REPORTING OF FORM FC-GPR TO RBI

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RBI Circular No. 40 dated 1st February, 2016; RBI has made it mandatory to report any transactions and filing of forms online in respect of issue and transfer of shares from an Indian Entity to outside India.

The Form FC-GPR comes into use whenever there is new issue of shares. The onus to submit the form or comply with the laws is on the resident entity.

Any Company or Organization receiving foreign investment must report the transaction to the RBI within a stipulated timeline. Similar to the filing of FC-TRS which is filed online, the Form FC-GPR is also required to be filed online.

The timeline is briefly described below:

  1. a) Foreign funds received
  2. b) Within 30 days of receiving the money file ARF (Advance Remittance Form) with the RBI
  3. c) RBI will issue UIN (Unique Identification Number) after submission of ARF
  4. d) Within 180 days from the date of receiving the money, allot the shares
  5. e) File FC-GPR within 30 days from the date of allocation of shares.

Before reporting the transaction, applicant needs to obtain following:

  • Unique Identification Number from RBI by reporting of Advanced Foreign Remittance.
  • KYC report for the beneficiary if the beneficiary and remitter are different entities.
  • CS certificate
  • Certificate from SEBI registered Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India
  • Disclaimer Certificate
  • Statutory Auditor Certificate
  • Board resolution
  • LRN(Loan Registration Number) allotted
  • Copy of FIPB approval (if required)
  • Details of Transfer of shares if any
  • No objection certificate from the remitter for the shares being allotted to the third party mentioning their relationship
  • Letter from the foreign investor explaining the reason for making subscription to shares by the remitter on his behalf
  • Copy of agreement/Board resolution from the investee company for issue and allotment of shares to the foreign investor, other than the remitter
  • Reason for delay in submission (if required)

Once all the above documents are obtained, the applicant shall duly fill the Form FC-GPR and complete it in all respects without any error, attach the Digital Signature of the applicant and upload the form online at https://www.ebiz.gov.in. In this case also, it is to be noted that merely filing the Form FC-GPR does not discharge an entity of its duties in regard to compliance of the relevant laws, the same shall be considered complete only after it is approved by the RBI.

General Instructions

  • The electronic form (Form) can be accessed from service landing page and can be filled offline
  • If you choose “Load prefill data” option while opening the form, then some fields may get prefilled with data you have filled previously while applying for this service. You may change this data if you wish.
  • The saved draft can be accessed later from “My Saved Drafts” section in Menu options. This draft is available for 3 months or until the form is submitted.
  • Field marked with * are mandatory and needs to be filled in before a form can be submitted on e-Biz portal. You may not be able to leave some of the field’s blank in the e-Form. In case you wish not to enter data in a field, please input “NA” if it is a text/description field or a 0, if it is a numeric field.
  • The e-form needs to be digitally signed using a digital signature by the applicant. If applicant wishes to make any modifications to an already signed e-Form, right-clicking on the signature field and choosing “Clear signature” will enable editing of form and any modifications can be made to the form.

Electronic Attachments:

Upload the file using the attach link and if you wish to remove any file, use the remove link.

  • Reason for delay in submission: this attachment is required if the form is submitted after 30 days from the date of receipt of funds
  • CS Certificate
  • III. Certificate from SEBI registered Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India.
  • Disclaimer certificate
  • Statutory Auditor Certificate
  • Board resolution
  • VII. LRN(Loan Registration Number) allotted
  • VIII. Copy of FIPB approval (if required)
  • Transfer of shares details, if applicable
  • If the investor and remitter are separate entities, please provide the following documents:
  • No objection certificate from the remitter for the shares being allotted to the third party mentioning their relationship
  • Letter from the foreign investor explaining the reason for making subscription to shares by the remitter on his behalf
  •  Copy of agreement/Board resolution from the investee company for issue and allotment of shares to the foreign investor, other than the remitter
  •  KYC report for the beneficiary
  • Any other attachments: Add any other document if required.

 

Verification:

Enter the following details in this section:

  • Name of the Person
  • Name of the Place.
  • Date of signing the electronic form
  • Designation.
  • Digital Signature of Authorized signatory of the investee company.

 

Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, VALUE ADDED TAX,GOODS AND SERVICE TAX, Excise, Etc for resolving their doubts or for clarifications.

 

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NEW UPDATE ON LEGALITY OF REOPENING OF ASSESSMENT U/S 147/263 BASED ON AUDIT OBJECTIONS

NEW UPDATE ON LEGALITY OF REOPENING OF ASSESSMENT U/S 147/263 BASED ON AUDIT OBJECTIONS

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One of the key sources of dispute is the existing arrangement for follow up on audit objections by Internal Audit Party and the Revenue Audit Party. In terms of the existing arrangement, the AO is required to take corrective steps following audit objections. The corrective measures take the form of rectification or reassessment (by reopening the case under section 147 or revision by the Principal Commissioner or Commissioner under section 263). In the case of rectification, these are general in the nature of correction for arithmetical errors and other mistakes which are apparent from the record. The problem arises when the AO seeks to take corrective measures by invoking the provisions of section 147 or 263 of the Income tax Act. Since the audit objections are based on material on record and there is no occasion for new material to be brought on record in the course of audit, any reopening of assessment or review by the Principal Commissioner constitutes “change of opinion” in the eyes of the law. This being so, the corrective measure under section 147 or section 263 of the Income tax Act is held to be invalid by Courts.

In spite of several court judgments to this effect, the CBDT had issued a circular to the effect that in all cases of audit objections, the AO should initiate corrective steps irrespective of whether the objection is valid or not in the eye of law. Consequently, steps are initiated by the AO to reopen the completed assessment or by the Principal Commissioner for revision of assessment orders. These steps give rise to several rounds of litigation; first the assessee challenges the very act of reopening or revision, as the case may be, and upon losing, the Department files appeal before the higher Courts thereby clogging the judicial system. While this process is on, the AO proceeds to complete the assessment on merit leading to another round of litigation. In large number of cases, the assessments on merit are completed even though the Department is in disagreement with the audit objection. The very issue has also been considered by the Income-Tax Simplification Committee constituted by the Govt. of India against such mechanical reopening .

In a recent judgment in case of Sunil Gavaskar vs. ITO, the Hon’ble bench of ITAT Mumbai considered the legality of such reassessments based on audit objections. Primarily reopening merely on the basis of audit objections and in absence of any new material indicating escapement of income, amounts to change of opinion and creates uncertainties for taxpayers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances ;Hope the information will assist you in your Professional   endeavors. For query or help, contact:  info@carajput.com or call at  9555555480

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CORPORATE AND PROFESSIONAL UPDATE APRIL 30, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 30, 2016

34

Direct Tax:

Income Tax has issued a circular on Framework for computation of book profit for the purposes of levy of MAT under section 115JB of the Income-tax Act, 1961 for Indian Accounting Standards (Ind AS) compliant companies dated 28/04/2016.

 Levy of entertainment tax – Water sport activities offered by Polo Amusement – Polo amusement contended that levy of ET under the ET Act is conditional upon the activity being amusement where people are given admission to an entertainment as defined under Section 2(a) – Held that – the charging provision, Section 6 (1) enacts that tax is to be levied and paid on all payments for admission to any entertainment. Section 2 (m)(iv).( Commissioner of Excise Entertainment, Polo Amusement Park Ltd. Versus M/s Polo Amusement Park Ltd. & Others, Govt of NCT of Delhi And Another).- 2016 (4) TMI 1059 – DELHI HIGH COURT

INDIRECT TAX:

Department of Trade & taxes has issued a notification that returns in Form CR-II for the financial year 2015-16 are required to be filed by 16-May-2016 vide Notification no. .F.3(628)/Policy/VAT/2016/113- 125 dated 28/04/2016

DVAT has extend the period of Filling of online return for fourth quarter of 2015-16 vide circular No. 02 of 2016-17

MCA UPDATES

MCA clarifies that the companies (AS) amendment rules, 2016 dated 30.03.16, to be applicable from F.Y.2016-17. Circular no. 04/2016.

FEMA Updates:

RBI has issued a circular on Foreign Exchange Management (Remittance of Assets) Regulations, 2016 vide circular No. 64/2015-16 [(1)/13(R)] dated 28/04/2016

Key Dates:

  • Deposit of TDS deducted during during March (Other than u/s 194IA in case of purchase of property) through Challan No. ITNS-281- 30/04/2016
  • Excise Return ER-5 for FY 2014-15 by units paying duty > 1 Crore (CENVAT + PLA) in Form ER-5-30/04/2016
  • Excise Return ER-7 for FY 2014-15 by other excise units- 30/04/2016
  • E-Filling of information of declarations in Form 60 received upto 31st March in Form 61-30/04/2016
  • Filling of option to avail composition scheme in DVAT-01- 30/04/2016
  • Filling of withdrawal from composition Scheme in DVAT-03 – 30/04/2016

Plain paper has no value but if you write on it, it becomes document. Life is same, you have to decide which kind of document you want to make of it.

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CORPORATE AND PROFESSIONAL UPDATE APRIL 29, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 29, 2016

1DIRECT TAX:

  • IT:Expenditure incurred towards fund – allowed as deduction while computing income of the assessee co-operative bank – The Karnataka State Co-operative Apex Bank Ltd. Vs. DCIT, Cir-3(1), Bangalore (2016 (4) TMI 871 – ITAT Bangalore)
  • IT:Deduction u/s. 54F – allowance of claim as assessee has purchased a semi-finished house and completed construction before the three years period as prescribed –  Srinivasa Rao Vs. ACIT, Cir-3(2), Hyderabad (2016 (4) TMI 867 ITAT Hyderabad)
  • Today (28.04.16) is last date to file DVAT- 56 (DVAT Return verification form) and DVAT-48(Return of TDS) for quarter ended March, 2016.
  • CBDT Circular regarding Commencement Of Limitation For Penalty Proceedings U/s 271D and 271E of the Income tax Act, 1961
  • The CBDT has issued Circular No. 09/DV/2016 dated 26th April 2016 in which it has expressed the view, by relying on the judgement dated dated 8.7.15 of the Kerala High Court in Grihalaxmi Vision vs. ACIT that the limitation for imposition of penalty under sections 271D and 271E of the Income tax Act, 1961 does not commence at the level of the Assessing Officer (below the rank of Joint Commissioner of lncome Tax) but commences at the level of the Range authority i.e. the Joint Commissioner of Income Tax./Addl. Commissioner of Income Tax. The CBDT has advised Assessing Officers (below the rank of Joint Commissioner of Income) to make a reference to the Range Head regarding any violation of the provisions of section 269SS and section 269T of the Act, as the case may be, in the course of the assessment proceedings (or any other proceedings under the Act). It has directed that the Assessing Officer, (below the rank of Joint Commissioner of Income Tax) shall not issue the notice in this regard. The Range Head will issue the penalty notice and shall dispose/ complete the proceedings within the limitation prescribed u/s 275(1)(c) of the Act
  • reduces interest rates on employee provident fund (EPF) from 8.75% to 8.7% for financial Year 2015-16.
  • Family pension claim not acceptable if option to join scheme was not exercised. [Ganesh Prasad Mishra vs. Commissioner EPF Organization (Madhya Pradesh HC at Indore)].
  • Excess of TDS deposited u/s. 195 eligible for interest u/s. 244A. Circular no:11/2016– IT.
  • Relaxation of Know Your Customers (KYC) Norms for customs notified vide circular no. 13/2016 dated 26Th April 2016- (click here to view)
  • The Contract entered for the purpose of packing loading and unloading etc. of the goods for which labour was supplied by the assessee to M/s Birla Corporation Ltd. cannot be held as Cargo Handling Service as the two conditions are not satisfied- (The Deputy Commissioner, Central Excise & Another Versus Sushil & Company – 2016 (4) TMI 987 – SUPREME COURT.
  • Assessee is providing the services directly to M/s. Jet Airways (I) bPvt. Ltd. which is not on behalf of Airport Authority – it cannot be said that Airport Authority has authorized the assesse to provide the services- (Commissioner of Service Tax, Mumbai-I Versus Soft Touch Aviation – 2016 (4) TMI 986 – CESTAT MUMBAI)

INDIRECT TAX:

  • Delhi VAT extended online return filing due date till 16/05/2016 for Q4 15-16 vide circular no: 02 dated 28th April.
  • DELHI VALUE ADDED TAX ACT, 2004 – NEW COMPOSITION SCHEME FOR RESTAURANTS AND HALWAIS : CIRCULAR NO.01 OF 2016-17 [NO.F.3(664)/POLICY/VAT/2016/106-112], DATED 27-4-2016 dealers whose annual turnover is upto Rs. 50 Lakhs and who makes sales of cooked food, snacks, sweets, savouries, juices, aerated drinks, tea and coffee etc. have an option to pay composition tax @ 5%.

COMPANY LAW:

  • Query: One of our client company has not done annual filing since F.Y 2009-10. Now when are trying to file the same. Form 23AC, ACA and Form 20B are not available on MCA portal. Can we file the same through Form GNL- 2. Advice
  • AnswerNo, Annual filing e-forms under the Companies Act, 1956 viz. 23AC/ACA, 23AC/ACA-XBRL, 20-B, 21-A, Form 66, I-XBRL, A-XBRL, 23B, 23C and 23D would be made available shortly for filing purposes on MCA Portal. You are therefore advised not to file these forms as attachments with GNL-2 e-forms.
  • MCA has issued general circular no. 04/2016 dated 27th April 2016: amended AS should be used for preparation of accounts for accounting periods commencing on or after the date of notification.

MCA UPDATES:

  • MCA has released Clarification with regard to Companies (Accounting Standards) Amendment Rules 2016 vide Circular No- 04/2016 dated 27/04/2016. (Click here to view)
  • MCA has released Notification regarding the Jurisdiction of the state of Telangana under Section 396 of Companies Act 2013 vide Notification dated 26/04/2016. (Click here to view)

OTHER :

  • Amended ASs to be applied from FY 16-17 onwards
  • ICAIin order to make the Members aware as to what information is going to flow from Institute’s records in MEF this year has hosted Pre-MEF data verification at meficai.org for applicants’ perusal w.e.f. TODAY (27 APR 2016).
  • RBIhas issued a Master Direction for merger of private sector banks and also between NBFCs and banks.
  • releases draft guidelines for computation of book profit by Ind AS compliant Cos
  • Courier entities in Delhi to file return in CR-II for F.Y.2015-16 byMay 16, 2016

Key Dates:

  • Filing of DVAT return verification form for quarter ended March where return not signed with digital signature: 28/04/2016
  • Return of DVAT TDS for quarter ending March: 28/04/2016
  • Return by scheduled banks branches in delhi engaged in sale of silver, gold, repossessed vehicles for quarter ending March: 28/04/2016

The most useful asset of a person is not a head full of knowledge but a heart full of love with ears open to listen and hands willing to help.

Your mind is a magnet. If you think of blessings, you attract blessings and if you think of problems, you attract problems. Always cultivate good thoughts and always remain positive and optimistic.

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CORPORATE AND PROFESSIONAL UPDATE APRIL 26, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 26, 2016

29

Direct Tax:

Waiver of loan tantamount to benefit or perquisite, chargeable to tax under Sec. 28(iv)[2016] 68 289 (Madras) Commissioner of Income Tax v. Ramaniyam Homes (P.) Ltd.

Interest on loan allowed to be deducted as loan was obtained to repay on old business loan [2016] 68 223 (Bangalore Trib.) Senate v. Deputy Commissioner of Income-tax

Indirect Tax:

Govt. constitutes board to issue eligibility certificates for availing tax benefits by ‘startups’25 April 2016, Govt. constitutes board to issue eligibility certificates for availing tax benefits by ‘startups’

Operating of plants of client is ‘Business Support Services’ and not ‘Maintenance or Repair services'[2016] 68 239 (Mumbai – CESTAT)  Commissioner of Service Tax v. Global S.S. Construction (P.) Ltd.

Department cannot insist to avail particular option under rule 6. [Mahindra & Mahindra Limited vs. CCE (CESTAT New Delhi)].

CENVAT allowed on linkage of inputs/capital goods to production. [C.C.E. Raipur vs. Bharat Aluminum Co. Ltd. (CESTAT NewDelhi)].

Excise & Customs : Where assessee has manufactured or exported goods by procuring domestic inputs without payment of duty under rule 19(2) of Central Excise Rules, 2002, then, in view of specific restrictions imposed by drawback notifications, no drawback can be allowed to assessee (not even of customs component of drawback)[2016] 68 238 (Bombay)  Anandeya Zinc Oxides (P.) Ltd. v. Union of India

Delhi VATCOM assured extension of return filing due date till 16/05/2016 for Q4 15-16. Further assured that item name and item code to be optional for Q4 15-16. Members are advised to file returns only after new updation of software i.e. 03/05/2016. Digital signature is also made optional for Q4 (All dealers).

Company Law:

Query: We filed Form INC-29 and there is resubmission but when we affixing DSC, the size of e-form automatically increase by 2 MB and there is pop-error as file size cannot exceed 5 MB. Kindly advice as is there any alternate way as its last date of resubmission is also approaching.

Answer: This is a technical issue on the part of new modified MCA Portal, you can compress the attachments and try accordingly.

AASB of ICAI issues guidance note on the Companies (Auditors Report) Order, 2016 on 23.04.2016.

Key dates

Extension of due date of filing ST-3 returns from 25th April to 29th April : Assessees have faced difficulties in accessing the ACES application on 25th April 2016, therefore, in exercise of the powers conferred by sub­rule (4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs has extended the date of submission of the Form ST-­3 for the period from 1st October 2015 to 31st March 2016, from 25th April 2016 to 29th April 2016 vide Order No. 1/2016-ST.

I think if you just look at life in a positive way, positive things will happen. -Jake Owen

Words have no value. But the manner in which you chose them while speaking decides whether you will get value or pay for them.

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CORPORATE AND PROFESSIONAL UPDATE APRIL 25, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 25, 2016

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DIRECT TAX:

The definition of rent includes any payment by whatever name called, for use of buildings including factory buildings, equipment, furniture or fittings. Even if machinery was leased, the consequent rent comes under the definition. But machinery lease cannot be considered under income from House property .(Heritage Hospitality Limited Versus Deputy Commissioner of Income Tax, Circle-2 (2) , Hyderabad)- 2016 (4) TMI 873 – ITAT HYDERABAD

Unexplained investment – addition made simply on the basis of the statement recorded u/s. 133A – Held that – An admission by assessee during the search or survey proceedings cannot be considered as conclusive unless it is supported by corroborative evidence. (Sai Priya Constructions and Others Versus The Income Tax Officer, Ward-8 (2) , Hyderabad) 2016 (4) TMI 868 – ITAT HYDERABAD

INDIRECT TAX:

CBEC have revise the rate of exchange of conversion of the foreign currency with effect from 22nd April, 2016  vide Notification No. 55/2016 – Dated 21-4-2016 – Customs (Click here to view)

Indian Revenue Services ( Customa and Excise ) Group “A” Rules 2016 vide Notification No. G. S. R. 438(E) dated 22/04/2016

Imposition of penalty – Services provided as marketing agent – non-payment of Service Tax for the commission payments received – Held that – it is clear that the 2nd respondent has given an opportunity of personal hearing to the petitioner and he was also represented by his counsel before the 2nd respondent. The petitioner also filed his reply before the 2nd respondent, which was also considered by the 2nd respondent. Therefore, from the above, it is clear that there is no violation of principles of natural justice committed by the respondents  (V.R. Mohanraj, Proprietor of M/s. VMBK Promoters Versus The Commissioner of Service Tax –I , The Joint Commissioner of Service Tax)

MCA UPDATES:

MCA has released FAQs on problems faced by Stakeholders due to change/updation of MCA Portal.

KEY DATES:

 E-Return for DVAT for the quarter ended March: 25-04-2016 (Form 16 and CST 1)

Service tax return ST-3 for the half year ended March: 25-04-2016

Today or any day that phone may ring and bring good news. -Ethel Waters

Bath purifies body, Meditation purifies mind, Prayers purify soul, Charity purifies wealth, Fast purifies health and Forgiveness purifies relationship.

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CORPORATE AND PROFESSIONAL UPDATE APRIL 23, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 23, 2016

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DIRECT TAX:

IT: Expenditure relatable to day to day running of the business is allowable as revenue expenditure in the hands of assessee irrespective of the fact that the assessee was following percentage completion method of recognizing its revenue – Arun Pitambar Seth Vs. ACIT, Cir-3, Pune (2016 (4) TMI 752 – ITAT Pune)

IT: Assessment u/s 153C – the concerned documents / diaries did not emanate from out of seizures made in the course of search action – M/s. Giriraj Developers Vs. ACIT, Cir-13, Mumbai (2016 (4) TMI 749 – ITAT Mumbai)

No penalty for non-maintenance of TP docs if assessee furnished updated margins of earlier comparables Assistant Commissioner of Income-tax, Circle-6, Jaipur v.Integrated Decisions & Systems (India) (P.) Ltd.[2016] 68 taxmann.com 185 (Jaipur – Trib.)

Fall in value of stock allowed to be deducted, though it was in transit and lying at port Pr. Commissioner of Income Tax v. STCL Ltd [2016] 68 taxmann.com 224 (Karnataka)

IT: Export sales directly made to the consignee through the sister concern was the deemed export of the assessee – deduction u/s 10B allowed – M/s. Earth Stone Group Vs. ACIT (2016 (4) TMI 824 – ITAT Delhi)

INDIRECT TAX:

ST: Once what is received by the service receiver being output services the same would automatically become input service in terms of Rule 2 (l) of Cenvat Credit Rules – M/s Sundaram Industries Ltd. Vs. CCE, Madurai (2016 (4) TMI 777 – CESTAT Chennai)

Excise & Customs: Where assessee surrendered its registration certificate for de-registration, denial of de-registration on ground that a case of demand of duty was pending against it was wrong [2016] 68 taxmann.com 200 (Mumbai – CESTAT)  Akasha Syncotex Ltd. v. Commissioner of Central Excise

VAT & ST: Refund of excess TDS – construction business – Section 27 & 24 of HVAT Act would be applicable only to the taxable turnover i.e. after deducting service component and turnover relating to sales outside State in the course of inter-state sales or in the course of import – M/s. S.M. Constructions, Ludhiana Vs. The State of Punjab (2016 (4) TMI 762 – Punjab & Haryana High Court)

DVAT: Delhi Govt. has issued Delhi Value Added Tax (Amendment) Rules, 2016. Return Forms DVAT-16 and DVAT-17 have been amended wherein dealers are now required to furnish details of purchases and sales in Annexure 2A and 2B along with the description of goods and their codes. Forms DVAT-30 and DVAT-31 have also been amended.

ST: Increase in rates of service tax in respect of bank guarantee and insurance premium is directly relatable to the terms of the contract – M/s Centrodorstroy Vs. NHAI (2016 (4) TMI 801 – Supreme Court)

VAT & ST: Different view taken by Court – Tribunal has already decided the matter in case of original petitioner – Once a decision has attained finality it cannot be upset just on a mere ground that subsequently the higher forum has taken a different view – M/s. IFB Industries Ltd. Vs. DCCT (2016 (4) TMI 761 – Karnataka High Court)

Other Update

MCA: The relaxation of additional fees vide General Circular No.03/2016 dated 12 APR 2016 has been implemented in MCA21 system w.e.f. 21 APR 2016. The additional fee payable on Company e-forms which are due for filing b/w 25 MAR to 30 APR 2016 is relaxed till 10 MAY 2016.

Department of Education, Delhi Govt. invites application from CAs for empanelment for audit of private schools For details, please visit: http://resource.cdn.icai.org/lof2015/source/lof2015.html

CALS, a sister concern of “Grant Thornton (India)”offers cost effective learning for CA Final in an offline mode anytime, anywhere. For details:Toll free number: 1800-1200-560.   Email on info@calearning.in,   www.calearning.in

Key Dates:

Issue of TDS Certificate in case of payment/credit made in March for purchase of property u/s 194A:22/04/2016

Issue of certificate for deduction made in March in DVAT-43: 22/04/2016

“Judge a man by his questions rather than his answers.”

Happiness is a delicate balance between what you want and what you have. It is the  inner joy that can be sought and  caught but can never be taught and bought .

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CORPORATE AND PROFESSIONAL UPDATE APRIL 21, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 21, 2016

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Indirect Tax:

IT: Receipt by the assessee from the HUF of which the assessee was the member – treated as gift received from the relative (group of relatives) – Not Taxable u/s 56 (2) r.w.s. 2(31) – Biravelli Dhanalaxmi Vs. ITO, W-4, Karimnagar (2016 (4) TMI 669 – ITAT Hyderabad)

IT: The question of TDS u/s 194-I does not arise on consideration paid to the Government – the manner in which the amount was quantified and the method of selection of the JV Partner are the crucial determining factors in this case to understand that the said amount could never constitute rent – M/s. Tril Info Park Ltd. Vs. ITO, W-1 (2016 (4) TMI 674 - Madras High Court)

INDIRECT TAX:

ST: Services which are supporting in nature to the main business like services relating to customer relationship telemarketing office infrastructure etc. are covered under Business Support Service – T.V. Today Network Pvt. Ltd. Vs. CCE, Delhi (2016 (4) TMI 690 – CESTAT New Delhi)

VAT & ST: In case of different stand taken by the department by rejecting its own order the exemption of entertainment tax is granted from the date of release of movie and not from the date of issuance of Government Order – Sushanth Prasad Vs. CCT (2016 (4) TMI 679 – Madras High Court)

 

COMPANY LAW:

MCA has released the list of few Frequently Asked Questions on the various issues related to the MCA website. An attempt has been made by MCA to clarify and all Stakeholders are requested to make note of the common queries. Stakeholders are also requested not to raise duplicate Helpdesk tickets on the issues which have been clarified through these FAQ’s.

OTHER UPDATE:

Small tobacco pouches weighing less than 10 grams not subject to retail sale price based assessment. [CCE, vs. Shakti Zarda Factory (India) Pvt. Ltd. (CESTAT New Delhi)].

Today (21.04.16) is the last date for deposit of ESI, DVAT & CST for the month of March, 2016.

Apply online through recruitment link of www.edudel.nic.in

Key Dates:

Payment of ESI of March for ESI: 21/04/2016

Payment of MVAT and WCT TDS for March for MVAT: 21/04/2016

MVAT return for March (10 days extra for e-returns): 21/04/2016

Life becomes interesting when you start speaking silently with your eyes, but life becomes more interesting when someone starts reading those eyes silently.

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CORPORATE AND PROFESSIONAL UPDATE APRIL 17, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 17, 2016
Untitled8 

Direct Tax:

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Royalty : Where on date of agreement entered by assessee, US company, with Indian company for providing data transmission service was in knowledge of Assessing Officer to invoke section 44D still he assessed receipt as royalties under section 9(1)(vi) at rate of 15 per cent, reopening of assessment to tax said receipt at rate of 20 per cent under section 44D was not sustainable – [2016] 68 taxmann.com 51 (Delhi – Trib.)

Very important case, in the pretext of Last Date Fiascos

NSDL releases e-TDS/TCS RPU version 1.5 from FY 2007-08 onwards on 13/04/2016.

SECTION 44BB

NON-RESIDENTS – MINERAL OIL, BUSINESS FOR PROSPECTING/EXPLORATION ETC., IN CASE

Business income : Where assessee, a Norway based company, earned revenue from contract of providing crew on vessel, since entire payments were intricately linked to services rendered in India, assessee was not justified in not offering a part of revenue to tax in India on ground that when ship was beyond 200 nautical miles from Indian shoreline, it could not be presumed to be located in India – [2016] 68 taxmann.com 135 (Delhi – Trib.)

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Adjustment – Method of computation : Where Assessing Officer considered both TNMM and also CPM and Commissioner (Appeals) decided case only under TNMM, inevitable conclusion would be that TNMM was accepted by authorities below as most appropriate method – [2016] 68 taxmann.com62 (Delhi – Trib.)

Comparables and adjustments/Adjustments/CUP/TNMM : Where purchaser, manufacturer as well as intermediary are all AEs and components purchased which constituted 86 per cent of total raw material is imported from intermediary not from manufacturer, job of TPO extends to critically evaluating materials and onus is clearly on assessee to offer a convincing and reasonable explanation – [2016] 68 taxmann.com 55 (Delhi)

Comparables and adjustments/Adjustment – Capacity/utilization : Where adjustments on account of under-utilization of capacity and difference in depreciation are factors which are likely to materially affect price or cost charged or paid, or profit arising from, such transactions in open market, Assessing Officer/TPO should allow adjustments on account of under-utilisation of capacity and also difference in depreciation method adopted by assessee and comparable companies – [2016] 68 taxmann.com 50 (Hyderabad – Trib.)

SECTION 94A

TRANSFER PRICING – TRANSACTIONS WITH PERSONS LOCATED IN NOTIFIED JURISDICTIONAL AREA

India and Cyprus entered into an agreement to avoid double taxation of income and prevention of fiscal evasion since December 1994. The impugned section 94-A (1) was notified by India, as there was no information flow from Cyprus. Petitioners filed nine petitions, challenging legality of section 94-A(1), on ground that it conferred sweeping powers upon the central government to specify any country as a notified jurisdictional area in relation to transactions entered into by any assessee, irrespective of whether such country is one, with whom a bilateral treaty has already been entered into. – [2016] 68 taxmann.com 182 (Madras)

IT : Where delay of a day in filing return was only due to technical snags of website of department on last date of filing return, such delay was to be condoned; claim of carry forward of losses could not be denied[2016] 68 taxmann.com 93 (Madras)

Regen Infrastructure & Services (P.) Ltd. v. Central Board of Direct Taxes, New Delhi* Section 139, read with section 80, of the Income-tax Act, 1961 – Return of income (Condonation of delay in filing return) – Assessment year 2010-11 – Assessee filed its return of income late by a day – Assessee’s claim of carry forward loss was not granted by department – Assessee approached CBDT and sought for condonation of delay in filing of return and explained that due to last hour rush on last day of filing of return, there were technical snags in website of department and, thus, return could not be uploaded; it could only be uploaded in midnight and, hence, date of filing had been reckoned by department as next day – CBDT rejected petitioner’s contention – Whether since petitioner had not gained anything from delay and had satisfactorily explained reason for delay in filing return, CBDT should have condoned delay of one day in filing return by assessee; mere delay should not defeat claim of assessee – Held, yes [ Para 7] [In favour of assessee]

Sum paid to witness in famous ‘Best Bakery case’ for turning hostile wasn’t unexplained payment
IT :
Where, during proceedings before Supreme Court in famous ‘Best Bakery case’, a VCD was found in which assessee was alleged to have paid money to a witness for becoming hostile and, consequently, Assessing Officer treated said amount as unexplained payment made by assessee on basis of said VCD but did not corroborate said transaction by any other evidence, action of Assessing Officer was not justified [2016] 68 taxmann.com 198 (Ahmedabad – Trib.) Mahendrabhai B. Shrivastav v. Income-tax Officer

Indirect Tax:

SERVICE TAX

SECTION 65(19) : Where under multi-level marketing concept of principal, a distributor earned monthly income in three ways – (a) difference between his purchase price and sale price as his profit margin; (b) commission received depending upon volume of purchases of Amway products; and (c) monthly commission based on volume of sale made by second level distributors, only tast category would be covered by business auxiliary service – [2016] 68taxmann.com 60 (New Delhi – CESTAT)

CBEC exempts service-tax on registration services provided by Govt. For detailed notification, send text message to my number

CBEC issues instructions for discharging of quasi-judicial functions by its officials April 14, 2016 DECISION OF CESTAT FINAL ORDER NO.40344/2016 IN CASE OF COMMISSIONER OF CUSTOMS (IMPORT) V. DO BEST INFOWAY INSTRUCTION F.NO.390/CESTAT/24/2016-JC, DATED 13-4-2016

CENVAT CREDIT RULES

RULE 3 : CENVAT CREDIT – ALLOWANCE

Where assessee, a manufacturer of sugar and molasses in its factory located in remote area, constructed dormitory within factory for stay of technicians/engineers as same may be called as and when if there was a fault in plant or machinery, it was entitled to take cenvat credit on construction services of dormitory – [2016] 68taxmann.com 47 (New Delhi – CESTAT)

CENTRAL EXCISE ACT

CLASSIFICATION – MEDICAMENT: There is distinction between house mark and product mark; a monograph on ‘ayurvedic medicine’, which only identifies manufacturer would not make such medicine a ‘patent or proprietary medicine’ and therefore, said medicine continues to be exempt from duty – [2016] 68 taxmann.com 54 (New Delhi – CESTAT)

INTEREST – ON DELAYED REFUNDS  : There is no provision for payment of interest on ‘delayed payment of interest on refunds’ in Customs/Central Excise/Service Tax law or rules made thereunder and grant of interest by High Courts under its discretionary writ jurisdiction cannot be relied upon by Tribunal to grant similar interest – [2016] 68 taxmann.com 137 (New Delhi – CESTAT)

CENTRAL EXCISE RULES

ASSESSMENT – CENTRAL EXCISE – PROVISIONAL ASSESSMENT : Upon finalization of provisional assessments, assessee is entitled for adjustment of excess paid duty/tax with short-paid duty/tax during period of provisional assessments – [2016] 68 taxmann.com 136 (Bangalore – CESTAT)

COMPETITION ACT

PROHIBITION OF AGREEMENTS – ANTI-COMPETITIVE AGREEMENTS

SECTION 3 : Where OP-drug manufacturer and Distributors Association refused to supply medicines to informant stockist, imposed condition on informant not to seller or supply products out side area allotted to it and appointed new distributor to its detriment, conduct of OP would be anti-competitive – [2016] 68 taxmann.com 63 (CCI)

KEY DATES:

  • Payment of ESI of March for ESI: 21/04/2016
  • Payment of MVAT and WCT TDS for March for MVAT: 21/04/2016
  • MVAT return for March (10 days extra for e-returns): 21/04/2016

“समय  सीमा  पर  काम  ख़तम  कर  लेना  काफी  नहीं  है, मैं  समय  सीमा  से  पहले  काम  ख़तम  होने  की  अपेक्षा  करता  हूँ|” ~धीरूभाई अंबानी

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CORPORATE AND PROFESSIONAL UPDATE APRIL 16, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 16, 2016
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Direct Tax:

IT: Interest income received by the club from fixed deposit in bank cannot be form the house property and consequently this income is from other sources – there is no principle of mutuality – Patna Golf Club Ltd. Vs. CIT, Patna (2016 (4) TMI 530 – Patna High Court)

IT: Section 142 of the Act of 1961 allows the assessing officer to make an enquiry before the assessment – AO cannot invoke the provisions of Section 142(1) after an order u/s 143(3)(ii) – Warren Tea Ltd. Vs. ACIT, Cir-5, Kolkata (2016 (4) TMI 529 – Calcutta High Court)

All ITRs including ITR 6 and ITR-7 for A.Y. 2016-17 are available for E-Filling, NSDL releases e-TDS/TCS RPU version 1.5 from FY 2007-08 onwards on 13/04/2016.

Invoking the provisions of Section 142(1) – Could the assessing officer invoke the provisions of Section 142(1) after an order under Section 143(3)(ii) by the appellate forum? – Held that – Section 142 of the Act of 1961 allows the assessing officer to make an enquiry before the assessment. In the present case the assessment was contemplated under Section 143(3)(ii) of the Act of 1961 prior to the issuance of the notice under Section 142 of the Act of 1961. In fact the appellate authority has also proceeded on the basis of the provisions of Section 143(3)(ii) of the Act of 1961. In such circumstances it would not be permissible for the assessing officer to reopen the assessment for the relevant financial year after having assessed it under Section 143(3)(ii) of the Act of 1961.( M/s. Warren Tea Limited Versus Assistant Commissioner of Income Tax, Circle-5, Kolkata & Others .) – 2016 (4) TMI 529 – CALCUTTA HIGH COURT

CBDT has released ITR before the start of the A.Y. for the A.Y. 2016-17 and released e-filing utility of all the ITRs within 15 days from the start of A.Y.

CBEC issued instructions to its office that file and notes on the file should not only be concise but should also contain the details of minutes recorded in a case. Fixing/ re-fixing of personal hearing is a vital step towards the disposal of the case by the quasi judicial / appellate authority.

Indirect Tax:

Seeks to amend Notification No. 25/2012- Service Tax dated 20.06.2012, so as to exempt from Service Tax, certain services provided by Government or a local authority to business entity-Notification No. 22/2016-Service Tax dt. 13-04-2016 -

Seeks to amend rule 6 sub-rule (2), of Service Tax (Determination of Value) Rules, 2006 Notification No. 23/2016-Service Tax dt. 13-04-2016 -

Seeks to amend rule 7 of Point of Taxation Rules, 2011 Notification No. 24/2016-Service Tax dt. 13-04-2016 –

DVAT amendment in Form 16, 17, 30, 31 w.e.f. 12.04.2016 under DVAT (Amendment) Rules, 2016.

Activity of deputation of employees to group companies – Manufacturer of pharmaceutical products and having their own marketing network – Whether marketing network services provided by appellant to its group companies comes under Business auxiliary Services – Recovery of expenses in return – Held that – as per the contract, the appellant is only deputing the employees to the group companies and said employees are called back after the job is completed and utilized in the activity of the appellant or deputed to any other group company. So the claim of revenue that such activity would fall under the Business Auxiliary Services , has no lows-standing (Franco Indian Pharmaceutical (P) Ltd. Versus Commissioner of Service Tax, Mumbai.) – 2016 (4) TMI 496 – CESTAT MUMBAI

ST: Activity of deputation of employees to group companies – No Marketing network services provided to group companies – recovery of expenses in return do not comes under Business Auxiliary Services – not taxable– Franco Indian Pharmaceutical Pvt. Ltd. Vs. CST, Mumbai (2016 (4) TMI 496 – CESTAT Mumbai)

VAT & Sales Tax: Works contract – a fundamental mistake which is committed by the authorities below is that foundation work or installation work which is even considered as part of works contract by the Assessing Officer himself cannot be treated as goods – Enercon India Ltd. Vs. State of Karnataka (2016 (4) TMI 483 – Supreme Court)

DVAT has amended Form DVAT-16, 17, 30 & 31 w.e.f. 12 APR 2016.

FAQ on Company Law:

Query:  If a Company appoints First Auditor than any ROC compliance is required by Company in this respect. Kindly clarify?

Answer:  No, a Company is not required to file Form ADT-1 (ROC Compliance) in case of appointing first auditors of the Company.

RBI Update:

RBI has issued notification dated 13/04/2016 regarding Overseas Direct Investment (ODI) by Resident Individuals wherein RBI has rationalized and revised Form ODI which now comprises of Five sections instead of six sections.

Nidhi company is the cheapest and easiest form of NBFC. It is very easy form to register and does not require much capital. Anybody can register a Nidhi company with only 5 lakh capital and 7 members.

Key Dates:

  • Payment of ESI of March for ESI: 21/04/2016
  • Payment of MVAT and WCT TDS for March for MVAT: 21/04/2016
  • MVAT return for March (10 days extra for e-returns): 21/04/2016

 “Each morning we are born again. What we do today is what matters most.” ~ Gautam Buddha

“If you have a burning desire and a plan to take actions, there is absolutely nothing you cannot achieve.”

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