed the companies to conduct the Annual General Meeting (AGM) through VC or OAVM till 31^st December 2021 vide circular dated 13^th January 2021.

C. Frequently Asked Questions (FAQs)

1. Is the Facility of conducting EGM through VC or OAVM is available for all companies?

Yes, all companies whether Listed, Private, Public or Small Companies are allowed to provide facility of VC or OAVM for conducting their EGM.

2. Are companies allowed to conduct Annual General Meeting through VC or OAVM?

Yes, the Companies are allowed to conduct Annual General Meeting (AGM) through VC or OAVM facility.

3. Is it necessary to maintain the recorded transcript of the General Meeting held through VC or OAVM facility?

Yes, it is necessary to keep the recorded transcript in the safe custody of the Company.

4. What is the time period allowed by MCA to conduct the EGM / AGM through VC or OAVM?

As per the recent circulars, the Companies can conduct their EGM / AGM through VC or OAVM till 31^st December 2021.

The article has been contributed by:

CS Anuradha Newatia

Executive Secretarial

Further, we shall be happy to assist in case of any clarifications. For a deeper discussion, feel free to revert us at services@knmindia.com

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication.

Executive Summary:

Income Tax

1. Notification for relaxations of due date in time barring matters

2. Circular for extension of due dates falling on 31st March /30th April 2021, up to 31st May 2021

3. Circular extending compliance due dates for the FY 2020-21, relating to filing of returns and audit reports

4. Covid-19 relaxation in Section 269ST- Cash Receipt more than INR 2 Lakh.

5. Time line to update UDIN of Past Audit Reports and certificates has been further extended up to 30th June 2021

6. Government to launch new income tax e- filing website on 7th June 2021

International Tax

1. New Rule 11UD inserted in ITA to define the threshold limits for Significant Economic Presence

2. Section 139A exemption to Eligible Foreign Investors.

Goods and Services Tax

1. Relaxations in waiver of late fee and reduction in interest rates for compliance periods of March and April 2021

2. Amnesty and relaxations recommended by GST council in its 43rd Meeting dated 28th May 2021, capping late fee in filing GST returns

3. Recommendations by GST council for full exemption from GST to covid-19 related goods, imported from outside India on payment basis, for donating to government or any relief agency

4. Recommendations of the GST council to make present system of filing GSTR-1 / 3B, as default return filing mechanism under GST

5. Refund filing timeline to exclude period in notifying by the officer, deficiencies in refund application filed

Corporate & Other Laws

1. MCA has provided relaxation on additional fee on various forms as per the circular no. 06/2021 and 07/2021

2. MCA has provided clarification on offsetting the excess CSR spent for Financial Year 2019-20

3. MCA has provided the relaxation under the Section 173 by increasing the gap between two Board Meeting by 180 days

Income Tax

Notification for extension of Time barring matters

• The CBDT vide Notification No. 38/2021 Dated 27th April,2021 has decided to extend the various time barring dates, which were earlier extended to 30-04-2021, by various notifications. It has been decided to extend due dates from 30-04-2021 to 30-06-2021 in the following cases:

a) Time limit for passing of any order for assessment or reassessment, the time limit for which is provided under section 153 or section 153B.

b) Time limit for passing an order consequent to the direction of DRP under section 144C(13).

c) Time limit for issuance of notice under section 148 for reopening assessment where income has escaped assessment.

d) Time Limit for sending intimation of processing of Equalisation Levy.

• The CBDT vide Notification No. 39/2021 Dated 27th April,2021 has decided to extend the due date for making payment without additional charge under Vivad se Vishwas Act., which were earlier extended to 30-04-2021 has extended further from 30-04-2021 to 30-06-2021.
  Time line to update UDIN of Past Audit Report and certificates has been further extended
  CBDT notifies dated 30th April 2021 that the timeline to update UDIN of past uploads of audit report and certificates has been further extended
  up to 30th June, 2021 to avoid invalidation.
  Notifications for Statement of Financial Transactions (SFT) for Depository Transactions
  CBDT vide Notification No. 3 & 4 of 2021 dated 30.04.2021, issued format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Depository Transactions & Mutual Fund Transactions by Registrar and Share transfer Agent.Extension of dates by up to 31st May 2021 for compliances ending 31st March / 30th April
  (Circular No. 08/2021, Dated 30th April, 2021)

Though the due date for filing of Income-tax Return for the Assessment Year 2021-22 has been extended, but no relief shall be provided from the interest chargeable under section 234A if the tax liability exceeds Rs. 1 lakh. Thus, if self-assessment tax liability of a taxpayer exceeds Rs. 1 lakh, assessee would be liable to pay interest under section 234A from the expiry of original due dates, i.e., 31-07-2021 or 31-10-2021 or 30-11-2021. The interest under section 234A shall not be levied if the self- assessment tax liability of taxpayer does not exceed Rs. 1 lakh and ITR if filed within the extended due date.
Further In case of senior citizen having no PGBP Income, all taxes paid upto 31st July will be deemed as Advance Tax.

Relaxation in Section 269ST: Cash Receipt more than INR 2 Lakh
On account of Curbing cash transaction, Government had introduced the section 269ST, in which no person is allowed to take an amount of INR Two lakh or more from a person on a single day for one event/transaction.
However considering the surge of Covid-19, Govt. vide Notification No.56/2021 dated 07th May 2021, has allowed to below mentioned entities to take Cash after obtaining PAN or AADHAAR of the patient and the payee and the relationship between the patient and the payee:
– Hospitals, -Dispensaries, -Nursing Homes, -Covid Care Centres or similar other medical facilities. during period begin from 01.04.2021 to 31.05.2021.
On 10th May, 2021 Govt. has issued a corrigendum that instead of payee, Payer should be read.
Government to launch new income tax e-Filing website

Government has announced that it is launching a new website on 7th June, 2021 for income tax e-filing. ITA also said that the existing website will not be accessible between 1st June 2021 to 6th June 2021.
CBDT has issued first instruction for Faceless Assessment Scheme
CBDT has issued instruction that notices u/s 143(2) will be issued electronically by NeAC and cases covered under Central charge i.e. search & seizure, & International Taxation will still continue with Prescribed authority.

Extension of time limits of year end compliances for FY 2020-21
(Circular No. 09/2021, Dated 20th May, 2021)

Computation of FMV in case of Slump Sale
CBDT has notified a new rule 11UAE for computation of fair market value of capital assets in slump sale. As per the amendment, the new Rule 11UAE under section 50B has given two formulae for calculation and has stated that the fair market value will be the higher among the two values. It is to be noted that earlier, the actual consideration of the slump sale transaction was considered as full value of consideration for computing capital gains meaning thereby that there was no need to arrive at Fair Market Value.
Formula 1: The FMV1 shall be the fair market value of the capital assets transferred by way of slump sale
Formula 2: FMV2 shall be the fair market value of the consideration received or accruing as a result of transfer by way of slump sale
Accordingly, now a uniform formula to compute FMV in case of slump sale has been provided, which shall provide a certainty in tax litigation and clarity to taxpayers.
Clarification on limitation for filing of CIT(A)
CBDT via Circular No 10 of 2021 dt 25.05.2021, issues clarification w.r.t. limitation for filing of appeals before CIT(Appeals) under Income- tax Act,1961 in consonance with directions issued by Hon’ble Supreme Court in Suo Motu WP(Civil) No 3 of 2020 vide order dt 27th Apr, 2021. It was clarified that if different relaxations are available to the taxpayers for a particular compliance, the taxpayer is entitled to the relaxation which is more beneficial to him. Thus, for the purpose of counting the period(s) of limitation for filing of appeals before the CIT(Appeals) under the Act, the said limitation stands extended till further orders as ordered by the Hon’ble Supreme Court in aforesaid Suo-motu Writ Petition.

International Tax

• New Rule 11UD inserted in ITA to define the threshold limits for Significant Economic Presence
  CBDT vide Notification No. 41/2021 Dated 3rd May,2021 has inserted a new rule 11UD to define the threshold limits for Significant Economic Presence u/s 9(1)(i) that specify transaction based threshold is Rs.2 Crores whereas user based threshold is Rs. 3 lacs users in India.
• Notifications for exemption of provision of section 139A not apply on Eligible Foreign investor
  CBDT vide Notification No. 42 of 2021 dated 04.05.2021, further amend rule 114aab to give exemption w.r.t. to provision of section 139A, to those Non-resident or foreign companies who are investing in capital asset like GDRs & etc. which are listed on IFCs & consideration are paid in Foreign currency only. Person must ensure that they are having income from these capital asset only in India.

GST

Section-A: Relaxations on account of Covid-19 – Period Covered: March and April 2021

** Pursuant to recommendations of GST council in its 43rd Meeting dated 28th May 2021, the said period has been extended from 15th April 2021 to 29th June 2021 and the revised due date being 30th June 2021.

Section-B : Key outcomes of 43rd GST Council Meeting dated 28th May 2021
1. Amnesty scheme for waiver of Late Fee

Condition: The reduced rate of late fee would apply if GSTR-3B returns for these tax periods are furnished between 01st June 2021 to 31st August 2021.
2. Rationalization of Late fees for Future periods

3. Simplification of Annual Return for Financial Year 2020-21
– In order to ease compliance in filing of Annual return- GSTR-9 for the FY 2020-21, amendments were made in Finance Act, 2021 omitting
the requirement for obtaining certified Reconciliation Statement in GSTR-9C, from a chartered accountant.
– Accordingly, compliance for the FY 2020-21 regarding annual return is as under:

4. Other key recommendations of the Council

The aforesaid relaxations are recommendations of the GST council in its recent 43rd meeting dated 28th May 2021. Formal notification in respect of various relaxations shall be separately released, wherever applicable.

Section-C : Other Notifications

Changes made according to various CGST rules Notification No. 15/2021 – Central Tax dated 18th May 2021

CBIC vide notification No. 15/2021 dated 18th May 2021, On the recommendations of the council Government made amendment in procedures of various rules including additions or removal of proviso in rules of revocation of cancellation of registration, acknowledgement of refund applications, order sanctioning refund and E- way bill rules to provide ease of compliances and procedures to support respective sections.

CBIC has issued circular on Standard Operating Procedure (SOP) for implementation of the provision of extension of time limit to apply for revocation of cancellation of registration

CBIC vide circular No. 148/04/2021-GST dated 18th May,2021, issue procedure on SOP for implementation of the provision of extension of time limit to apply for revocation of cancellation of registration u/s 30 of CGST Act amended to ensure uniformity in the implementation of the provisions, till the time an independent functionality for extension of time limit for applying in FORM GST REG-21 is developed on the GSTN portal.

Measures to facilitate trade during lockdown period facility of acceptance of an undertaking in lieu of Bond
CBIC vide Circular No. 09/2021 – Customs dated 08th May 2021 has decided to restore the facility of acceptance of an undertaking in lieu of bond by custom formations from the date of issue of circular till 30th June 2021, terms and conditions remain the same as underlined in circular no. 17/2020, dated 30th April 2020 as amended by circular no. 21/2020 dated 21st April 2020. Importers/ Exporters availing the facility shall ensure that the undertaking furnished in lieu of bond is duly replaced with a proper bond by 15th July 2021.

Clarification regarding carrying out Job work under the ambit of the Customs (Import of goods at concessional rate of duty IGCR) Amendment rules, 2021
CBIC vide Circular no.10/2021-customs , dated 17.05.2021, extended scope of job work for a manufacturer importer who is without complete manufacturing facility. Also, 100% out sourcing for manufacture of goods on job-work basis has been permitted for importers who do not have any manufacturing facility at all. However, sensitive sectors such as gold, articles of jewellery and other precious metals or stones have been excluded from the facility of job work. Detailed procedure had been prescribed for an importer which provide prior Intimation to Jurisdictional officer along with one time continuity bond. Periodical prescribed details has to be made available to the concerned officers as prescribed.

Exempt IGST on imports of specified covid-19 relief material donated from abroad
Ad hoc exemption has been provided through Exemption order no. 4/2021- Customs Dated 03rd May 2021 for IGST on imports of specified COVID-19 relief material donated from abroad, up to 30th June, 2021.

IGST has been reduced on oxygen concentrators when imported for personal use
CBIC vide Notification No. 30/2021-customs dated 01st May, 2021 notifies to reduce IGST to 12% on Oxygen Concentrators when imported for personal use. This notification shall remain in force upto and inclusive of the 30th June, 2021.

Corporate Laws

Relaxation of time of filing forms related to creation or modification of charges under the Companies Act, 2013
a) In case, a form CHG-1 and Form CHG-9 where the date of creation and modification of charge is before 01.04.2021, but time line for filing such form had not expired under section 77 of the act as on 01.04.2021 , the period beginning from 01.04.2021 and ending on 31.05.2021 shall not be reckoned for the purpose of counting the number of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after 31.03.2021 shall be reckoned as 01.06.2021 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.
b) In case a modification and creation of charge fall on any date between 01.04.2021 to 31.05.2021, the period beginning from the date of
creation/modification of charge to 31.05.2021 shall not be reckoned for the purpose of counting of days under section 77 or section 78 of the Act.

Gap between two Board Meeting under section 173 of the Companies Act, 2013:
It has now said that the gap between two consecutive board meetings can extend to 180 days during the quarter – April to June 2021 and July to September 2021 – instead of 120 days as stipulated in the company law. Resurgence of Covid-19 cases during the ongoing second wave has prompted the corporate affairs ministry (MCA) to relax the norm around the time gap between two consecutive board meetings of companies in a financial year. It has now said that the gap between two consecutive board meetings can extend to 180 days during the quarter – April to June 2021 and July to September 2021 – instead of 120 days as stipulated in the company law. Put simply, another sixty days window is being extended as gap between two consecutive Board meetings.

Clarification on offsetting the excess CSR spent for Financial Year 2019-20:
The certain companies claimed to have contributed CSR funds to the ‘PM CARES Fund’ over and above their prescribed CSR amount for FY 2019-20. Several representations have been received in the Ministry for setting off the excess CSR amount spent by the companies in FY 2019-20 by way of contribution to ‘PM CARES Fund’ against the mandatory CSR obligation for FY 2020-21. The issues raised in the said representations have been examined in the Ministry and accordingly, it is hereby clarified that where a company has contributed any amount to ‘PM CARES Fund’ on 31.03.2020, which is over and above the minimum amount as prescribed under section 135(5) of the Companies Act, 2013 (“Act”) for FY 2019-20, and such excess amount or part thereof is offset against the requirement to spend under section 135(5) for FY 2020-21 in terms of the aforementioned appeal, then the same shall not be viewed as a violation subject to the conditions that:
i. the amount offset as such shall have factored the unspent CSR amount for previous financial years, if any;
ii. the Chief Financial Officer shall certify that the contribution to “PMCARES Fund” was indeed made on 31st March 2020 in pursuance of the appeal and the same shall also be so certified by the statutory auditor of the company; and
iii. the details of such contribution shall be disclosed separately in the Annual Report on CSR as well as in the Board’s Report for FY 2020-21 in terms of section 134(3) (o) of the Act.
Waiver of additional fees on filing of various forms as per Circular no. 06/2021 and 07/2021, dated 3rd May 2021
Relaxation was provided to Companies and LLPs in filing of various forms, related to companies and LLP without payment of any additional fees where it has been due for filing for a specified period of time, the Ministry has issued a clarification listing out the forms covered under such relaxation. Further, it is to be noted that the relaxation w.r.t waiver off additional fees has been provided for the forms which are due for filing during a specific period of time only; therefore the clarification (list of forms) has to be referred along with its respective circular issued on 3rd May 2021.

Other Laws

SEBI notifies substantial amendments in Listing Regulation(Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021)
SEBI, the capital market regulator of India, vide a gazette notification dated 06th May, 2021 notified Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 [“the Amendment Regulations”] that were approved in SEBI’s Board Meeting held on March 25, 2021. Most of the amendments were already rolled out earlier as consultation papers in 2020. The amendments become effective from May 06, 2021.

RBI
Sponsor Contribution to an AIF set up in Overseas Jurisdiction, including IFSCs:
The Ministry of Finance, Government of India, Reserve Bank of India vide Circular No. 04/RBI/2021-22 dated 12.05.2021 has provided that in attention of AD Category – I banks is invited to paragraph A.3.(e) and B.6 of Master Direction No.15 dated January 1, 2016, on “Direct Investment by Residents in Joint Venture (JV) / Wholly Owned Subsidiary (WOS) Abroad”, as amended from time to time and Regulation 7 of the Notification FEMA 120/2004-RB, pertaining to provisions for an Indian Party (IP) making investment/ financial commitment in an entity engaged in the financial services sector.
The Circular states that Investment by Indian Party (“a company incorporated in India or a body created under an Act of Parliament or a partnership firm registered under the Indian Partnership Act, 1932 making investment in a Joint Venture or Wholly Owned Subsidiary abroad”), as a sponsor into AIF set-up in an overseas jurisdiction and IFSCs in India will be considered as an outbound investment under the automatic route provided Indian Party complies with the conditions investing in an entity engaged in the financial service sector outside India.
This is a welcome move by the regulator as Indian Party is no longer required to take prior RBI approval. This move should boost the IFSC regime.

Relaxation on in timeline for compliance with various payment system requirements
A reference is invited to Reserve Bank of India instructions – (a) DPSS.CO.PD.No.1164/02.14.006/2017-18 dated October 11, 2017(as updated from time to time) on Master Direction on Issuance and Operation of Prepaid Payment Instruments (PPI-MD);
(b) DPSS.CO.PD.No.629/02.01.014/2019-20 dated September 20, 2019 on Harmonization of Turn Around Time (TAT) and Customer Compensation for Failed Transactions using Authorised Payment Systems; (c) DPSS.CO.OD.No.1325/06.11.001/2019-20 dated January 10, 2020 on Scope and Coverage of System Audit of Payment Systems; (d)DPSS.CO.PD.No.1810/02.14.008/2019-20 dated March 17, 2020 on Guidelines on Regulation of Payment Aggregators (PAs) and Payment Gateways (PGs); and (e) DPSS.CO.PD.No.1897/02.14.003/2019-20 dated June 4, 2020 on Extension of Timeline for Compliance with Various Payment System Requirements.
Keeping in view the resurgence of the COVID-19 pandemic and the representations received from various bank and non-bank entities, it has
been decided to extend the timeline prescribed for compliance in respect of a few areas.

DGFT
Amendment in Import Policy of integrated circuits and incorporation of policy condition.
The Ministry of Finance, Government of India, Central Board of Indirect Taxes and Customs vide Notification No. 05/2015-2020 dated 10.05.2021 has amended Import policy of item of Electronic Integrated Circuits shall be subject to Chip Imports Monitoring System (CHIMS) with effect from 01.08.2021.
Issuance of Export Authorisation for Restricted Items (Non-SCOMET) from new online Restricted Exports IT Module w.e.f. 17.05.2021.
The Ministry of Finance, Government of India, Central Board of Indirect Taxes and Customs vide Trade Notice No. 03/2021-22 dated 10.05.2021 has introduced a new online module for filing of electronic, paperless applications for export authorizations with effect from 17.05.2021. All applicants seeking export authorization for restricted items may apply online by navigating to the DGFT website (https://www.dgft.gov.in) → Services → Export Management Systems → License for Restricted Exports. Accordingly, applications for issuance as well as for amendment/re-validation of export authorization will need to be submitted online as per the above link and export authorizations for restricted items(Non-SCOMET) will continue to be issued from DGFT HQ, Udyog Bhawan, New Delhi through new module with effect from 17.05.2021. It may further be noted that all pending applications will be migrated to this new system and will be processed at DGFT(HQ).

On account of COVID 19, Indian Government is trying to provide relieves / measures to address the confusion / unrest in the industry. In continuation of relaxation and other parameters addressed by government, RBI; SEBI; DGFT and MCA has provided some of the important announcement / clarifications as mentioned in this presentation.

Due Dates: June 2021

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication.