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)

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)

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)

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)

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)

Everything You Need to Know About SIDBI Loan Schemes

Image result for sidbi loan application

SIDBI has proved to be a great support system for all kinds of small businesses in India. This is because they create a series of equity and loan schemes for MSME sector to sanction their growth. In the following article, we will observe some famous SIDBI schemes like- SME IT loans, vendor development, marketing assistance, international finance, for women entrepreneurs and risk capitals as well. It is owing to these schemes only that SIDBI has gained such a good place in the market.

Marketing Assistance Scheme

The loan provided by SIDBI is usually not below Rs. 10 lakhs, if one wants to directly obtain it form SIDBI branch. The loan is mainly offered to MSEs so that they can do a proper marketing for their products. Also, the ratio of debt-equity is normally not more than 2:1.

SME IT Loans

In order to help the SMEs set-up, a good IT sector in their business, SIDBI,and well known IT Company Intel have come together and launched an extremely successful venture. This is supposed to help SMEs to have a smooth access to finance and technology to implement a better and revised technology. This is because one can get aloan for hardware, software, their installation,and services.  Interest charged on the finance of 5 lakhs to 25 lakh is 11.5% p.a on a diminishing balance basis. This helps in technical growth of SMEs.

Vendor Development Scheme

This scheme proves to be a bliss for merchants of OEMs and other large corporates as well. This merchantis basically part of SMEs belonging to various sectors such as service or industrial sector. SIDBI extends its assistance to these OEM merchants and corporates so that they can expand and modernize their business. In order to make this scheme more successful and helpful, SIDBI has signed a MoU with large corporates of the country, PSUs,and other big MNCs so that a good SME vendor base can be made available.

Through Bill Discounting Scheme, timely payments to various units are assured. Under this scheme, various kind software finance is made available to purchasers and sellers of machinery, components,and parts which constitute an important part of construction and transportation sector of any business.

Refinance Through Banks and SFCs

This scheme of Refinance is made available via State Finance Corporations, various banks, for creating small but new scale units which would be helpful for SMEs to expand, modernize, and diversify their business. Service sector usually is comprised of various professional practices, tourism, hospitals or nursing homes, hotels, restaurants etc. SIDBI tends to offer long-term credit, State level Industrial development Institutions, for loans that are provided by MSMEs. But, there is a catch here- the total budget of the project which should come under Refinance Assistance with respect to service sector units should not exceed the amount of 20 crores. This is the reason as to why project cost limit is lower for SFCs.

International Finance

There a number of schemes which are covered under this department:

  • Pre-eminent credit

This scheme is anoffer to various SMEs in adifferent currency – which may be USD, Euro, or in rupees. The margin provided amounts to a minimum value of 10% and themaximum value of 25%. The period for credit is of 180-190 days. The rate of interest is very less- 0.75% charged half yearly.

  • The foreign currency term plans

This assistance is basically given to SMEs so that they can set up new projects and expand their business in the marketplace. This can also be used to renew their technology schemes of the business. In fact, one can repay this amount back in about amaximum period of five years. The interest charged under this scheme is 4%.

  • Post-shipment Credit

This credit is offered in foreign currency only for SME units or trading section so that they can source their SMEs. Finance is mainly given to those SMEs where sourcing requirements are up to Rs 1 crore. The rat rod interest charged for this scheme is also 0.75%. The credit also follows all the guidelines of RBI.

Marketing Fund for Women

SIDBI realized the role of women in every field. So, it provides aid to young, aspiring women entrepreneurs and organizations who are mainly involved in the marketing sector. This helps these women entrepreneurs to expand their reach, in every kind of market and enables them to fight every odd. Under this scheme, finance is provided to NGOs, co-operatives, etc who need financial support for services like trade, internet, advertising, marketing research etc.

Rishi Capitals to MSMEs

Under this, SIDBI has launched a scheme – “SIDBI foundation for Risk Capital for MSMEs”. Various new products and mechanism are created under this project in order to provide risk capital to MSMEs for varied industry units. Also, apart from a direct financial help provided by SIDBI, different delivery routes like VC Funds, small banks etc also help to supply risk capital to MSMEs. This becomes important as no one can envision future risks and issue which might occur with any business, you can only focus on giving your best.

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.

We at Consultant help you to secure your Trademark before someone else takes that opportunity away from you. To know more about the Trademark Registration process you can contact. 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 09811322784 9555 5555 480)

AMENDMENT IN LAW ON CHEQUE BOUNCE

Image result for cheque bounceCheques are used in almost all transactions such as re-payment of loan, payment of salary, bills, fees, etc. A vast majority of cheques are processed and cleared by banks on daily basis. Cheques are issued for the reason of securing proof of payment. Nevertheless, cheques remain a reliable method of payment for many people. On the other hand, it is always advisable to issue crossed “Account Payee Only” cheques in order to avoid its misuse.

In legal parlance, author of the cheque is called ‘drawer’, the person in whose favour it is drawn is called ‘payee’ and the bank who is directed to pay the amount is called ‘drawee’.

Dishonour of cheque

Dishonor of cheque or cheque bounce occurs when a cheque that is presented in the bank is returned unpaid. It could occur due to insufficient funds in the bank account of the person who has issued the cheque or the signature on the cheque is not matching with the original signature of that person. You can proceed against the person who has issued such a cheque under various provisions of law. The most important and useful provision to consider is Section 138 of The Negotiable Instruments Act.

Steps to initiate prosecution

To initiate prosecution under Section 138, three condition precedents need to be fulfilled as below:

  • The cheque should have been presented to the bank within three months of its issue or within the period of its validity. (The validity of cheques were considered to be six months previously; however, Reserve Bank of India vide Reserve Bank of India vide Notification No. RBI/2011-12/251DBOD.AML BC.No.47/14.01.001/2011-12 directed that the validity period of cheques to be reduced from six months to three months with effect from 1st April, 2012.).
  • The payee [Person who receive the money] should have made a demand to the Payor [Person who is liable to pay the money] for payment by registered notice after the cheque is returned unpaid.
  • The Payor should have failed to pay the amount within 30 days of the receipt of notice.
  • If only all the above three conditions are satisfied, prosecution can be launched for the offence under Section 138.

Legal action

The Negotiable Instruments Act, 1881 is applicable for the cases of dishonour of cheque. This Act has been amended many times since 1881.

According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both .and is punishable by imprisonment up to two years or with monetary penalty or with both.

If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately. Such a chance has to be given only in the form of notice in writing.

The payee has to sent the notice to the drawer with 30 days from the date of receiving “Cheque Return Memo” from the bank. The notice should mention that the cheque amount has to be paid to the payee within 15 days from the date of receipt of the notice by the drawer. If the cheque issuer fails to make a fresh payment within 30 days of receiving the notice, the payee has the right to file a criminal complaint under Section 138 of the Negotiable Instruments Act.

 By whom -prosecution under Section 138

Prosecution can be launched against the payor and in the case where a company has committed an offence under Section 138, then not only the company, but also every person who at the time when the offence was committed, was in charge of and was responsible to the company shall be deemed to be guilty of the offence and be liable to be proceeded against.

Amendment in relation to cheque dishonour

The Cabinet has approved an amendment to a current law to allow for payment of an interim compensation in cheque dishonour cases with a view not to allow unscrupulous elements holding payments, pending long trial, sources said. An amendment to the Negotiable Instrument Act will allow a court to order for payment of an interim compensation ( interim compensation can be an amount not exceeding 20 per cent of the amount of the cheque) to those whose cheques have bounced due to dishonouring parties.

If the drawer is acquitted, the court may direct the payee to repay the amount paid as interim compensation with interest.

The said interim compensation has to be paid within a period of 60 days from the date on which the order to that effect is made.

Appellate courts would be enabled to order the appellant to deposit a part of the compensation awarded by the trial court at the time of filing appeal.

The said amount of interim compensation may be recovered in the manner provided under section 421 of CrPC – by way of attachment and sale of any movable property of the drawer.

The best policy to avoid a cheque bounce in your account is to NEVER write a cheque without money in your account.

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)

QUICK REVIEW ON E-FRRO

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In line with ‘Digital India’ vision, Government of India has further digitalised the process of FRRO (Foreigners Regional Registration Office) registration, Visa extension etc. for foreign nationals visiting India. Of lately, the Government had introduced online Foreign Registration and Visa extension facility. Foreigners could book appointment and upload documents online. However, they had to be physically present on the appointed date at the FRRO office for processing of the application.

Taking a step further, the government has now introduced an e-FRRO portal with an aim to provide faceless, cashless and paperless service to foreign nationals. There will be no requirement to visit FRRO office.

e-FRRO involves completely online application submission and document upload, for which no facilitation is required by any intermediary / agents etc. The foreign nationals are required to apply online by themselves.

Foreigners are required to create their own USER-ID by registering themselves online on e-FRRO portal. Afterwards, they are required to apply online through registered user-id for various Visa and Immigration related services in India viz. Registration, Visa Extension, Visa Conversion, Exit Permit etc, without any hassle and obtain the service(s) without coming to FRRO/FRO office.

Web based application aimed to build centralized online platform for foreigners for visa related services. Its key objective is to provide Faceless, Cashless and Paperless services to the foreigners with user friendly experience.

Salient Features: 

  1. Mandatory visit to the local FRRO office located at Bengaluru, Chennai, Delhi and Mumbai has been done away with, from 12 February 2018
  2. Online submission of documents in respect of all visa and immigration related services (such as the Indian FRRO registration, visa extension, change of address/passport, visa conversion, exit permission, etc.)
  3. Intimation to the client, through e-mail/SMS alerts for service granted / rejected
  4. Registration Certificate will be sent by post and on the registered email id. Alternatively, it can be downloaded from the portal. 

Document Requirment

  • Photo and Document(s) upload are mandatory.
  • First use the Online Application Submission option then upload photo and required document(s).
  • Only one copy of each document type has to be uploaded.
  • Scanned documents should be in PDF format.
  • Single supporting document can have multiple PDFs. The maximum size of each PDF should be 1 MB.
  • Only completely filled application along with photo and document(s) is available for appointment.
  • Only permanently saved application is available for Re-Printing.
  • Photo Requirements:
    1. Format – jpg
    2. Size – Maximum 1 MB
    3. Photo should present Full face, front view, eyes open
    4. Center head within frame and present full head from top of hair to bottom of chin

It is seen as another breakthrough initiative in line with the vision of ‘Digital India’ and ‘Ease of Doing Business’. Foreign nationals and their family members will not be required to be physically present at FRRO office. Thus, this will enhance ease to foreign nationals and also, will help the Government to have better controls over the processes. Presently, the Government has introduced this facility in the four metro cities of India, which is expected to be replicated in other cities soon.

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)

REGISTRATION UNDER LEGAL METROLOGY – PACKAGED COMMODITIES

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The Department of Legal Metrology falls under the Department of Consumer Affairs, and is therefore concerned with fair and honest practices in relation to all aspect of trade. The Rules deal with goods that are packaged and provide what declarations are to be contained in a packaged commodity.

REGISTRATION

It is necessary for every manufacturer / packer / importer to get registered. Those who have registered under packaged commodity rules 1977, need not register again. All others should apply for registration. Submission of application to registration meets legal requirement.

Registration of manufacturers, packers and importers.-

(1) Every individual, firm, Hindu undivided family, society, company or corporation who or which pre-packs or imports any commodity for sale, distribution or delivery shall make an application, accompanied by a fee of rupees five hundred, to the Director or the Controller for the registration of his or its name and complete address; and every such application shall be made,-

(i) in the case of an applicant pre-packing or importing any commodity at the commencement of these rules, within ninety days from such commencement; or

(ii) in the case of any applicant who or which commences pre-packing or importing of any commodity after the commencement of these rules, within ninety days from the date on which he or it commences such pre-packing.

Every application shall contain the following :-

(a) the name of the applicant;

(b) the complete address of the premises at which the pre-packing or import of one or more commodities is made by the applicant; and

(c) the name of the commodity or commodities pre-packed or imported by the applicant. Explanation: In this sub-rule, ‘complete address’ has the meaning assigned to it in the explanation to sub-rule (1) of rule 10.relating to Declaration of name and address of the manufacturer, etc.

ALTERATION IN THE REGISTRATION

For making any alteration in the registration certificate issued under sub rule (1), a fee of rupees 100 shall be paid by the concerned manufacturer or packer or importer to the Director or Controller.

On receipt of the application made the Director or Controller, who shall be the Registering Authority, shall

(a) if the application is not complete in all respects, return the same to the applicant within a period of seven working days from the date of receipt of the application;

(b) if the application is complete in all respects, register the applicant and grant a registration certificate to the applicant to that effect.

NOT APPLICABILITY OF PC RULE 2011

The following are the items on which the PCR, 2011are not applicable:-

  1. Any raw material for the use of Industrial purpose only.
    2. Any part or material used in any Workshop, Service Station repairing bicycle, tricycle and Motor cycle.
    3. Fast food items packed by Restaurant/hotel and the like.
    4. Drugs/Medicines covered under Drug Control Order 1955. Scheduled and Non Scheduled formulation covered under the Drugs (Price Control) Order, 1995 made under Section 3 of Essential Commodities Act, 1955 (10 of 1955).
    5. Agricultural form products in packages of above 50 Kg.

Nomination of the authorised person by the Company

According to Section 49(2) of the Act, every company has to nominate one director to be the compliance officer for compliance under the Act and the Rules. If no such director is nominated, entire board of the directors, company secretary, manager and all other officials who were in the office at the time of offence committed, shall be held responsible and punished accordingly.

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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, Department of Consumer Affairs, Etc for resolving their doubts or for clarifications.