CORPORATE AND PROFESSIONAL UPDATES 12TH JULY 2018

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  • Gujarat HC sets-aside order of Settlement Commission (‘ITSC’) treating assessee’s settlement application as abated, relies on SC ruling in Star Television News Ltd. to hold that Settlement Application would not abate if there is no delay attributable to the applicant; Notes that though in earlier round of proceedings, assessee had agreed to abide by outcome of decision of SC in Prabhu Dayal case, SC in that case had allowed withdrawal of petition without ruling on merits, however, the Settlement Commission treated the assessee’s Settlement applications as abated relying on SC ruling in Prabhu Dayal case; [TS-368-HC-2018(GUJ)]
  • Delhi ITAT rules that consideration received by assessee (Investment management company) during AY 2005-06 for retiring as Principal Asset Management Company (‘AMC’) of Sun F&C Mutual Fund,is taxable as capital gains; Notes that total 14 schemes were transferred by assessee pursuant to its retirement, out of which 12 schemes were floated by assessee-company and remaining 2 were acquired (on which assessee claimed depreciation @ 25% treating it as intangible asset); [TS-370-ITAT-2018(DEL) ]
  • CBDT Chairperson expressed disappointment that a special drive launched in this regard in 2015 had failed to achieve its mandate of resolving taxpayers’ grievances and was under-utilised. Now he has issued a stern directive to IT offices asking them to curb “high-pitched” assessments against taxpayers and ensure that AO who issue such irrational orders are transferred and face disciplinary action.

INDIRECT TAX

  • 46 GST law amendments likely; employers may get to claim input tax crediton food, transport, and insurance provided to employees under any law, once the proposed amendments to the GST Act are approved by Parliament and the state legislatures.

FAQ on GST Audit:

  • Query: Whether any prior intimation is required before conducting the audit?
  • Answer:Yes, prior intimation is required and the taxable person should be informed at least 15 working days prior to conduct of audit.

MCA UPDATES

  • MCA notified DIR-3 KYC vide Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2018 While filing DIR-3 KYC form use PAN based DSC in case of Indian Nationals i.e., DSC should contain PAN as specified in the form.
  • MCA has notified the Companies (Acceptance of Deposits) Amendment Rules, 2018 which shall come into force from 15-08-2018. Now Certificate of statutory auditor of the company is required to be attached in form DPT-1.
  • DIR-3 KYC notified vide Companies(Appointment and Qualification of Directors) Fourth Amendment Rules, 2018 dated 5th July 2018 would be made available shortly for filing purposes.

RBI UPDATES

  • RBI introduced online application namely “Foreign Investment Reporting and Management System” (‘FIRMS’), for implementation of the Single Master Form (‘SMF’), containing 9 reports would be made available w.e.f. August 1, 2018;
  • The National Centre for Financial Education (NCFE) was set up with support from all financial sector regulators i.e. RBI, SEBI, IRDAI and PFRDA for implementation of the National Strategy for Financial Education (NSFE).

OTHER UPDATES

  • IBBI has notified revised norms for IRP paving the way for home buyers to seek relief as financial creditors, putting in place clear timelines to be followed by RP and permitting withdrawal of insolvency applications subject to certain conditions.

KEY DUE DATES

  • GSTR-3B (Jun 2018)-Jul 20th, 2018
  • GSTR-5 (Jun 2018)-Jul 20th, 2018
  • GSTR-6 (Jul’17 – Jun’18)- Jul 31st, 2018
  • GSTR-4 (Apr-Jun, 2018)-Jul 18th, 2018
  • GSTR-5A (Jun 2018)-Jul 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (Apr-Jun, 2018)-Jul 31st, 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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RBI INTRODUCED MANDATORY FDI REPORTING THROUGH SINGLE MASTER FORM (SMF)

Image result for fdi in indiaIn a partial manner notification is applicable to the existing FDI. It is expected from the company that company provide all the details of existing FDI in the prescribed format and prescribed manner as available this respective notification.

SMF gives the facility related to reporting of total foreign investment in an Indian entity and also provide facility related to investment in investment vehicle to the person outside India.

Before any implementation this process, Reserve Bank of India will provide specific format from 28.06.2018 to 12.07.2018 to Indian entities for input the data of foreign investment.

Before the implementation of Single Master Form (SMF), RBI would provide an interface of specified format called Entity Master File (EMF) to Indian entities for input the data of total foreign investment. From 28.06.2018 to 12.07.2018 RBI will made available the interface in their website.

The Indian entities who will not qualify the pre-requisite requirement will not able to receive any foreign investment in India and those Indian entities will be considered as non-compliant in Foreign Exchange Management Act (FEMA), 1999 and regulations.

WHAT IS SMF:-

  • RBI will introduced a SMF for fulfil the objective of integration of various reporting structure of foreign investment in India. The SMF is required to be filed online and also provide a facility to Indian entity for reporting total foreign investment. Single Master File is a substitute of individual reporting currently done through “Form FC-GPR, FC-TRS, LLP-I, LLP-II, ESOP, CN&DRR”. However the requirement of submitting the annual statement of “foreign liabilities and assets” to RBI is continue 15 July every year.
  • The Single Master Form will be integrated reporting forms which will event-based form helping the person residing outside India in reporting the total foreign investment.
  • Entity Master Data (EMD) Annex-I : It is required to all Indian entities to provide all the details of foreign investment received by them till date called as Entity Master Data and the format of is given in Annex-I of said notification.
  • SMF will also provide the facility of reporting total foreign investment in an Indian entity via company, LLP & other investment vehicles(REITs)/Infrastructure Investment Trusts(Invlts)/Alternative Investment Funds(AIFs).
  • SMF is the substitute of existing forms such as:
    • For issue & transfer of shares – FC-GPR & FC-TRS.
    • For foreign direct investment & foreign disinvestment/transfer of capital contribution in LLP – FORM LLP-I & II.
    • For issue of employee stock option plan – FORM ESOP
    • For issue or transfer of convertible notes – FORM CN
    • For issue or transfer of depository receipts – FORM DR
  • Single Master Form will also compulsory in following:-
    • Reporting the Downstream Investment (Indirect Foreign Investment) in a company or LLP via FORM DI.
    • Reporting of investment by person residing outside India in an investment vehicle (including REITs, Invlts &AIFs) via FORM InVi

 SUBSEQUENT INVESTMENTS IN ANNEX-2:-

For any subsequent foreign investments, an integrated reporting structure of various types of foreign investment introduced which will be called SMF. The format of SMF is given in Annex 2 of said notification. While the format of the form has been provided as Annex 2 to the circular, RBI is yet to notify the form. Once notified, the form will be available in the master direction on reporting as well as on the website for the entities to file it as and when required.

CONSEQUENCES OF NON-COMPLAINT BY INDIAN COMPANIES CANNOT RECEIVE FDIS

The Indian entities who will not qualify the pre-requisite requirement will not able to receive any foreign investment in India and those Indian entities will be considered as non-compliant in Foreign Exchange Management Act (FEMA), 1999 and regulations. FEMA requires observation of its provisions in letter and spirit and if any contravention may land in penalties on the erring company and individuals. There are some conditions and stipulations in case of FDI, ODI, investment by individuals in foreign shares, purchase of assets in foreign countries, extending guarantees, availing ECBs, supplier’s credit.

RJA comments

The integration of the extant reporting structures is a positive move made by RBI to simplify and rationalize reporting for foreign investment in India. This crucial amendment is in line with the SEBI circular which was issued for the listed companies for monitoring FDI limits.

There may be certain practical difficulties before implementation of the new form for the Indian entities to collate details on foreign investment, especially as the window for uploading such data on the RBI interface is open for only 15 days. Now severe consequences attached to non-filing, Indian entities having foreign investment must prepare to submit the information timely. 

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. The information in this blogs is solely for the addressee and should be treated as confidential & non-binding

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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