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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CORPORATE AND PROFESSIONAL UPDATE MARCH 27, 2017

Professional Update For the Day:

1 (2)

Direct Tax:

Provision made by the assessee for payment of any gratuity, that has become payable during the year is allowable. In fact the CBDT has also clarified the introduction of section 40A(7) that the provision made for payment of gratuity that has become payable during previous year is allowable. Therefore the liability accrued on account of the gratuity which became payable during the year on account of the employees who retired during the year itself is allowable  [DCIT Vs M/s. Reliance Jute Mills International Ltd (ITAT Kolkata) ]

CBDT Stipulates Guidelines For Waiver Of Interest Charged U/s 201(1A)(i) Of The Income-Tax Act, 1961 For TDS Default.  Circular No. 11/2017 dated 24.03.2017.

Insurance & Travelling Expenses incurred in Foreign Currency needs to be Excluded from both Export and Total Turnover for the purpose of section 10A Calculations. [M/s. Sunquest Information Systems India Pvt. Ltd. Vs JCIT (OSD) (ITAT Bangalore)]

Indirect Tax:

CESTAT holds that exemption accorded to small scale industries under Notification No. 8/2001-CE cannot be denied because brand name used by assessee is registered with another person; CESTAT observes that such denial would constrain the exemption Notification and would be perilous for any small unit to use a brand unless registered in own name [TS-57-CESTAT-2017-EXC]

Finance ministry on Saturday approved the re-organisation of the indirect tax wing renaming the Central Board of Excise and Customs (CBEC) as the Central Board of Indirect Taxes and Customs (CBIC).

FAQ on GST: 

Query: If taxable person affects inter state supplies, can he availed composition scheme?

 Answer: If taxable person does not affects inter state supplies,then he cannot avail composition scheme.

GST Update

GST Provisional IDs not used till 31.3.17 may be cancelled as not needed. All existing indirect tax assessees migrate to GST by 31st March, 2017.

The CBIC will have 21 zones, 101 GST tax payer services commissionerates comprising 15 sub-commissionerates, 768 divisions, 3,969 ranges, 49 audit comm and 50 appeals Commissionerates.

RBI UPDATE

RBI issued notification that All Agency Banks to remain open for public on all days from March 25, 2017 to April 1, 2017.

Other Update

ICAI invites applications for suitable positions at various levels for Financial Reporting Domain of its Technical Directorate on full time / contractual basis for its Mumbai location. www.icai.org

The Ministry of Labour and Employment has notified the draft Contract Labour (Regulation and Abolition) Central Amendment Rules, 2017. It provides employers to pay wages to its employees through cheque or e-payment.

The Comptroller and Auditor General of India (CAG) plans to audit the impact of note ban and the affect it has had on government tax revenues, said CAG Shashi Kant Sharma.

Key Due Dates:

Important dates for March 2017:

  • 6 March  : Service tax monthly deposit other than Ind, HUF & P.Firm
  • 7 March  : TDS/ TCS deposit
  • 15 March : Deposit of PF
  • 15 March : Payment of Advance Tax
  • 20 March : Monthly UP VAT return & tax
  • 21 March : Deposit of ESI
  • 31 March : E-payment of service Tax by all assesses Monthly/ Quarterly
  • 31 March : Filing of Belated Income Tax returns for the A/Y 15-16 & A/Y 16-17
  • Return of TDS for dec quarter in DVAT 48 : 17:03:2017
  • E payment of DVAT & CST tax for Feb : 21:03:2017
  • Date of filing of DVAT Return in Form 16,17, and 48 for Q-3 , 2016-17 has been extended upto 31.03.2017 vide circular 28 dated 17.03.2017.
  • E payment of service tax for quarter ended march : 31:03:2017
  • E payment of excise duty for quarter ended : 31:03:2017
  • Filing of ITR for AY 2016-17 without penalty & AY 2015-16 with penalty of 5000 : 31:03:2017
  • Payment of balance Advanve income tax by ALL (sec 234B&234C) : 31:03:2017
  • Issue of DVAT certificate for deduction made in feb : 22.03.2017

There is a thin line dividing self-confidence and overconfidence. Hence, be careful.

Self-confidence is key to success. It’s four components are: Feel Good, Take Responsibility, Be Accountable and Develop Skills.

Life isn’t about getting and having, it’s about giving and being.

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 011-23343333 / 9555555480

We look forward for your valuable comments. www.carajput.com   Continue reading

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 15, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 15, 2016

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The Reserve Bank of India (RBI), it seems, has finally lent ear to millions of such prospective account holders. It has simplified the KYC documentation to make account opening less onerous.

Moving ‘The Real Estate (Regulation and Development) Bill, 2015′ for consideration and passage, Urban Development Minister M Venkaiah Naidu said it aims to protect the interests of buyers and bring more transparency in the sector.

RBI has issued Know Your Customer Direction, 2016 for all Banks or entities licensed u/s 22 of Banking Regulation Act, 1949, Etc.

Govt. approves guidelines to promote electronic payments

Central Government issues instructions for reduction of government litigation through withdrawal of appeal by the department before CESTAT by instruction no. F.No.390/Misc./163/2010-JC-

Income Tax: TDS u/s 195 – the assessee can not be said to have paid the consideration for use of or the right to use copyright but has simply purchased the copyrighted work embedded in the CD- ROM which can be said to be sale of ‘good’ by the owner. The consideration paid by the assessee thus as per the clauses of DTAA can not be said to be royalty

EPS: The Union Govt. after exempting EPF, considering a proposal to make it mandatory for Employer to route most of its saving to Employee Pension Scheme (EPS) a move for creating pensioned society.

TRANSFER PRICING - COMPUTATION OF ARM’S LENGTH PRICE: Where assessee had benchmarked its international transactions on TNMM basis and TPO had neither disputed assessee’s claim that TNMM was most appropriate method, nor comparables selected by assessee, it was not open for TPO to reject benchmarking done by assessee and make adhoc ALP additions in value of international transactions – [2016] 67 16 (Mumbai – Trib.)

6% Tax on online advertisement / Google Tax, Such provisions are applicable from 1st June, 2016.The levy clearly is targeted to tax various online advertisements companies like YouTube , Google , Facebook , Twitter etc.

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 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE JANUARY 9, 2016

CORPORATE AND PROFESSIONAL UPDATE JANUARY 9, 2016Untitled280INCOME TAX ACT

SECTION 9

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Fee for technical services : Where in earlier years, consideration received by assessee Swede company for supply of telecom equipments as not taxable, while in current year Tribunal had recorded that Commissioner (Appeals)’s order was bad as he did not confront assessee with new material gathered during survey, Tribunal ought to have remanded matter back to Commissioner (Appeals) for readjudication of facts; it should not have itself appreciated facts.

SECTION 10B

EXPORT ORIENTED UNDERTAKING

Computation of exemption : Where sale price of export was credited to bank account as per existing exchange rate, foreign exchange gain/loss subsequent to receipt of sale proceed was not eligible for exemption under section 10B.

Computation of : Where an amount from a foreign customer was not received into India and said amount was adjusted for purchase of an item from said foreign party, impugned amount was liable to be excluded from export turnover for purpose of computation of exemption under section 10B.

SECTION 37(1)

BUSINESS EXPENDITURE – ALLOWABILITY OF FILM PRODUCTION

Where assessee acquired rights for exhibition of films on minimum guarantee basis which did not complete commercial run of 180 days during preceding financial year, in terms of Explanation to sub-rule (1) of rule 9B, minimum guarantee amount excluding expenditure incurred on preparation of positive prints and expenditure incurred in connection with advertisement of films, was to be considered to be cost of acquisition of distribution rights of films which could be carried forward for amortization.

SECTION 40A (3)

BUSINESS DISALLOWANCE – CASH PAYMENTS EXCEEDING PRESCRIBED LIMITS

Business exigencies : Where assessee made cash payments to film producers in excess of Rs. ten thousand, in view of fact that said payments were made due to business exigencies and, moreover, genuineness of same was never disputed, impugned disallowance made under section 40A(3) was to be deleted.

SECTION 80-IC

DEDUCTIONS – SPECIAL PROVISIONS IN RESPECT OF CERTAIN UNDERTAKINGS OR ENTERPRISES IN CERTAIN SPECIAL CATEGORY STATES

Interest : Where assessee, a manufacturer of shampoo products, received interest on fixed deposits with bank under section 80-IC on amount of interest, Assessing Officer should examine nature of interest and decide issue of granting section 80-IC deduction.

Where assessee after using material, had sold packing materials/scrap and aggregate amount of scrap sale was credited to profit and loss account (thereby reducing cost of material), amount derived by sale of scrap was eligible for deduction under section 80-IC.

SECTION 145

METHOD OF ACCOUNTING – ESTIMATION OF INCOME

Work in progress : Where Commissioner came to conclusion that assessee incurred work in progress expenditure of Rs. 47.59 crores and raised a bill of Rs. 48.06 crores and difference between two was profit, whereas assessee submitted that amount of Rs. 48.06 crores was bill amount raised by customers, Commissioner proceeded on misunderstood facts and accordingly revision order could not be sustained.

COMPETITION ACT

SECTION 3

PROHIBITION OF AGREEMENTS – ANTI-COMPETITIVE AGREEMENTS

Where OP was limiting and controlling services of dumpers inside prohibited area of Paradip Port denying said services to informant and other stevedores, act of OP was anti-competitive.

SECTION 4

PROHIBITION OF ABUSE OF DOMINANT POSITION

Where OP was a facilitator between licensed stevedores and owners of dumpers for handling of cargo, it would not be an enterprise and its conduct could not be examined in respect of abuse of dominant position.

CENVAT CREDIT RULES

RULE 2 (l)

CENVAT CREDIT – INPUT SERVICE

Exporter is eligible to take credit of ‘banking and other financial services’ used in connection with their export activities of finished excisable goods.

STATUTES

CORPORATE LAWS

SEBI (Delisting of Equity Shares) (Amendment) Regulations, 2016 – Amendment in Regulation 27 -NOTIFICATION NO.SEBI/LAD-NRO/GN/2015-16/30, DATED 12-1-2016

INDIRECT TAX LAWS (ST/CE. & CUS/ CST & VAT)

General Guidelines for Implementation of E-Payment of Refund/Rebate – CIRCULAR NO.1013/1/2016-CX, DATED 12-1-2016

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 011-233 433 33

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CORPORATE AND PROFESSIONAL UPDATE JANUARY 5, 2016

CORPORATE AND PROFESSIONAL UPDATE JANUARY 5, 2016

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INCOME TAX ACT

SECTION 2(22)

DEEMED DIVIDEND

Loans and advances to shareholders : SLP dismissed against High Court’s order wherein it was held that amount advanced to assessee-partner by firm could not be taxed as deemed dividend merely on ground that some amount lying in firm’s account was collected by firm on behalf of company of which assessee was a MD-cum-shareholder

SECTION 5

INCOME – ACCRUAL OF

Interest on share application money : Interest earned on application money deposited in bank is taxable in year of allotment of shares –

SECTION 10B

EXPORT ORIENTED UNDERTAKING

Reconstruction of business: Where Assessing Officer disallowed assessee’s claim for deduction under section 10B on plea that assessee was formed by reconstruction of business of one ‘F’ and Commissioner (Appeals) allowed claim of deduction holding that there was no transfer of old plant and machinery by ‘F’ to assessee and manufacturing activity carried on by assessee was by use of new plant and machinery, since said findings had not been rebutted by revenue, order of Commissioner (Appeals) deserved to be upheld

Manufacture activity: Where assessee imported standard gold into India and then converted it into jewellery or ornaments and exported those ornaments, said activity amounted to manufacture/production of articles or things for export which qualified for deduction under section 10B

SECTION 32

DEPRECIATION – ALLOWANCE/RATE OF

ReassessmentWhere while sending proposal for approval of reassessment, Assessing Officer maintained that audit objection raised by audit party that assessee being contractor, depreciation on dumper, lorries, etc. could not be allowed at rate of 30 per cent but at 15 per cent, was not acceptable, but he recorded said objection as reason to believe, re-assessment was not valid

SECTION 36(1)(iii)

INTEREST ON BORROWED CAPITAL

Applicability of : Where assessee advanced money to unrelated company ‘V’ for purchase of a property and money was retained by company ‘V’ till legal notice was sent, same could not be said to be an interest free loan or advance for disallowing interest under section 36(1)(iii)

SECTION 37(1)

BUSINESS EXPENDITURE – ALLOWABILITY OF

Penalty : Where in respect of contract for providing coverage of Commonwealth Games, assessee had to pay certain amount to PrasarBharati as performance bank guarantee on account of inadequate performance of said contract, it was to be allowed as deduction under section 37(1)

SECTION 50C

CAPITAL GAINS – SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES

Applicability of : Substitution of ‘full value of consideration received’ with ‘stamp value’ in terms of section 50C is applicable only in hands of seller of property who has to compute capital gain under section 48 pursuant to transfer of a capital asset

SECTION 56

INCOME FROM OTHER SOURCES – CHARGEABLE AS

Gifts : Section 56(2)(vii) is applicable on cases in which individual or HUF receives immovable property on or after 1-10-2009 and, therefore, where property was purchased by assessee in financial year 2007-08, mandate of section 56(2)(vii) could not be applied retrospectively

SECTION 69A

UNEXPLAINED MONEY

Firm, in case of : Where in support of capital introduced by partners of firm, assessee filed additional evidence before Tribunal in shape of confirmations from both partners and source of capital introduced by them with help of their bank pass books, since said evidence was not available before authorities below, matter was to be remanded back for disposal afresh

SECTION 69B

UNDISCLOSED INVESTMENTS

Immovable property : In case of purchase of property by assessee, in absence of any positive material on record, mere higher value of property estimated by DVO or Registered valuer could not form basis for making addition under section 69B

SECTION 73

LOSSES – IN SPECULATION BUSINESS

Raising of claim : Mere fact that assessee has not disclosed speculative loss in specified column of return would not give right to revenue authorities to disallow claim of assessee of set off of brought forward loss

SECTION 194A

DEDUCTION OF TAX AT SOURCE – INTEREST OTHER THAN INTEREST ON SECURITIES

None of the State or Central enactments make any distinction between a co-operative society engaged in carrying on banking business and a co-operative bank. Section 7(1) of the Banking Regulation Act,1949 which obliges co-operative society carrying on the business of banking to use the words “bank”, “banker” or “banking” as part of its name clinches the issue. Therefore, a co-operative bank will be covered under the category “co-operative society engaged in carrying on banking business” and will be exempt from deducting TDS u/s 194A only if interest paid does not exceed the limit of Rs.10,000 during the financial year as specified in section 194A. A co-operative bank cannot avail the general unlimited exemption from TDS on interest u/s 194A available to co-operative societies

SECTION 253

APPELLATE TRIBUNAL – APPEALS TO

Scope of : In case of order passed by DRP, right to file an appeal by department does not extend to a point decided either way by Assessing Officer/TPO himself, which remains intact even after direction given by DRP

INTEREST-TAX ACT

SECTION 2(7)

INTEREST

Delayed payment of bills of exchange : Interest payable on default in payment of amounts due under a discounted bill of exchange being a compensation amount received by bank for delayed payment of bills of exchange, is not chargeable as interest under Interest Tax Act)

WEALTH-TAX ACT

SECTION 34AB

VALUER, REGISTERED – REGISTRATION OF VALUER

To get registration as a ‘valuer of immovable property’ under section 34AB of Wealth-tax Act it is not necessary for applicant to gain experience of ten years as consulting engineer or valuer under Wealth-tax Rules, after acquisition of educational qualifications; experience gained prior thereto can also be considered for that purpose

COMPANIES ACT

SECTION 403

OPPRESSION AND MISMANAGEMENT

Where son with a view to defraud his father collided with directors of father’s old company and claimed possession of company’s properties, CLB was justified in directing removal of directors of old company to handover charge of company’s properties and assets to its newly appointed directors

SECURITIES CONTRACTS (REGULATION) ACT

SECTION 2(j)

STOCK EXCHANGE – PETITIONER WAS A STOCK EXCHANGE

Where in a money suit filed by respondent company, petitioner stock exchange filed application seeking to summon record of business transactions of respondent-company, application was to be dismissed as documents were not relevant having regard to nature of suit

SERVICE TAX ACT

SECTION 65(3)

TAXABLE SERVICES – ADVERTISING AGENCY’S SERVICES

 Where assessee : (a) took certain prominent places in city on rental basis, (b) installed infrastructure/boards thereon, (c) displayed advertisement of clients in form of billboards thereon, and (d) collected rent for such display, then, said rental could not be charged to service tax under ‘advertising agency’s services’

SECTION 65(12)

TAXABLE SERVICES – BANKING AND OTHER FINANCIAL SERVICES

Mark-up earned by credit card companies on foreign currency conversion in case of cardholders visiting outside India, is not taxable under Banking and Other Financial Services. Moreover, same is a service received, rendered and consumed abroad and accordingly, outside scope of service tax in India

CENTRAL EXCISE ACT

SECTION 11B

LEVY AND COLLECTION OF DUTY – CLAIM FOR REFUND OF DUTY

Where assessee’s refund claim filed within period of limitation was rejected by both probable jurisdictional Commissionerates, such rejection was unsustainable

SECTION 35C

APPEALS – RECTIFICATION OF MISTAKES/REVIEW – APPELLATE TRIBUNAL

Non-consideration of issue of time-bar raised by assessee would amount to a mistake apparent from record and same can be rectified by Tribunal and would not amount to ‘re-appreciation of evidence’

CENVAT CREDIT RULES

RULE 5

CENVAT CREDIT – REFUND OF

Where assessee, a provider of rent-a-cab service and outdoor catering service, claimed refund of cenvat credit against export of service, payment received by assessee in Indian rupees through foreign bank was receipt of payment in convertible foreign exchange and further above services would qualify as input service – [2016] 65taxmann.com 7 (Mumbai – CESTAT)

STATUTES

CORPORATE LAWS

Enemy Property (Amendment and Validation) Ordinance, 2016

Setting up of IFSC Banking Units (IBUS) – Permissible Activities

Non-Fund based Facility to Non-Constituent Borrowers of Bank

Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by FIS – Amendment in Master Circular DBR.No.FID.FIC.3/01.02.00/2015-16, Dated 1-7-2015

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CORPORATE AND PROFESSIONAL UPDATE JANUARY 03, 2016

CORPORATE AND PROFESSIONAL UPDATE JANUARY 03, 2016

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INCOME TAX ACT

SECTION 9

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Permanent establishment : Where assessee’s branch office, which was considered as assessee’s PE in India, was compensated at arm’s length for performing services in respect of direct sales made by assessee in India, no part of assessee’s profit could be taxed in India as profit attributable to Indian PE.

SECTION 36(1)(ii)

BONUS OR COMMISSION

Director’s Commission: When directors of assessee company had given services and in recognition thereof, there was payment of commission to them, it could not be questioned merely on basis of speculation by revenue that same was to avoid payment of dividend tax and, consequently, impugned disallowance made under section 36(1)(ii) deserved to be deleted.

SECTION 37(1)

BUSINESS EXPENDITURE – ALLOWABILITY OF

Revision: Where Assessing Officer granted deduction on account of lease rentals to assessee in pursuance of directions of DRP, but Commissioner revised said order without recording as to how assessment order was erroneous, revision was unjustified

SECTION 44BB

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

Conditions precedentIf Assessing Officer finds that assessee had a PE in India during relevant period and that contract entered into by assessee with contractor were effectively connected with assessee’s PE in India, then income of assessee would be computed under section 44B(1)

SECTION 80P

DEDUCTIONS – INCOME OF CO-OPERATIVE SOCIETIES

Co-operative bank : In event of dispute as to primary object or principal business of co-operative society referred to in clauses (cciv), (ccv) and (ccvi) of section 56 of Banking Regulation Act, determination thereof by RBI shall be final before revenue authorities can term said society as a co-operative bank for purpose of section 80P

SECTION 90

DOUBLE TAXATION RELIEF – WHERE AGREEMENT EXISTS

Overseas taxes paid by assessee abroad were not eligible for relief under section 90

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Adjustment –General : Where in transfer pricing proceedings, Assessing Officer as well as Commissioner (Appeals) failed to apply their mind to TP report filed by assessee, or to any other material or information or document furnished, impugned addition made to assessee’s ALP merely on basis of proposal made by TPO was not sustainable

SECTION 154

RECTIFICATION OF MISTAKE – APPARENT FROM RECORDS

Limitation: Once an order is amended to give effect to appellate order, period of limitation under section 154 would commence from amended order and not from original order

SECTION 194A

DEDUCTION OF TAX AT SOURCE – INTEREST OTHER THAN INTEREST ON SECURITIES

Revision : Where Assessing Officer held that assessee-employees’ thrift fund was not liable to deduct TDS under section 194A(3)(v) while making interest payment to its member, since said order merged with order of Commissioner (Appeals) and moreover, said view was one of possible views, same could not be set aside in revision

SARFAESI ACT

SECTION 13

ENFORCEMENT OF SECURITY INTEREST

Where efficacious statutory remedy of appeal under section 17 was available to appellant-purchaser of property, against notice under section 13(4) and he had already availed same, instant writ petition before High Court against order of Chief Judicial Magistrate appointing receiver to take possession of property in question under section 14 would not be maintainable

MAHARASHTRA MUNICIPAL CORPORATION ACT

SECTION 2(25)

GOODS

Where appellant was conducting business of providing pre-printed meal vouchers, i.e., Sodexo Meal Vouchers, to its customers, said vouchers were not goods within meaning of section 2(15) of Maharashtra Municipal Corporation Act and, therefore, not liable for either octroi or local body tax

CONSTITUTION OF INDIA

ARTICLE 226

WRIT PETITION – ALTERNATIVE REMEDY

Where adjudication order has been passed without giving reasons, same violates principles of natural justice and, therefore, same can be set aside in writ jurisdiction despite alternate appeal remedy

SERVICE TAX

SECTION 67

VALUATION OF TAXABLE SERVICES – GENERAL

Service tax is payable on gross consideration without setting off receivables/payables in respect of other transactions

EXPORT OF SERVICES RULES

RULE 3

EXPORT – COURIER SERVICES

Activity of collection/delivery of export/import consignments booked by other Indian/foreign courier agencies, also amounts to courier services, as it also involves time-sensitive transport of document/things; it cannot be classified as Business Support Services. Where such delivery/collection is performed in India, courier services cannot be regarded as exported, even if consideration is received in foreign currency

CENVAT EXCISE RULES

RULE 26

PENALTY – ON PERSONS DEALING WITH GOODS LIABLE TO CONFISCATION

Issuance of false certificate by a Chartered Accountant in relation to huge cash found with manufacturer, may attract penalty for money laundering or giving false evidence; however, same cannot attract penalty under rule 26 or 27 of Central Excise Rules, 2002

CENVAT CREDIT RULES

RULE 6

CENVAT CREDIT – EXEMPTED AND DUTIABLE GOODS OR EXEMPTED AND TAXABLE SERVICES, OBLIGATION OF ASSESSEE

There is no bar for making as per prescribed percentage payment on value of exempted services for prior period where it may not be feasible to segregate quantum of input services pertaining to dutiable & exempted services

STATUTES

DIRECT TAX LAWS

Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 – Declarations and Payments made under said Act

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CORPORATE TAX UPDATE 26th OCTOBER 2015

CORPORATE TAX UPDATE FOR 26th OCTOBER 2015

Untitled5ABlack money: I-T dept begins action against mining companies
Oct 19, 2015
In a bid to attack domestic black money, the government has set sights on India’s vast mining sector. The Central Board of Direct Taxes (CBDT) under the finance ministry has instructed income tax (I-T) officials to scrutinise production details and tax returns filed by the companies engaged in mining activities and take appropriate action in case of any discrepancy.

Source : http://www.business-standard.com/article/economy-policy/black-money-i-t-dept-begins-action-against-mining-companies-115101900043_1.html

Let’s make taxation more transparent, investor-friendly: RBI Governor Rajan
Oct 19, 2015
Reserve Bank of India (RBI) Governor Raghuram Rajan on Monday underlined the need to make taxation more transparent so that the Indian economy is able to attract stable inflow of foreign capital for strong growth. He also called for more coordination between leading central banks, saying there is a need for more optimal use of the monetary policy tools globally as the world is increasingly staring at deflation.

Source: http://indianexpress.com/article/business/economy/lets-make-taxation-more-transparent-investor-friendly-rbi-governor-rajan/

RBI Guv Raghuram Rajan urges IMF to act against ‘extreme’ policies
Oct 19, 2015
RBI governor Raghuram Rajan urged the International Monetary Fund on Monday to stop “sitting on the sidelines” and instead play an active role in questioning the easy money policies adopted by developed economies. Raghuram Rajan, a former chief economist of the IMF, said countries were putting these policies in place without consideration for the negative impact they have on the global economy.

Source : http://www.financialexpress.com/article/economy/rbi-guv-raghuram-rajan-says-world-needs-stronger-multilateral-agencies/153416/

FinMin seeks India Inc views on certain GST provisions
Oct 19, 2015
Finance Ministry has sought views of India Inc on firming up provisions with regard to Place of Supply (PoS) rules in five sectors, including e-commerce and banking, for smooth roll out of the Goods and Services Tax.The ministry has asked industry associations to submit their views on the transitional provisions and core exemptions to ensure hassle free implementation of the new indirect tax regime, a government official told PTI.

Source: http://www.financialexpress.com/article/economy/finmin-seeks-india-inc-views-on-certain-gst-provisions/152996/

IT second-most favoured sector by fund managers
Oct 19, 2015
Software stocks have regained their second-most favoured status with fund managers.This is the first time since March that fund managers have more assets deployed in information technology (IT) than in automobile stocks.In September, Rs 43,053 crore, or 10.65 per cent of total equity assets, found their way into shares of infotech majors like Infosys, Tata Consultancy Services (TCS), HCL Technologies and Tech Mahindra. On the other hand, Rs 41,239 crore, or 10.2 per cent of equity assets, were held as stocks of automobile companies.

Source : http://www.business-standard.com/article/markets/it-second-most-favoured-sector-by-fund-managers-115101900024_1.html

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 TAX UPDATE FOR THE MONTH

Corporate tax Update for the Month

Untitled94ANo action against black money declarants under FEMA: RBI

  • Oct 2, 2015
    With the compliance window for declaration of offshore assets ending on September 30, the RBI on Thursday clarified that no proceedings would be initiated under the Foreign Exchange Management Act, 1999 (FEMA) against declarants with assets held abroad on which taxes and penalties had been paid under the the Black Money Act. The RBI said no permission would be required under FEMA to dispose of the asset and bring back the proceeds to India through banking channels within 180 days from the date of declaration. In case the declarant wishes to hold the declared asset, she/he may apply to the apex bank within 180 days from the date of declaration if such permission is necessary. The RBI said it would deal with such applications under existing regulations.Source:http://www.thehindubusinessline.com/todays-paper/no-action-against-black-money-declarants-under-fema-rbi/article7686720.ece

 A welcome retro tax move for a change

  • Oct 2, 2015
    The government on Thursday decided to give relief to foreign companies with no ‘place of doing business’ in India from the 18.5% minimum alternate tax demands issued to them, saying that amendments to the tax law to this effect would be brought in very soon. The relief will be available to companies irrespective of whether they are from a country with a tax treaty with India or not. The move could benefit companies such as the US-based Timken facing MAT demands.Source:https://in.finance.yahoo.com/news/welcome-retro-tax-move-change-021100609.html
  • Rupee plunges to 66.16 vs dollar, down 17 paise
    Oct 2, 2015
    Hit by month-end dollar demand from importers, the rupee on Thursday dropped by another 17 paise against the American currency to close at 66.16, extending losses for fourth straight day, amid mixed global cues. Sustained foreign capital outflows also affected the market. Foreign portfolio investors sold shares worth a net Rs 1,330 crore on Wednesday, according to provisional data released by the stock exchanges. The rupee resumed sharply lower at 66.20 a dollar against its overnight level of 65.99 at the Interbank Foreign Exchange market. It hovered in a range of 66.27 to 66.03 during the day, before ending at 66.16 per dollar, showing a loss of 17 paise. The rupee has dropped by 49 paise or 0.75 per cent in four days. The dollar index was down by 0.40 per cent as against a basket of six currencies.Source:http://www.businessstandard.com/article/finance/rupee-plunges-to-66-16-vs-dollar-down-17-paise-115092400821_1.html
  • BILT to sell Malaysia arm for $500 mn
    Oct 2, 2015
    Ballarpur Industries (BILT), an Avantha Group firm, has announced the sale of its Malaysian subsidiary, Sabah Forest Industries (SFI), to Pandawa Sakti (Sabah) Sdn, Malaysia, for $500 million (Rs 3,307 crore). The debt-heavy group had sold Crompton Greaves’ consumer durable business in April for Rs 2,000 crore and a power plant in Korba to Adani Group for Rs 4,200 crore in November 2014. A power plant in Jhabua, Madhya Pradesh, was also on the block and a deal in this regard was expected to be finalised by October, said a senior executive.Source:http://www.businessstandard.com/article/companies/bilt-to-sell-malaysia-arm-for-500-mn-    

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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PROFESSIONAL UPDATE ON MCA, RBI, CBDT, DVAT

Professional update on MCA, RBI, CBDT, DVAT

12MCA

MCA has exempted the Government Companies producing Defense Equipment including the Space Research subject to fulfillment of conditions prescribed relating to Additional information of the General Instruction for preparation of Statement of Profit and Loss in Schedule III of the Companies Act, 2013. The Board of Directors of such Company must give their consent with regard to non-disclosure of information relating to para 5(ii)(a)(1), 5(ii)(a)(2), 5(il)(e), 5(iii), s(viii)(a), 5(viii)(b), 5(viii)(c) and s(viii)(e), as may be applicable and the Company shall disclose in the Notes forming part of the balance sheet and profit and loss account, the fact of grant of exemption under this notification. Further, all such companies shall comply with the prescribed Accounting Standards and shall ensure that its financial statements represent a true and fair state of affairs of its finances. This notification shall be applicable in respect of financial statement prepared in respect of the financial years ending on or after the 31’t March, 20-t6.

MCA has released the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015, which shall come into force from the date of their publication in the Official Gazette. Through these Rules, applicability of Extensible Business Reporting Language (XBRL) and its Taxonomy has been prescribed. Accordingly, all listed companies and their lndian subsidiaries, Companies having paid up capital of rupees five crore or above or turnover of rupees hundred crore or above shall file their financial statement and other documents under section 137 of the Act, with the Registrar in e-form AOC-4 XBRL for the financial years commencing on or after 1st April 2014. Further,  all companies which were hitherto covered under the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2011 shall continue to file their financials in XBRL mode and exemptions have been provided for Banking, lnsurance, Power Sector and Non-Banking Financial companies are exempted from XBRL filing.

MCA has released the Form CRA-4 (Form for filing Cost Audit Report with the Central Government) is available for filing w.e.f11th Sep 2015. A company required to furnish cost audit report and other documents to the Central Government under sub-section (6) of section 148 of the Act and rules made thereunder, shall file such report and other documents using the XBRL taxonomy for the financial years commencing on or after 1st April, 2014 in e-Form CRA-4 specified under the Companies (Cost Records and Audit) Rules, 2014.

CBDT

A Committee on Direct Tax matters chaired by Justice A. P. Shah was constituted with the initial mandate to examine the matter relating to levy of MAT on FIIs/FPIs for the period prior to 01.04.2015. The Committee has submitted its final report on applicability of MAT on FIIs/FPIs for the period prior to 01.04.2015 to the Government on 25.08.2015. The Committee has recommended that section 115JB of the Income-tax Act may be amended to clarify the in-applicability of MAT provisions to FIIs/FPIs. The Government has accepted the recommendation of the Committee to clarify the in-applicability of MAT to FIIs/FPIs and has decided that an appropriate amendment to the Income-tax Act will be carried out. Pending such amendment, CBDT will convey to the field formations the decision of the Government to accept the recommendation.

BDT – Income Tax

Ministry of Finance has clarified through a press release that No Extension of Date for Filing of Returns due by 30th September for Assessment Year 2015-16 for Certain Categories of Assessees including Companies, and Firms and, Individuals Engaged in Proprietary Business/Profession etcwhose Accounts are required to be Audited shall be granted. The audit report is also required to be filed by the said date. The Government has received representations from various stakeholders seeking extension of date for filing of returns and tax audit reports beyond 30th September 2015. The reasons cited are delay in notifying the returns and related delay in availability of forms on the e-filing website. After consideration of all facts, it has been decided that the last date for filing of returns due by 30th September 2015 will not be extended. Taxpayers are advised to file their returns well in time to avoid last minute rush.

DVAT

DVAT Authorities have designed and developed a new simplified online form namely Form Delhi Sugam-2 (in short ‘DS2,) in place of Form T-2 for providing information to the Department in respect of goods purchased or received as stock transfer or received on consignment agreement from outside by the registered dealers of Delhi. All dealers are now instructed that the details of Invoices and Goods Receipt (GR) Notes in respect of all goods purchased or received as stock transfer or received on consignment agreement basis from outside Delhi shall be submitted online, in Form Delhi Sugam-2 (DS2), before physical entry of the goods in Delhi. This Notification shall come into force with effect from the 15th September, 2015 in supersession of all previous notifications on this subject.

NCLT / NCLAT

In continuation of the Ministry’s circular dated 10-08-2015, the MCA has extended the last date of receipt of applications for the post of Technical Member (2 Post) in NCLATJudicial Member (18 Post) in NCLT and Technical Member (10 Post) in NCLT from 01-09-2015 to 28-09-2015. Those who have already applied earlier are need not required to apply again and other terms and conditions will remain the same.

RBI

RBI has decided to grant “in-principle” approval to the 10 applicants to set up small finance banks under the “Guidelines for Licensing of Small Finance Banks in the private sector” (Guidelines) issued on November 27, 2014. The “in-principle” approval granted will be valid for 18 months to enable the applicants to comply with the requirements under the Guidelines and fulfill other conditions as may be stipulated by the RBI. On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of “in-principle” approval, the RBI would consider granting them a license for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a regular license is issued, the applicants cannot undertake any banking business.

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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