All about form DIR-3 KYC

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As part of updating its registry, MCA would be conducting KYC of all Directors of companies annually through a new e-form viz. DIR-3 KYC as per new The Companies (Appointment and Qualification of Directors) Rules, 2014.

Today, E-form DIR-3 KYC now is on Portal of Ministry of Corporate Affairs(MCA).

New The Companies (Appointment and Qualification of Directors) Rules, 2014 Law:

E-Form DIR-3 KYC is required to be filed pursuant to Rule 12A and Rule 11(2) and (3) of The Companies (Appointment and Qualification of Directors) Rules, 2014.

According to rule 12A. following persons have to fill the e-form DIR-3 KYC:-

  • Every individual who has been allotted a Director Identification Number (DIN) as on 31st March of a financial year. Due date of filing e-form DIR-3 KYC On or before 30th April of immediate next Financial Year.
  • Every individual who has already been allotted a DIN as at 31st March, 2018 and whose DIN status is ‘Approved’. Due date of filing e-form DIR-3 KYC for them is On or before 31st August, 2018.

KEY Points:

  • Form shall be verified by MOBILE OTP and E-MAIL OTP.
  • The form should be filed by every Director using his own DSC and should be duly certified by a practicing professional.
  • NO GOVT. FEE, if KYC filed before 31st August by applicant who has been allotted DIN on or before 31st March, 2018
  • INR 5000/- Govt. fees shall be applicable,if KYC filed after 31st August by applicant.
  • Filing of DIR-3 KYC would be mandatory for Disqualified Directors also.
  • e-Form DIR – 3 KYC, need to file based on DIRECTOR IDENTIFICATION NUMBER (DIN), so even though, if any Director holding multiple Directorship in Company, then also they need to File e-Form DIR – 3 KYC, only once according to their DIN.

Consequences of Non-filing of DIR-3 KYC:-

  • Every Individual “Director Identification Number” (DIN) will be marked as deactivated, who does not intimate his/her particulars in e-form DIR-3-KYC within stipulated time.
  • The de-activated DIN shall be re-activated only after e-form DIR-3-KYC is filed along with fee of Rs. 5000/- as prescribed under Companies (Registration Offices and Fees) Rules, 2014

 

We, are working as a Corporate Consultancy Firm having office at P 6/90 Connaught Place, New Delhi-110001 offers you our Services related to filing of e-form DIR-3 KYC. 

Service Offered:

  • Digital Signature provide, as the form is filed by private DSC of Director.
  • Collection of Documents
  • Assist you for filing of e-form DIR-3 KYC.

Documents Required (In case of Indian Director):

  • Self-attested PAN Card of Director
  • Self-Attested Aadhar Card of Director
  • Self-Attested Passport of Director, if allotted
  • Private Mobile Number (FOR OTP Verification)
  • Private Email ID (FOR OTP Verification)
  • Digital Signature

Documents Required (In case of Foreign Director):

  • Self-certified Passport of Director (Apostille and Notarized)
  • Self-attested Residential Proof (Apostille and Notarized)
  • Personal Mobile Number
  • Personal E-mail ID
  • Digital Signature

Important Check Points while Filling Form DIR-3-KYC: -

  • Unique Personal Mobile Number
  • Personal Email ID.
  • Duly Verified by OTP on Email ID and Mobile No.
  • The e-Form should be required to be certified by:
  1. Practicing Company Secretary
  2. Practicing Chartered Accountant
  3. Practicing Cost Accountant

Following points kept to be mind for filing the form of DIR-3KYC:-

1) OTP will be valid for 15 minutes

2) Foreign citizens – passport is ma0ndatory, and attachment also mandatory, permanent address should be abroad;

3) aadhar mandatory for Indian citizens,

4) Not required to attach PAN for Indian citizens

5) Personal Mobile no. and e-mail id should not be linked to any other director or certifying professional

6) personal e-mail id should not be official e-mail id – it should be personal like gmail, yahoo etc.

7) foreign citizens – mobile no. should be foreign

8) foreign citizens but resident in India – mobile no. can be Indian

9) Foreign DSCs not allowed, only Indian DSCs.

10) attestation of documents by practicing professional – mandatory

11) in case of change in address from the DIN records, first file form DIR-6 and then file form DIR-3-KYC

12) passport not mandatory for Indian citizens, but if you mention Yes to do you have your passport, then mandatory to give details and attach passport.

13) attestation rules to be followed as specified in the companies (incorporation) rules

14) Driving license and EC Id – not mandatory, but if you specify the details, then you have to attach the documents.

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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OVERVIEW OF GST REGISTRATION

Image result for overview gst registration

FOR SERVICE PROVIDERS: -

like any other category of business, service providers would be required to obtain GST registration, if the entity has an aggregate annual turnover of more than Rs.20 lakhs per annum in most states and Rs.10 lakhs in Special Category States(The GST Council in its 28th meeting held on Saturday  has changed the threshold exemption limit for registration in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand to be increased to Rs. 20 Lakhs from Rs. 10 Lakhs.. )

if you are a service provider, involved in inter-state, within a turnover of 20 lakhs  you are exempt from GST registration.

It is mandatory to obtain registration irrespective of turnover if: -

  • You are registered in old law
  • You undertake inter-state supply of goods or services more than 20 lakhs,
  • You are casual taxable persons.
  • You are non-resident taxable persons.
  • You provide services of an input service distributor.
  • You are an e-commerce operator or aggregator.

If you are expecting your annual turnover to increase in future, you take GST registration voluntarily.

Date of GST Registration Obtained: -

If you are an existing service provider having service tax registration, the service tax registration has been mandatorily converted into GST registration.

If you are starting a new service business, then you must apply and obtain GST registration within 30 days of commencing business. If you are a casual taxable person or non-resident taxable person, you have to obtain GST registration atleast 5 days before commencing business

Process of GST Registration

For those service provider who must obtain GST registration, the process is very simple:

  • Upon logging into your service tax account, you will be given a provisional ID and password for the purpose of enrollment in GST.
  • Upon entering the GST portal, you will be prompted with selecting one of the two given choices, where you must click “New user login”.
  • Login using your ID and password
  • After logging in, you will be taken to a page where you enter your mobile number and mail address
  • After entering the same, you will receive separate OTP’s on your mobile number and mail, mention them
  • Create your desired user name and password
  • Set security questions

You will be enrolled into GST after following the above steps.

Change GST Registration Information

GST registration requires various details of an applicant. Once an applicant has registered under GST, after that he may be a need to make amendments to the particulars of the registration. For amend GST Registration the applicant needs to file an application for doing amendments in the details furnished. To apply for amendment of GST registration, one must understand the two categories.

  • Application for the amendment of core fields – requires approval from GST Authorities
  • Application for the amendment for non-core fields – Does not require approval from GST Authorities 

Core Fields of GST Registration

The following particulars included in core fields and can be amended:

Business Details: -

  • Legal Name of the Business
  • Trade Name
  • District of Business
  • Constitution of Business

Partner/Promoter Details: -

  • Names of new partners/promoters can be added and old stakeholders can be removed.
  • Changes that occur between existing partners/promoters can be Amended as a Non-core Amendment.

Principal Place of Business:-

  • Address
  • Contact Information
  • Possession status of Premises
  • Type of Business Activity carried out at the location

Additional Place of Business:-

  • Additional places of Business.
  • Details of Address, contact information.
  • Possession status of Premises.
  • Type of Business Activity carried out at the location.

Procedure for Amendment of Core Fields

By following the steps mentioned below, you can file an application for the amendment of core fields in GST registration:

STEP 1: Visit the GST Portal and login into your GST account by providing the username and password.

STEP 2: Select services from the top menu and then select Registration from the drop-down menu.

STEP 3: You will see another drop down menu from which you will have to select “Amendment of GST Registration Core Fields” in the option.

STEP 4: The page leads to the amendment of core fields where one can file the application for amendments. One may select the icon representing the core field that is desired to be modified.

Once all the steps followed and verification process is completed, an ARN is generated and an acknowledgement message for the same will be received within a stipulated time of 15 minutes through message/e-mail. The application is processed within 15 days from the date of signing the Amendment application. The applicant will receive a notification through SMS or e-mail about whether the amendment has been approved or rejected. If the details of the amendment are not satisfactory, the assessing officer might issue a notice to the applicant for which a reply is to be made within 7 working days.

Application for amendment of registration must be submitted within15 days from the date of change that requires notification to the GST registration. The application will be available for 15 days after making changes. After a period of 15 days, the application will automatically be deleted upon failure to submit the same.

Non-Core fields of GST Registration: -

Fields of the registration application except legal name of the business, Addition/ deletion of stakeholder details and principal place of business or Additional place of business are called non-core fields.

Non-core fields are available for editing, and changes in it are auto populated in registration of the taxpayer. No approval is required from the Tax Official if any amendments are made to these fields by the taxpayers

procedure for the amendment of Non-Core fields: -

 

  • Login to the GST Portal with valid User ID and password.
  • Under Services tab, click Registration → Amendment to Registration Non – Core Fields
  • Select the appropriate tab which you want to change / amend.
  • After doing changes, click on Verification Tab.
  • Select the Authorized Signatory from the drop down.
  • Enter the Place.
  • After the application is filled, you have to digitally sign the application using DSC or EVC.
  • A message will be displayed showing that the submission is successful.

You will receive an Acknowledgement within 15 minutes on registered Email ID and Mobile number. Also the email and message containing ARN and intimation about successful filing of application form for Amendment in Non-Core fields will be sent to Primary Authorized Signatory.

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE & PROFESSIONAL UPDATES 19TH JULY 2018

Image result for corporate and professionalDirect Tax :

  • ITAT deletes TP-adjustment, upholds TNMM over TPO’s CPM as MAM for benchmarking export transaction for Himalaya Drug Company (assessee – partnership firm engaged in the business of manufacture and sale of herbal pharmaceutical products) for AY 2011-12; Rejects TPO’s approach in applying gross profit margin of the domestic consumer product division to the cost of goods sold in exports to AE as ‘factually erroneous and contrary to the mandate of Rule 10B(1)(c)’, notes that though the products sold in the domestic consumer product division were comparable to the products sold to AEs, the functions performed, assets employed and risks undertaken in both the segments were not the same;[TS-614-ITAT-2018(Bang)- TP]
  • Gujarat HC holds fresh re-assessment notice issued in March, 2017 on assessee (a share broking company) as invalid absent formal withdrawal of first notice of reopening by AO for AY 2010-11; A re-assessment notice was first issued in 2015, which AO had agreed to withdraw in the first round of litigation before the co-ordinate bench, thereafter a fresh notice was issued in 2017 recording fresh reasons for re-opening;[TS-381-HC-2018( GUJ)]
  • CBDT amends Forms for advance ruling; seeks unique number for identification of non-resident.
  • CBDTamends Form-34C, 34D, 34DA, 34E & 34EA of application for obtaining an advance ruling and corresponding Rule-44E of the Income Tax Rules, 1962.
  • Transfer of case u/s 127 – “Absence of dissenting note” from officer of equal rank who has to agree to the proposed transfer would not constitute Agreement, envisaged U/s-123(2)(a) of the Act, the impugned order held as without jurisdiction – Dilip Tanaji Kashid Vs. Pr.CIT (2018 (7) TMI 1023 – Bombay HC).

INDIRECT TAX

  • Delhi High Court has given relief to exporters utilising a scheme that allows duty-free importers from paying integrated goods and services tax (IGST) on their imports.
  • Govt on Monday kicked off a special fortnight-long drive to facilitate pending GST refunds which will last till July 30. During this period, dedicated refund cells and help desks would be provided for exporters to get their refund claims processed in each commissionerate.
  • The Indian government is likely to impose a safeguard duty (SGD) of 25 per cent on solar cells and modules imported from China and Malaysia for the coming two years, increasing the cost of more than 85 per cent of the solar capacity in the country.
  • FRIDAY (20JUL2018)is the last date for filing GSTR-3B, GSTR-5 & GSTR-5A for Jun, 2018.

FAQ on GST Audit:

  • Query:Whether Proper Officer is required to give any notice to taxable person before completing assessment u/s 46?
  • Answer:As this provision relates to ‘best judgment assessment’, giving a notice to the taxable person is not required.

MCA UPDATES

  • MCA has constituted a 10 Member Committee, headed by the Secretary of Ministry of Corporate Affairs, for review of the penal provisions in the Companies Act, 2013 may be setup to examine ‘de-criminalisation’ of certain offences.
  • Due Date forGSTR-3B for month of June 2018 & payment of due tax till this date-June 20, 2018.
  • MCA has constituted a 10 Member Committee, headed by the Secretary of Ministry of Corporate Affairs, for review of the penal provisions in the Companies Act, 2013may be setup to examine ‘de-criminalisation’ of certain offences under the Act.
  • MCAhas established the Centralised Scrutiny & Prosecution Mechanism (CSPM) and officers are appointed as Inspectors for Compliance of Investor Education & Protection Fund (Section 124-125) provisions conferred under first proviso to sub-section 4 of Section 206 of the Companies Act, 2013.

OTHER UPDATES 

  • ICAI has submitted 121 suggestions on various topics under GST to  Union Minister of Finance  on General Issues, Definitions,  Classification And Exemption, Scope Of Supply, Composite And Mixed Supply, Composition Levy, Time & Value Of Supply, Input Tax Credit etc

For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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QUICK REVIEW ON JOINT VENTURE

 A joint venture is a tactical partnership where two or more people or companies agree to put in goods, services and/or capital to a uniform commercial project.

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Types of joint venture:-

 Contractual joint venture (CJV)

The contractual joint venture might be used where the organization of a detached legal entity is not needed or the creation of such a separate legal entity is not feasible. There is an agreement to work together but there is no agreement to give birth to an entity owned by the parties who are working together.

For example, a foreign company may have a Technology Collaboration agreement with an Indian company whereby the foreign company controls all key aspects of running the business. In such a case the foreign company may like to retain the option of taking equity at a future date in the Indian company run by its technology. This will mean that though to begin with the venture is a contractual joint venture, the parties may convert it into an equity based joint venture at a later date.

Contractual joint ventures are therefore typically used when:-

  • a consortium is putting in a bid for a specific contract with a view to forming a more permanent joint venture if the bid is successful (particularly common for construction contracts or for respondents for large public-sector tenders)
  • the participants are co-operating on a defined project for a defined period of time, eg:
  • construction projects – each participant typically provides different parts, eg one party may provide the land, another the design skills, another the project management skills and a fourth may actually do the building; or
  • supply of hi-tech equipment to a third party’s order – the participants may each provide a different component and one of their number may assemble the components into a finished product
  • The participants wish to co-operate on a specific research and development project
  • The parties are entering into some other type of short-term horizontal co-operation agreement, e.g. a specialization agreement – the distinction between horizontal and vertical agreements is particularly relevant to competition law. A horizontal agreement is generally an agreement between parties that operate at the same level of a supply or distribution chain (eg two manufacturers); a vertical agreement is an agreement between parties that operate at different levels of a supply or distribution chain (eg a manufacturer and a distributor).

The three main advantages of a contractual joint venture are:

  • Independence – as a contractual joint venture does not involve any structural changes
  • Lower costs – for the same reasons as above, together with there being no formalities; this may be vital when little money is available at the start-up of the venture
  • Simplicity – a contractual joint venture does not usually involve any transfer of assets at the start of a project, nor on a project’s termination.

Equity Based Joint Venture (EJV)

The equity joint venture is an understanding whereby an independent legal entity is created in accordance with the agreement of two or more parties. An equity joint venture agreement is one in which a separate business entity, jointly owned by two or more parties, is formed in accordance with the agreement of the parties.

The form of business entity may vary – company, partnership firm, trusts, limited liability partnership firms, venture capital funds etc. From the point of a foreign company, the most preferable form of business entity is either a company or a limited liability partnership firm. However, the division of profits and losses is not the only characteristic of an equity-based joint venture.

For example, there are often agreements where one of the parties is investing but has no say in the management of the joint venture (JV) company. There are also situations where a foreign company may want to exercise management control even though it is not investing in the JV Company. Typically, if a foreign company is providing technology and other knowledge-based inputs, it may want to ensure that the JV Company is managed as per its directions. In such cases the foreign company may retain an option to invest in the JV Company at a future date. Such a structure may also be used by a foreign company to create a foothold for itself in a sector where Foreign Direct Investment (FDI) is not allowed.

 Who Can Set Up Equity Based JV

In India Generally speaking, any non-resident entity can set up an equity based joint venture in India. However, some entities face restrictions under FDI Policy1 of Government of India. The restrictions are as follows:

  1. Citizen or entity of Pakistan can invest only after approval of Government of India. They cannot invest in defense, space, atomic energy and sectors prohibited for foreign investment.
  2. Citizen or entity of Bangladesh can invest only after approval of Government of India. However, there are no barred areas as in the case of entities from Pakistan.
  3. NRI residents in Nepal and Bhutan as well as citizens of Nepal and Bhutan can invest on repatriation basis subject to investment coming in free foreign exchange (USD or EURO) through normal banking channels.
  4. A Foreign Institutional Investor (FII) can invest only under the Portfolio Investment Scheme which limits the individual holding of an FII to 10% of the capital of the company and the aggregate limit for FII investment to 24% of the capital of the company. This aggregate limit of 24% can be increased to the sectoral cap / statutory ceiling, as applicable, by the Indian Company concerned through a resolution by its Board of Directors followed by a special resolution to that effect by its General Body and subject to prior intimation to Reserve Bank of India. The aggregate FII investment, in the FDI and Portfolio Investment Scheme, should be within the above caps.
  5. A Foreign Venture Capital Investor (FVCI) duly registered in India may contribute up to 100% of the capital of an Indian Company under the automatic route and may also set up a domestic asset management company to manage the fund. Such investments are subject to the relevant regulations and FDI policy including sectoral caps, etc. SEBI registered FVCIs are also allowed to invest under the FDI Scheme, as non-resident entities, in other companies, subject to FDI Policy and other regulations.
  6. Forms of Equity Based JV

Every equity based joint venture gives birth to a new entity. Government of India permits certain type of entities and frowns upon some others. Different types of entities and the government’s attitude to them are summed up below:

  • Company – A limited liability company is the most preferred structure for joint venture entities in India. Government also encourages investment being in the form of equity capital of a company incorporated in India. Companies in India are mainly of two types – private limited and public limited. After the coming into force of Companies Amendment Act, 2015 there is no minimum share capital prescribed either for private limited company or public limited company. Earlier, the minimum prescribed share capital for a private limited company used to be Rs. 100,000- and for a public limited company it used to be Rs. 500,000-. A private limited company must have at least two shareholders, while a public limited company must have seven shareholders. The only exception to this is a one-person company. The shareholders may be foreign citizens or foreign companies. Companies Act 2013 makes it mandatory that at least one director of every company is resident of India.
  • Partnership Firm – Such an entity is not permitted for joint ventures by foreign residents in India in most of the cases. Exceptions are made in case of Non Resident Indians or Persons of Indian Origin residing out of India. However, such exceptions are subject to various conditions. Generally speaking, a foreign company should not think of using partnership firm as a vehicle for a joint venture.
  • Limited Liability Partnership (LLP) Firm– LLP Firm structure is regulated in India by The Limited Liability Partnership Act, 2008. Foreign investment in LLP Firms was not permitted before November 2015. Government of India has now allowed foreign investments in LLP firms subject to certain restrictions. LLP Firms are partnership firms with limited liability of partners. An LLP Firm combines the convenience of a partnership firm with the limited liability feature earlier found only in a company. An LLP Firm needs minimum two partners. It also requires minimum two Designated Partners out of which at least one should be resident of India. The two partners can also be appointed as Designated Partners. There is no requirement of minimum capital contribution to incorporate an LLP Firm.
  • Venture Capital Fund – A duly registered Foreign Venture Capital Investor is allowed to contribute up to 100% in Indian Venture Capital Undertakings /Venture Capital Funds / other companies.
  • Trusts – A foreign company is not allowed to use Trust as a form of a joint venture entity in India.
  • Investment Vehicle – SEBI has introduced regulations for some funds like Real Estate Investments Trusts, Infrastructure Investment Funds, Alternative Investment Funds. Such funds are now permitted to receive foreign investment from a person resident outside India.
  • Other Entities – Foreign companies are not allowed to use any structures other than those mentioned above for the purpose of equity based joint venture entities.

To sum up one can say that the most acceptable and convenient forms of equity based joint venture in India are a limited liability company and a limited liability partnership (LLP) firm.

Before signing a joint venture contract the below points must be properly assessed:

  • Applicable law
  • Shareholding pattern
  • Composition of board of directors
  • Management committee
  • Frequency of board meetings and its venue
  • General meeting and its venue
  • Composition of quorum for important decision at board meeting
  • Transfer of shares
  • Dividend policy
  • Employment of funds in cash or kind
  • Change of control
  • Restriction/prohibition on assignment
  • Non-compete parameters
  • Confidentiality
  • Indemnity
  • Break of deadlock
  • Jurisdiction for resolution of dispute
  • Termination criteria and notice

Procedure for setting up a Joint Venture
The broad steps involved in setting up a joint venture company in India are outlined as under:

Step-1: Locate an Indian partner
Step-2: Venture Agreement setting out the rights and responsibilities of the Parties Form a Joint
Step-3: In case the Joint Venture Company is a new company, incorporate a new company (public or private) and invest in agreed ratio. However, in case the investment is being made in an existing company by acquisition of shares by the foreign company, complete the share acquisition procedure.
Step-4: Commence Joint Venture Business

 Advantages of Joint Venture
A Joint Venture Company is one of the most preferred forms of entry model for foreign companies for doing business in India. A joint venture may entail the following advantages for a foreign investor:

  • Accessible financial resource of the Indian partners.
  • Established contacts of the Indian partners which help in smoothening the process of setting up of operations.
  • Established distribution/ marketing set up of the Indian partner.

 

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APPLICABILITY OF INDIAN ACCOUNTING STANDARD

Image result for IND ASComing months will going to be much more busy than usual for all of us. Especially in some areas like applicability of ICDS, penalty levy on IT returns late filing and IndAS applicability in certain cases.

IndAS continuous implementation creating more challenging or difficulties for the companies in following annual compliance accurately especially the compliances related to Indian tax laws. As all of us know very well the purpose of presentation of financial statements as per IndAS is to disclose the transaction, especially some transactions which are related to the related parties transaction on the Arm’s Length basis for making comparable to industry standard of similar transactions.

There are some meaningful changes were happened in recognizing income and expenditures and their presentation under IndAS and IGAAP. As per IndAS all the liabilities have recognized on substance over form basis than the legal form and all the assets have recognized on fair value basis than the book value. Notwithstanding, IGAAP is telling us the principle which are related to general prudence and historical cost method rather than the fair market values.

Financial statements preparation as per IndAS is mandatory for the following companies from the date of 1st April 2016:-

  • Unlisted companies which having net worth of Rs. 500 Crores or above.
  • Companies which are already listed having net worth of Rs. 500 Crores or above.
  • Companies which are in the process of listing in any stock exchange in India or outside
  • India having net worth of Rs. 500 Crores or above.
  • Also mandatory for their subsidiaries, holding, associate and joint venture companies.

From the date of 1st April 2017, limits of net worth for applicability of IndAS are getting changed:-

  • Unlisted companies which having net worth of Rs. 250 Crores or above.
  • All the Listed companies.
  • All the companies which are in process of listing in any stock exchange in India or outside India.
  • Also mandatory for their subsidiaries, holding, associate and joint venture companies.

Once a company starts following the Ind AS mandatorily on the basis of criteria specified above, it will be required to follow the Ind AS for all the subsequent financial statements even if any of the criteria specified do not subsequently apply to it. Companies to which IndAS are applicable should prepare their first set of financial statements in accordance with the IndAS effective at the end of its first IndAS reporting period i.e. companies preparing financial statements applying the IndAS for the accounting period beginning on 1 April 2016 should apply the IndAS effective for the financial year ending as on 31 March 2017.

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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corporate and professional updates 7th June 2018

Image result for corporateDirect Tax:

  • Mumbai ITAT rejects applicability of TDS u/s 195 on payment of advertisement expenses and professional and consultancy fees paid to foreign nationals by the UK branch of assessee (a domestic company) during AY 2008-09, deletes Sec. 40(a)(i) disallowance; Observes that UK branch had incurred expenditure in connection with the advertisements in foreign magazines and websites, likewise, consultancy fee was paid in connection with registration of trade mark in UK;[TS-287-ITAT-2018(Mum)]
  • Jaipur ITAT deletes disallowance u/s 40A(3) with respect to cash payment made by assessee-firm (engaged in real estate business) against purchases of land during AY 2013-14, observes that the payment was made out of the explained sources, through the registered document and as a disclosed transaction and the identity of the sellers and genuineness of  transaction was established; [TS-276-ITAT- 2018(JPR)]

INDIRECT TAX

  • GST: A transaction once reported as B2C cannot be amended later to add GSTIN & convert transaction as B2B. CBIC FAQ 7 (Jun 2018) on Financial Services.
  • GST: The location of a supplier will be the state in which the person holds a bank account even if bank branches of other locations are used for rendering services to customers under the GST the government clarified.
  • CBIC has launched a tax refund drive in the first fortnight of June and issued instructions to swiftly settle refund claims of exporters that are held up because of mismatches in the returns filed by them.

FAQ on E-WAY BILLS:

  • Query: What has to be done by the transporter if consignee refuses to take goods or rejects the goods for any reason?
  • Answer:There is a chance that consignee or recipient may reject to take the delivery of consignment due to various reasons. Under such circumstances, the transporter can get one more e-way bill generated with the help of supplier or recipient by indicating supply as ‘Sales Return’ with relevant documents, return the goods to the supplier as per his agreement with him.

RBI Update:

  • The Reserve Bank of India has imposed a monetary penalty of Rs. 1.00 lakh (Rupees one lakh only) on Abhyudaya Mahila Urban Co-operative Bank Ltd., Channapatna, in exercise of the powers vested in it under the provisions of Section 47 A (1) (c) read with Section 46 (4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies) for violating directives contained in para 3 of Reserve Bank of India.
  • NBFC Companies are planning to meet the RBI on the issue of implementation of Ind AS. RBI has deferred the implementation of Ind AS for banks by a year, while it is applicable for NBFCs from April 1, 2018.

MCA Update:

  • MCA gives extension for a period of one month for the steering committee on CSR with effect from 3rd June 2018.

SEBI UPDATES

  • SEBI has issued Master Circular for Stock Brokers which is a compilation of relevant circulars issued by SEBI which are operational as on date of this circular.

OTHER UPDATES

  • ICAI has signed the Mutual Recognition Agreement (MRA) with the South African Institute of Chartered Accountants (SAICA) on June 4, 2018, at SAICA HO, Johannesburg, South Africa. Read more at: http://www.icai.org
KEY DATE:
  • QUARTERLY RETURN FOR REGISTERED PERSONS WITH AGGREGATE TURNOVER UP TO RS. 1.50 CRORES: GSTR-1 :-31. JULY 2018
  • TURNOVER EXCEEDING RS. 1.5 CRORES OR OPTED TO FILE MONTHLY RETURN: GSTR-1 (MAY2018):-10 JUNE 2018
  • DUE DATE FOR FILLING GST TRAN-2- 30.06.2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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HOW TO APPLY TO RBI FOR MOBILE WALLET/ PREPAID PAYMENT INSTRUMENTS

Image result for mobile wallet

The Reserve Bank of India issued guidelines for prepaid payment instruments (PPI) such as closed, semi-closed and open wallets. According to the new guidelines, all the PPIs will now be interoperable, which means will allow transaction with each other

  • A non-bank entity desirous of setting up payment systems for issuance of PPIs shall apply for authorisation in Form A(available on RBI website) as prescribed under Regulation 3(2) of the Payment and Settlement Systems Regulations, 2008 along with the requisite application fees.
  • The applications shall be initially screened by RBI to ensure prima facie eligibility of the applicants. The directors of the applicant entity shall submit a declaration in the enclosed format (Annex-3). Applications of those entities not meeting the eligibility criteria, or those which are incomplete / not in the prescribed form with all details, shall be returned without refund of the application fees.
  • In addition to the compliance with the applicable guidelines, RBI shall also apply checks, inter-alia, on certain essential aspects like customer service and efficiency, technical and other related requirements, safety and security aspects, etc. before granting in-principle approval to the applicants.
  • Subject to meeting the eligibility criteria and other conditions, the RBI shall issue an ‘in-principle’ approval, which shall be valid for a period of six months. The entity shall submit a satisfactory System Audit Report (SAR) to RBI within these six months, failing which the in-principle approval shall lapse automatically. SAR shall be accompanied by a certificate from the Chartered Accountant regarding compliance with the requirement of minimum positive net-worth of Rs. 5 crore. An entity can seek one-time extension for a maximum period of six months for submission of SAR by making a request in writing, to DPSS, Central Office, RBI, Mumbai, in advance with valid reasons.
  • Pursuant to receipt of satisfactory SAR and net-worth certificate, the RBI shall grant final Certificate of Authorisation.  Entities shall commence business within six months( extention allowed for next 6 months in case of valid reasons) from the grant of Certificate of Authorisation .
  • The Certificate of Authorisation shall be valid for five years.
  • Entities seeking renewal of authorisation shall apply in writing to DPSS, RBI, Central Office, Mumbai at least three months before the expiry of validity of Certificate of Authorisation.
  • Any proposed major change, such as changes in product features / process, structure or operation of the payment system, etc. shall be communicated with complete details, by way of a letter, addressed to the Chief General Manager, DPSS, RBI, Central Office, Mumbai. RBI shall endeavor to reply within 15 business days after receipt of above communication at DPSS, RBI, Central Office, Mumbai.
  • Any takeover or acquisition of control or change in management of a non-bank entity shall be communicated by way of a letter to the Chief General Manager, DPSS, RBI, Central Office, Mumbai within 15 days with complete details, including ‘Declaration and Undertaking’ (Annex-3) by each of the new directors,

PPI issuers shall ensure that the name of the company which has received approval / authorisation for issuance and operating of PPIs, is prominently displayed along with the PPI brand name in all instances. The authorised entities shall also regularly keep RBI informed regarding the brand names employed / to be employed for their products.

PPI issuers shall ensure that no interest is payable on PPI balances.

PPIs shall be permitted to be loaded / reloaded by cash, by debit to a bank account, by credit and debit cards, and other PPIs- shall be in INR only

Cash loading to PPIs shall be limited to Rs.50,000/- per month subject to overall limit of the PPI.

Issuers shall ensure preservation of records and confidentiality of customer information in their possession as well as in the possession of their authorised / designated agents.

Issuers and their authorised / designated agents shall ensure adherence to applicable laws of the land, including KYC / AML / CFT norms.

Existing non-bank PPI/wallet

Existing non-bank PPI issuers (at the time of issuance of this Master Direction) shall comply with the minimum positive net-worth requirement of Rs. 15 crore for the financial position as on March 31, 2020 (audited balance sheet). This shall be reported to RBI, along with CA certificate in the enclosed format (Annex-2) and audited Balance Sheet, by September 30, 2020 failing which the entity may not be permitted to carry out this business. Thereafter, the minimum positive net-worth of Rs. 15 crore shall be maintained at all times. Till such time, the existing PPI issuers shall continue to maintain the capital requirements applicable to them at the time of their authorisation.

PPI issuers shall maintain a log of all the transactions undertaken using the PPIs for at least ten years. This data shall be made available for scrutiny to RBI or any other agency / agencies as may be advised by RBI. The PPI issuers shall also file Suspicious Transaction Reports (STRs) to Financial Intelligence Unit-India (FIU-IND).

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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QUICK REVIEW Of PREVENTION OF MONEY LAUNDERING ACT, 2002

Anti Money Laundering Compliance Program (The USA PATRIOT Act of 2001, Bank Secrecy Act, and FINRA Rule 3310)

Money laundering is the process by which large amounts of illegally obtained is given the appearance of having originated from a legitimate source. So basically, all the ways to convert the black money into white money are Money laundering. But in Money laundering, the black money must involve a predicate crime .

The offence of ‘Money Laundering’ is defined under Section 3 of the PMLA

Whosoever directly or indirectly, attempts to indulge, or knowingly assists, or knowingly is party, or is actually involved in any process, or activity connected, with the Proceeds of Crime, including its :

  • Concealment,
  • Possession,
  • Acquisition or use; and
  • Projecting or Claiming it as Untainted Property

AGENCY ADMINISTERS THE PMLA 2002

There is a specialised investigative body for investigation of these offences. The Directorate of Enforcement in the Department of Revenue, Ministry of Finance is responsible for investigating the offences of money laundering under the PMLA. Investigation usually begins with the registration of an Enforcement Case Information Report (also known was ECIR) which sets the investigation into motion.

This authority is empowered to carry out interim measures such as survey, search, seizure and arrest of the accused. Similarly, if an asset is found to be the proceeds of crime, the same can be confiscated and appropriated by the Government.

TIME LIMIT FOR PROVISIONAL ATTACHED PROPERTY

If any person is in possession of any Proceeds of Crime ,the authorities to attach properties suspected to be involved in Money Laundering. reasons to be recorded in writing. the authority may by order in writing, provisionally attach such property for a period not exceeding 180 days from the date of order

After provisional attachment, the Director or any other officer, has to file a complaint stating the facts of such attachment before the Adjudicating Authority, within a period of thirty days from such attachment.

SHOW CAUSE NOTICE

It has been provided in the Act that before recording the finding that all or any of the properties are involved in money laundering, the Adjudicating Authority has to issue a show cause notice of not less than thirty days to the aggrieved person. The aggrieved person at this stage can submit his reply and attend the hearing before the Adjudicating Authority to present his defense

ACTIONS CAN BE TAKEN AGAINST THE PERSONS INVOLVED IN MONEY LAUNDERING

Attachment of property, seizure/ freezing of property and records. Property also includes property of any kind used in the commission of an offence under PMLA, 2002 or any of the scheduled offences.

(b) Persons found guilty of an offence of Money Laundering are punishable with imprisonment for a term which shall not be less than three years but may extend up to seven years and shall also be liable to fine

(c) When the scheduled offence committed is under the Narcotics and Psychotropic substances Act, 1985 the punishment shall be imprisonment for a term which shall not be less than three years but which may extend up to ten years and shall also be liable to fine.

INVESTIGATING OFFICERS POWERS:-

  • to provisionally attach any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property
  • to conduct survey of a place
  • to conduct search of building, place, vessel, vehicle or aircraft & seize/freeze records & property
  • to conduct personal search
  • to arrest persons accused of committing the offence of Money Laundering
  • to summon and record the statements of persons concerned .

APPEAL AGAINST ORDER

Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within 60 days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law or fact arising out of such order. Thus appeal can be filed before High Court on any question of law or fact. High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

REPORTING ENTITY 

“Reporting Entity” means a banking company, financial institution, intermediary or a person carrying on a designated business or profession.

Obligation of banking companies, financial Institutions and Intermediaries:

Banking companies have to follow the procedure of KYC Norms (Know your customer)

Maintain records for-

  • Nature and value of the transaction to be transacted.
  • Whether such transaction was singly transacted or series of transaction taken place in a month.

Maintain record for a period of 5 years from the date of cessation of transaction between the clients and the banking company or financial institution or intermediary as the case may be.

Furnish information of above transaction to director within the prescribed time.

Verify and maintain the records of identity of all clients in respect of such transactions to Director within the prescribed time.

Penalties on reporting entities

Monetary penalties can be imposed on defaulting reporting entity or its designated Director on the Board or any of its employees, which shall not be less than ten thousand rupees but may extend to one lakh rupees for each failure

CONTRACTING STATE 

“Contracting State” means any country or place outside India in respect of which arrangements have been made by the Central Government with the Government of such country through a treaty or otherwise.

OBTAIN EVIDENCE FROM CONTRACTING STATE

An application is to be made to a Special Court by the Investigating Officer or any officer superior in rank to the Investigating Officer and the Special Court, on being satisfied, may issue a Letter of Request to a court or an authority in the contracting State competent to deal with such request to-

  • examine facts and circumstances of the case,
  • take such steps as the Special Court may specify in such letter of request, and
  • forward all the evidence so taken or collected to the Special Court issuing such letter of request.

The properties involved in money laundering located in India, where the offence of money laundering has been committed outside India, can be ordered to be confiscated by the Special Court.

Any person willfully and maliciously giving false information and so causing an arrest or a search to be made under this Act shall, on conviction, be liable for imprisonment for a term which may extend to 2 years or with fine which may extend to 50000 rupees or both.

OVER-RIDING EFFECT

The provisions of PMLA, 2002 have over-riding effect, notwithstanding anything inconsistent there with contained in any other law for the time being in force.

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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Union Cabinet approves Arbitration and Conciliation (Amendment) Bill, 2018

Image result for Arbitration and Conciliation (Amendment) Bill, 2018

The Union Cabinet on Wednesday approved the Arbitration and Conciliation (Amendment) Bill, which seeks to establish an independent body to make arbitration process user-friendly, cost-effective and ensure speedy disposal and neutrality of arbitrators.

The Bill seeks to encourage institutional arbitration for settlement of disputes and make India a centre of robust .

Provisions of the Bill

  • The Bill provides for creation of an independent body ‘Arbitration Council of India (ACI)’ to grade arbitral institution and recognize arbitrators by laying down norms and take all steps to promote and encourage arbitration, conciliation, mediation and other ADR Mechanism.
  • The ACI shall be a body corporate. The Chairperson of ACI shall be a person who has been a Judge of the Supreme Court or Chief Justice or Judge of any High Court or any eminent person.
  • It facilitates speedy appointment of arbitrators through designated arbitral institutions by the Supreme Court or the High Court, without having any requirement to approach the court.
  • limit of 12 months (extendable by a further 6 months by consent of the parties) for completion of arbitral proceedings. If arbitral proceedings are not completed within the 18-month period, the mandate of the arbitral tribunal stands terminated unless on an application made by the parties, the court extends the time period.
  • Excluding International Arbitration from the bounds of timeline and further to provide that the time limit for arbitral award in other arbitrations shall be within 12 monthsfrom the completion of the pleadings of the parties.
  • A new section 42A is proposed to be inserted to provide that the arbitrator and the arbitral institutions shall maintain the confidentiality of all arbitral proceedings except the award
  • It inserts a new section 42B to protect an Arbitrator from suit or other legal proceedings for any action or omission done in good faith in the course of arbitration proceedings.
  • A new section 87 is proposed to be inserted to clarify that unless parties agree otherwise the Amendment Act 2015 shall not apply to (a) Arbitral proceedings .which have commenced before the commencement of the Amendment Act of 2015 (b) Court proceedings arising out of or in relation to such arbitral proceedings

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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