Complete Guidance on Udyog Aadhar registration in India

Complete Guidance on Udyog Aadhar registration in India – Registration procedure, Benefits and Documents required

Udyog Aadhaar Registration – Process, Documents Required, Benefits ...

In recent times, the Government of India has launched the Udyog Aadhaar registration process in order to improve the small-scale businesses in the region. Previously, if a person wants to start a company, he/she must be registered with both the small-scale industry and the MSME.

This step has now been facilitated by the incorporation of only 2 types under the Udyog Aadhaar Registration which are Entrepreneur Memorandum I and Entrepreneur Memorandum II, whereas the former one was used to fill out 11 various types of forms which were required earlier.

The major characteristics of Udyog Aadhaar

  • Enrolment is online instead of personal registration. It’s just a button of a task.
  • UAM can be registered by self-declaration of the company’s data.
  • Details required for registration: Personal Aadhaar number, name of the industry, address, bank details and some common information.
  • You can file more than one Udyog Aadhaar with the same Aadhaar number.
  • No filing fee.
  • After the registration number has been filled in and submitted, it is obtained in the mail-id issued.

Udyog Aadhaar Registration is a fully online process. Companies listed under the Udyog Aadhaar are eligible to obtain incentives from a range of government schemes, such as discounts, simple loan approvals, etc.

What kind of Benefits of registration of Udyog Aadhaar :

The main advantages of registration under Udyog Aadhaar are listed below:

  1. The MSME registered enterprises get the financial support from the Government to participate in foreign expo. i.e MSME registered companies receive financial support from the Government to participate in the foreign exhibition
  2. Quick Accessibility of Collateral Free Bank loans : Once registered with MSME, the micro, small or the medium enterprise would be eligible for all government scheme benefits like without guarantee loan, easy loan, loan with low rate of interest.
  3. 50 per cent grant for patent registration
  4. Simplification of obtaining licenses, approvals and other registrations
  5. ISO Certification Reimbursement
  6. NSIC Performance and Credit Rating Subsidy:
  7. Concession of electricity bills and more
  8. The enterprise is also entitled for the Government subsidies:

Potentially Details Required of Udyog Aadhaar Registration:

The information needed at the time of registration of Udyog Aadhaar are as follows:

  1. 12 Aadhaar number given to the client. In the case of a company, corporation or any other entity, the Aadhaar number of Managing Director, Approved Partner, etc. shall be given.
  2. Name of the organization under which it carries out its business.
  3. Type of business entity such as individual, firm, company, etc.
  4. Postal Business address for communication purposes, including contact numbers and e-mail address.
  5. Date of beginning of the business.
  6. Details of the previous validation of the MSME.
  7. Banking details of the client, including the bank account number and the IFSC code.
  8. Main business areas – service or manufacturing.
  9. The number of staff in the company.
  10. Complete amount of investment by the company in terms of machinery and equipment.
  11. Social Category – The applicant may pick the Social Category (General, Scheduled Caste, Scheduled Tribe or Other Backward Castes). Evidence of belonging to SC, ST or OBC can be sought by the proper authority, if and when necessary.
  12. Physically Disabled-The Applicant may choose a Physically Disabled Entrepreneur status.

13. Plant Location-Applicant can attach multiple plant locations to one registration by clicking the    Attach Plant button.

  1. Major Activity-The main activity, i.e. “Manufacturing” or “Service,” may be chosen by the company for Udyog Aadhaar. If your business involves both type of activity and if major work involves Manufacturing and a small portion of activity involves the Service sector, then select your main activity type as “Manufacturing” and if major work involves Services and a small portion of activity involves Manufacturing, then select your main activity type as “Services”
  2. National Industrial Classification Code (NIC Code)-The individual may choose various National Industrial Classification-2008 (NIC) Codes to protect all their activities. Which means that users can select multiple NICs from the Manufacturing and Service sector by clicking the “Add More” button. If you want to add Manufacturing then select the “Manufacturing” radio button and click the “Add More” button otherwise if you want to add Service then select the “Services” radio button and click the “Add More” button. The NIC codes are drawn up by the Central Statistical Organisation (CSO) under the Ministry of Statistics and System Implementation, Government of India. The applicant can use the National Industrial Classification-2008 (NIC) Scanning facility codes to escape a 3-step selection process.

Step by step procedure of Udyog Aadhaar Registration

Registration system and Process of Udyog Aadhar along with the requirement of information for Registration: Below is the legal process for the registration of Udyog Aadhaar:

1. Online visit the link of https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx

2. Enter the Aadhaar number and the name of the individual who is the agent of the organization and confirm the Aadhaar number:

3. Enable the OTP

4. Upon validation, it will be redirected to Udyog Aadhaar form, which will be as follows: and Verify further Enter the following information in the field:

• Social group (e.g. SC / ST / OBC / General)

• Sex and categories

• Whether is He not physically handicapped

• Name of Enterprise

• Type of Organisation

• PAN no of the relevant person

• Address of the business entity

• The contact address of the organization and the telephone or email number of the designated person;

• Date of start of business

• Past registration details of MSME, if any

• Corporate bank info like IFSC code and bank account number

• Main activity of the unit (whether engaged in production or service)

• National Industrial Classification (NIC) Operation Code (One or more activities can be added)

• Overall number of individuals working by the company

• Overall financial investment of the company

• The district where the entity is placed

• Click on the checkbox for the declaration and submit

5. After acceptance, you will obtain an OTP for submission of the form-enter OTP and click on the final submission button.

6. After submission, it will be forwarded to the Udyog Aadhaar Memorandum page.

7. Below the Udyog Aadhaar Memorandum, you can find the Udyog Aadhaar Certificate button. Click on it to generate the Udyog Aadhaar Certificate:

8. After clicking the Create Certificate button, the Udyog Aadhaar Card will be issued.

9. If you need qualified assistance for Udyog Aadhaar, please write to us at info@carajput.com or click Here to Subscribe to Online Service.

May you register Udyog Aadhaar Registration Online without an Aadhaar Number?

No Applicant or authorized signatory who is not registered for Aadhaar shall be required to apply for Aadhaar enrolment and, if he or she is entitled to receive Aadhaar in compliance with section 3 of the Aadhaar Act, he or she may visit any Aadhaar enrolment center for Aadhaar enrolment.

  •  A.   Provided that by the time Aadhaar is allocated to the person, the registration of the UAM shall be registered by the DIC or MSME-DI concerned on behalf of that undertaking, subject to the creation of the supporting following information as an alternate and feasible form of identifying.
  • If he’s registered, his Aadhaar Enrolment ID slips; Ok
  •  copy of his application for enrolment by Aadhaar
  • B.  Any of the below papers, namely: – bank photo passbook; or voter ID card; or passport; or driving license; or PAN card; or employee photo ID card issued by the Government.

Post by Rajput Jain & Associates

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. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. 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)

Brief note on -Payment security to MSME according to Law  as per the MSME provision

How MSME SAMADHAN help small business in delayed payment?

Section 15 of the MSME Act states that if the supplier supplies products or offers any services to any purchaser, the consumer shall make the payment on or before the date stated in the agreement and, if there is no agreement before the date specified. The proviso to this Section states that the credit period provided by the seller shall not exceed 45 days from the date of acceptance or from the date of acceptance deemed.

  • “Approved date” means the day immediately following the expiry of the 15-day period from the date of acceptance or the date of considered acceptance by the purchaser of any products or services from the supplier;
  • ‘Day of acceptance’ means,-( a) the day on which goods are actually delivered or services are rendered; or (b) where the customer poses some complaint in writing concerning the acceptance of products or services within 15 days of the day on which products are delivered or services are rendered, the day on which the supplier eliminates such complaint;
  • ‘Day of deemed acceptance’ means that the buyer does not object in writing to acceptance of products or services within 15 days of the day on which the products are delivered or services are rendered, the day on which the goods are actually delivered or services are rendered;

Thus you are not entitled to pay interest under the MSMED Act in respect of delayed payment.

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)

Micro, Small and Medium Enterprises

Overview on MSME’s Companies:

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Definition of MSME:-

The Micro Small & Medium Enterprises (MSMEs) are defined in India in the MSME Act 2006 according to capital investment made in plant and machinery, excluding investments in land and building.

Manufacturing units having investment below Rs 25 lakh were termed Micro, those between Rs 25 lakh and Rs 5 crore termed as Small and from Rs 5 crore to Rs 10 crore as Medium. Similarly, for Service units, corresponding investment thresholds were upto Rs 10 lakh Micro, between Rs 10 lakh to Rs 2 crore Small and between Rs 2 crore to Rs 5 crore Medium.

Mandatory filling of MSME Companies:

According to the rules every specified company are required to file MSME Form I with Roc in in the situation mentioned below:

Two Type of Returns required filing by “Specified Companies” like:

  • One Time Return.
  • Half Yearly Return.

Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of this order within thirty days from the date of publication of this notification which is 22nd January.

Every specified company shall file a return as per MSME Form I annexed to this Order, by 31st October for the period from April to September and by 30th April for the period from October to March.

Specified Company means Every Company “Public or Private” who Received Goods or Services ‘from’ Micro or Small Enterprises ‘of which’ Payment Due or Not Paid till 45 days.

HALF-YEARLY RETURN BY MICRO OR SMALL ENTERPRISES WITH REGISTRAR OF OUTSTANDING PAYMENTS:

All companies having outstanding payments to MSME for more than 45 days from the date of acceptance or deemed acceptance of goods or/and services, who are not required to file the MSME Form I.

The Companies who have no outstanding payments to MSME or such outstanding payments are for not more than 45 days are not required to file this form.

DUE DATES FOR FILLING “MSME FORM 1”

Every Company within 30 days from the date of the notification i.e. 22nd February, 2019 (22nd January, 2019 + 30 days) is required to file this form as Initial Return.

Every company within 30 days from the last day of half year shall file regular half yearly return.

  • October 31st for the period1st April to 30th September.
  • April 30th for the period01st October to 31st March.

DETAILS AND DOCUMENTS TO BE ENCLOSED WITH THE FORM

INITIAL RETURN:

Total outstanding amount, Details of suppliers and payments due (PAN of Suppliers)

REGULAR HALF YEARLY RETURN

Total outstanding due for the period and particulars of suppliers therein for the period, Reasons for delay in payment.

Penalty Provision as per Section 405 (4) of the Companies Act, 2013, if the said details are not submitted to MCA on or before 20/02/2019 or the information submitted is incorrect or incomplete.

Fine

Company – up to Rs. 25,000

Directors, CFO and CS

Imprisonment – up to 6 Months, or

Fine – not less than Rs. 25,000 up to Rs. 3, 00,000 per person

NOTE: Non-compliance of such provisions will lead to punishment and penalty under the provision of the Act.

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com 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- 9555555480.

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 9, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 9, 2016

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DIRECT TAX

IT: There cannot be a notice for re-assessment inasmuch as the question of re-assessment arises only when there is an assessment in the first instance – M/s Standard Chartered Finance Ltd. Vs. CIT, Bangalore & Anr (2016 (3) TMI 150 – Supreme Court)
IT – VDS’ 2016: Cases where notices have been issued or search has taken place or individuals against whom Govt. has prior information from another Country won’t be eligible for scheme.
INCOME ACCRUEL OF INTREST :Where assessee was following mercantile system of accounting, once interest amount had been credited to assessee and tax had also been deducted by payer, assessee could not take plea of not offering it as income on ground that he had not actually received same – [2016]  (Mumbai – Trib.)
• CBDT notifies 15% depreciation allowance on Oil Wells. Notification 13/2016.

INDIRECT TAX

ST: Management Maintenance and Repair Services – Whether notional interest to be taken as value of service – prima facie case is against the appellant since Notional interest is to be included in the value of services – Satya Prakash Builders Pvt. Ltd. Vs. CCE&ST, Jaipur-I (2016 (3) TMI 137 – CESTAT New Delhi
• 6% Tax on online advertisement / Google Tax, Such provisions are applicable from 1st June, 2016.The levy clearly is targeted to tax various online advertisements companies like YouTube , Google , Facebook , Twitter etc.

OTHER UPDATES

Bank Branch Statutory Audit: Banks have received the lists from RBI and commenced sending emails to the prospective Auditors.

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

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 8, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 8, 2016

The Ongoing Controversy On Erroneous Applicability Of Dividend Distribution  Tax Finally Ends    

During the past quarters, the provisions of law regarding buy-back of shares since introduction of dividend distribution tax (‘DDT’) under section 115Q of the Act w.e.f. 01.04.2003 till 31.05.2013 are being interpreted in a conflicting manner by the tax authorities and taxpayers, thereby giving rise to disputes on this issue. It has been contended that subsequent to introduction of section 115QA in the Act , the income-tax authorities, in some cases have sought to re-characterize the purchase consideration received on account of buy-back of shares, undertaken prior to 01.06.2013, as dividend and accordingly, subjecting the amounts so distributed by the companies to DDT. This has lead to un-ended litigation and undue harassment to the tax payers.

In a welcome move, the CBDT has come up with a clarification so far as income arising to the shareholder on but back of shares between the period 01.04.2000 till 31.05.2013 would be taxed as capital gains in the hands of the recipient in accordance with section 46A of the Act and no such amount shall be treated as dividend in view of provisions of section 2(22)(iv). The ongoing controversy is enclosed herewith along with the latest CBDT Circular No. 03/2016 dt. 26th Feb 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact:  info@carajput.com or call at 011-233 433 33

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 7,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 7,2016

BRIEF SUMMARY OF THE AMENDMENTS PROPOSED BY THE FINANCE BILL, 2016

(Income Tax & Service Tax)

Part-I: Amendments Proposed in the Income Tax

  • No change in Tax rates or Income slabs.
  • Tax Rebate u/s 87A has been increased from Rs.2,000 to Rs.5,000 for the taxable income Upto Rs.5,00,000. (No Tax up to an Income of Rs.3 Lac)
  • Deduction for Rent paid u/s 80GG increased from existing Rs.24,000 PA to Rs. 60,000 PA.
  • Tax Audit Limit U/s 44AB for the Professionals increased from Rs.25 Lac to Rs.50 Lac
  • Increase in turnover limit under Presumptive Taxation scheme u/s 44AD from Rs.1 Crore to Rs. 2 Crores
  • Extension of Presumptive Taxation to Professionals – 50% of Gross Receipts upto Rs.50 Lac
  • Accelerated depreciation under Income Tax will be limited to maximum of 40%
  • Benefit of deductions for Research would be limited to 150% from 01.04.2017 and 100% from 1.4.2020
  • Benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.03.2020.
  • The weighted deduction under section 35CCD for skill development will continue up to 01.04.2020
  • New manufacturing companies incorporated on or after 1.3.2016 to have an option to be taxed at 25% + SC + Cess but no profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation but subject to MAT.
  • Lower the corporate tax rate for the next financial year for relatively small enterprises, i.e, Companies with turnover not exceeding Rs.5 crore (in the financial year ending March 2015) to 29% + SC + Cess.
  • 100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019, however MAT will apply in such cases.
  • 10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident.
  • Non-banking financial companies (NBFCs) shall be eligible for deduction to the extent of 5% of its income in respect of provision for bad and doubtful debts.
  • Long Term Capital Gain Benefit in case of securities of unlisted companies – Holding Period reduced  to 2 years from 3 Years
  • Non Corporate Assessees to pay Advance Tax in 4 installments on 15thJune – 15%, 15th Sep – 45%, 15thDec-75% & 15th Mar-100% (similar to the Corporate)
  • New condition for conversion of a company into Limited Liability Partnership (LLP). The value of the total assets in the books of accounts of the company in any of the three previous years preceding the previous year in which the conversion takes place, should not exceed five crore rupees
  • Processing of  I T Returns u/s 143(1) be mandated before assessment u/s 143(3)
  • Time limit for assessment, reassessment and recomputation – the period, for completion of assessment u/s 143 or 144 be changed from existing two years to twenty one months from the end of the assessment year in which the income was first assessable. Now Assessment by Dec 31stinstead of 31st
  • Determination of residency of foreign company on the basis of Place of Effective Management (POEM) is proposed to be deferred by one year.
  • Commitment to implement General Anti Avoidance Rules (GAAR) from 01.04.2017.
  • Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS). Annuity fund which goes to legal heir will not be taxable.
  • In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 01.04.2016.
  • Limit for contribution of employer in recognized Provident and Superannuation Fund of  1.5 lakh per annum for taking tax benefit.
  • 100% deduction for profits to an undertaking in housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply.
  • Additional interest deduction of Rs.50,000 PA for loans up to Rs.35 Lac sanctioned in 2016-17 for first time home buyers, where house cost does not exceed Rs.50 Lac.
  • Distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax, in respect of dividend distributed after the specified date.
  • Dividend Receipts in excess of Rs.10 Lac to be taxed @ 10%
  • Individuals with Income above 10 Lac to pay 15% Cess against 12%
  • TCS / TDS @ 1 % on purchase of luxury cars exceeding value of Rs.10 Lac and purchase of goods and services in cash exceeding Rs. 2Lac
  • Securities Transaction tax in case of ‘Options’ is proposed to be increased from 0.017% to 0.05%.
  • Equalization levy of 6% of gross amount for payment made to non- residents exceeding ` 1 Lac a year in case of B2B transactions.
  • Domestic VDS Scheme for undisclosed income @ 45%.
  • New Dispute Resolution Scheme – No penalty in respect of cases with disputed tax up to Rs.10 Lac in other cases 25% of the minimum imposable penalty.
  • No discretion of AO on imposition of Penalty.
  • Penalty rates to be 50% of tax in case of underreporting of income and 200% of tax where there is misreporting of facts.
  • Disallowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under rule 8D of Section 14A of Income Tax Act.
  • Mandatory stay of demand once the assessee pays 15% of the disputed demand, while the appeal is pending before CIT (Appeals).
  • Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from Rs.15 Lac to Rs.50 Lac.
  • No higher TDS for non-residents if alternative documents to PAN card provided.
  • Expansion of e-assessments Scheme to assessees in 7 mega cities in the coming years.
  • Interest at the rate of 9% PA against normal rate of 6% PA for delay in giving effect to Appellate order beyond ninety days.
  • ‘e-Sahyog’ to be expanded to reduce compliance cost, especially for small taxpayers.

TDS limits increased as below

  •  192A – Payment of accumulated balance due to an employee  from 30,000 to 50,000
  • 194BB – Winnings from Horse Race from Rs. 5,000 to Rs. 10,000
  • 194C – Payments to Contractors – from Aggregate annual limit of 75,000 to Aggregate annual limit of 1,00,000
  • 194LA – Payment of Compensation on acquisition of certain Immovable Property – from 2,00,000 to Rs. 2,50,000
  • 194D – Insurance commission from Rs. 20,000 to 15,000
  • 194G – Commission on sale of lottery tickets from 1,000 to 15,000
  • 194H – Commission or brokerage  from Rs. 5,000 to 15,000

TDS Rates reduced as below

  • 194DA – Payment in respect of Life Insurance Policy – from 2% to 1%
  • 194EE  – Payments in respect of NSS Deposits – from 20% to 10%
  • 194D – Insurance commission – from 10% to 5%
  • 194G – Commission on sale of lottery tickets – from 10% to 5%
  • 194H – Commission or brokerage – form 10% to 5%.

TDS Sections Omitted w.e.f. 01.06.2016 as below

  • 194K Income in respect of UnitS
  • 194L Payment of Compensation on acquisition of Capital Assets

 Part-II: Amendments Proposed in Service Tax Law

Exemption of Service Tax on 

  • Services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana
  • Services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship.
  • General Insurance Services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability.
  • Annuity services provided by NPS and Services provided by EPFO to employees.
  • Exemption from service tax on construction of affordable houses up to 60 square metres under any scheme of the Central or State Government including PPP Schemes.
  • Reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases.
  • Krishi Kalyan Cess, @ 0.5% on all taxable services, w.e.f. 1 June 2016 – CENVAT credit available. Total ST now 15% as against 14.50 % earlier.
  • Assignment of right to use the spectrum and its transfers has been deducted as a service leviable to service tax and not sale of intangible goods.
  • Additional options to banking companies and financial institutions, including NBFCs, for reversal of input tax credits with respect to non- taxable services.
  • The power to arrest is being restricted only to situations where the tax payer has collected the tax but not deposited it to the credit of central government, and that too above a threshold of Rs.2 crore. The monetary limit for launching prosecution is being increased to Rs. 2 crore of Service Tax evasion.

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

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 6,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 6,2016

UB1

Taxability of Dividend in the hands of Shareholders- Union Budget 2016

Taxation of dividends has seen several twists and turns over the years. In order to reduce cost of collection and curb tax evasion through non-reporting of dividends by shareholders, Government had introduced section 115-O in the Income-tax code through Finance Act, 1997. The section presently provides for 15% tax on dividends distributed by a domestic company. After considering grossing up, surcharge and cess, the effective rate of dividend distribution tax (‘DDT’) stands at approximately 20%.

Finance Bill, 2016 has introduced a concept of progressive taxation of dividends. Proposed section 115BBDA seeks to tax dividends in excess of INR 1 Million @ 10% (plus surcharge and cess) in the hands of individuals, HUFs, partnership firms and LLPs resident in India.

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

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 5,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 5,2016

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Direct Tax

  • TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE: Where assessee had benchmarked its international transactions on TNMM basis and TPO had neither disputed assessee’s claim that TNMM was most appropriate method, nor comparables selected by assessee, it was not open for TPO to reject benchmarking done by assessee and make adhoc ALP additions in value of international transactions – [2016]  16 (Mumbai – Trib.)
  • ON BORROWED CAPITAL: Where assessee paid interest on borrowed capital which was used for acquisition of windmill for extension of existing business of generation of electricity through windmill, interest could not be allowed till capital asset acquired by assessee was put to use – [2016] INTEREST 277 (Chennai – Trib.)
  • UTILIZATION OF CAPITAL GAINS : Where assessee purchased a vacant site but couldn’t complete construction of house within prescribed period of three years to avail exemption from capital gain, whole of capital gain was liable to be taxed in previous year in which period of three years expired from date of sale of original asset

Indirect Tax

  • Following activities undertaken by the applicant would not amount to manufacture or deemed manufacture under Section 2(f) of the Central Excise Act 1944 namely; Inspection testing and installing batteries Cleaning lint brushing and deodorizing Touching up and re-stitching Filing debundling and jewellery correction Activities related to spectacles and frames Folding hanging and ironing Polishing shinning and coating Tagging Freebies Protective stickering Placing the products in original box Inserting warranty card Inserting moisture absorbing tablets Inserting books mark and Replacing shoe laces- (/s Amazon Seller Services Private Limited, Bangalore Versus The Commissioner of Central Excise, Thane-I – 2016 (3) TMI 69 – AUTHORITY FOR ADVANCE RULINGS).
  • Claim of interest on delayed Refund – delay in grant of refund – relevant date to be computed from the date of application of refund or from the date of rectification of defect in the refund application – The adjudicatory process by no stretch of imagination can be carried on beyond three months. It is required to be concluded within three months – Interest allowed from the date of application- (Union of India & Others Versus M/s Hamdard (Waqf) Laboratories – 2016 (3) TMI 68 – SUPREME COURT)

MCA Updates

SHARES – POWER OF COMPANY TO PURCHASE ITS OWN SECURITIES: In law, petitioner is entitled to buy back its own shares by means of a scheme under section 391 read with sections 100 – 104 of the Companies Act, 1956 , scheme cannot be said to be a colourable device to evade income tax, it is a legally permissible procedure which petitioner is entitled to follow to buy back its shares

Key Dates

E-Payment of Service Tax for Feb by companies: 06/03/2016

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

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 4, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED  MARCH 4, 2016

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Direct Tax

  • New Form 35 for Appeal to the Commissioner of Income-tax (Appeals) introduced vide CBDT NOTIFICATION dated 01.03.16.
  • Last day to pay advance tax is 15th March for payment of 100% of income tax for FY 15-16.
  • Time Limit for completion of property acquired or constructed with the borrowed capital increase from 3 year to 5 years for getting exemption u/s 24(b) in respect of Self Occupied House Property
  • Contributions made on or after the 1st day of April, 2016 by an employee participating in a recognised provident fund and superannuation fund, up to 40 % of the accumulated balance attributable to such contributions on withdrawal shall be exempt from tax.
  • 68 : No addition where creditability of creditors established. [Mahalaxmi Housing & Finstock Pvt. Ltd. vs. ACIT (ITAT Ahmedabad)].
  • CBDT notifies 15% depreciation allowance on Oil Wells. Notification 13/2016.
  • IT: Deduction u/s. 10B – Even though an estimation of excess stock in the middle of the year while accepting the Books of Accounts of the year is not generally permitted by various decisions of the ITAT since Assessee is eligible for deduction u/s. 10B on the additions/disallowance made on these units we are of the opinion that the same amount can be allowed for deduction u/s. 10B as the stock pertains to Hosur and Ongole units which are eligible for deduction u/s. 10B – Madhucon Granites Ltd. Vs. DCIT, Hyderabad (2016 (3) TMI 83 ITAT Hyderabad)
  • IT: Addition u/s. 68 – CIT(A) should not have rubbished the affidavit without going into the merits. Therefore in the interest of justice and fair play we restore this issue to the files of the A.O. – Shri Dinesh Tarachand Kasat and Others Versus The Dy. Commissioner of Income-Tax, Central Circle-1 (3) , Ahmedabad and Vica-Versa (2016 (3) TMI 91 – ITAT Ahmedabad)

Indirect Tax

  • Services of transportation of passengers by stage carriage excluded from Negative List (applicable w.e.f.1st June’ 2016) such services by a non-air-conditioned contract carriage will continue to be exempted, notification No. 09/2016-S.
  • Education services deleted from Negative List (Applicable w.e.f. the enactment of Finance Bill’ 2016)  but the service tax exemption on them is being continued by incorporating them in the general exemption notification (Notification No. 25/2012-ST) – notification No. 09/2016-ST.
  • CCI doubles limit of value of assets & turnover for determining entities combination. NOTIFICATION S.O. 675(E).
  • Prior permission to transfer Cenvat Credit after Amalgamation / Merger. [M/s. S.C. Johnson Products (P) Ltd. vs.  C.C.E. (CESTAT Delhi)]
  • Cenvat Credit can be claimed on the basis of photocopy of duty payment document.[Arbes Tools P. Ltd. vs. CCEx (CESTAT Mumbai)].
  • Increase in clean energy cess (Notification No. 1 & 2/2016 dated 29th Feb, 2016) applicable from 1st March, 2016.
  • DVAT: Due date for filing online Form 9 for FY 2014-15 has been extended to 31 MAR 2016.
  • DVAT: Digital Signatures made mandatory for filing DVAT-16 and DVAT-17 w.e.f. Q4-FY 2015-16 returns for dealers with GTO exceeding Rs.50 Lac in FY 2014-15.

MCA Updates

  • MCA: As the National Company Law Tribunal (NCLT) and its Appellate Authority is at an advanced stage of constitution and after its constitution, it is proposed to commence the provisions relating to Revival of Sick Companies (Chapter XIX) of Companies Act, 2013. The draft Rules for the Revival of Sick Companies (Chapter XIX) of Companies Act, 2013, have been prepared by a Committee consisting of Ministry officials and Experts drawn from various fields.

Other Updates

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

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

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 3, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 3, 2016

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INCOME TAX ACT

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Adjustments – Illustrations : Where business operation of assessee could not be carried on without services in question and same was to be outsourced and ostensible benefits were received from services rendered by AE, value of payments made to AE could not be taken as nil; consequent addition was to be deleted – [2016] 221 (Jaipur – Trib.)

Comparables and adjustments/Methods – General : Where in respect of international transactions entered into with AE, assessee was changing its stand with regard to application of most appropriate method from stage to stage, i.e., from TP study report to proceedings before Assessing Officer and DRP, matter was to be remanded back for disposal afresh – [2016] 234 (Pune – Trib.)

SECTION 115JB

MINIMUM ALTERNATE TAX

Computation of book profit : While computing book profit under section 115JB, Assessing Officer has no power to embark upon a fresh enquiry with regard to entries made in books of account of assessee-company; he has to rely upon authentic statements of accounts of company, being scrutinized and certified by statutory auditors – [2016]233 (Karnataka)

COMPANIES ACT

SECTION 397

OPPRESSION AND MISMANAGEMENT

Where pursuant to increase in their shareholding petitioners sought for reconstitution of board of directors but same was refused, petitioners were entitled to seek redressal under sections 397 & 398 against act of oppression and mismanagement – [2016]  219 (Bombay)

SEBI ACT

REGULATION 7 OF THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997

ACQUISITION OF 5 PER CENT AND MORE SHARES OR VOTING RIGHTS OF A COMPANY

No penalty could be imposed on failure to make disclosure of ‘sale’ under regulation 7(1A) within two days –[2016]  224 (SAT – Mumbai)

CENTRAL EXCISE ACT

SECTION 9

OFFENCES AND PENALTIES – CENTRAL EXCISE

Where prima facie quantification of duty shows alleged evasion of duty of Rs. 10 crores, offence is cognizable and non-bailable; therefore, arrests can be made by Intelligence Officers of department – [2016]  226 (Jharkhand)

SECTION 21

ARRESTS – CENTRAL EXCISE

In case of arrested persons, only Superintendent and higher officers of Central Excise have power to send them to Magistrate as per sections 19 and 21; since Intelligence Officers have not been empowered in this behalf, judicial remand ordered at request of Intelligence Officers is void – [2016]  226 (Jharkhand

CST & VAT

SECTION 6A OF CENTRAL SALES TAX ACT 1956

BURDEN OF PROOF, ETC., IN CASE OF TRANSFER OF GOODS CLAIMED OTHERWISE THAN BY WAY OF SALE

Assessee was converting spent catalyst into support catalyst (‘goods’) for its customers. It received spent catalyst from various customers from outside and within the State of Maharashtra and after processing the same, support catalyst were returned back to the customers. The assessee claimed that it had charged only for job work done for the customers and goods were not sent back by way of sale –  261 (Bombay)

CENTRAL EXCISE RULES

RULE 173Q

PENALTY – GENERAL

In absence of any specific provision for levy of penalty under Automobile Cess Rules or under parent Act Industries (Development and Regulation) Act, 1951, no penalty can be levied for failure to pay automobile cess –[2016] 227 (Jharkhand)

STATUTES

DIRECT TAX LAWS

Section 10(46) of the Income-tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority – NOTIFICATION NO. SO 530(E) [NO.8/2016 (F.NO.196/32/2014-ITA-I)], DATED 19-2-2016

Section 80CCD of the Income-tax Act, 1961 – Deduction – Contribution to Pension Scheme of Central Government – Notified Pension Scheme – NOTIFICATION NO. SO 529(E) [NO.7/2016 (F.NO.173/394/2015-ITA-I)], DATED 19-2-2016

Section 10(15) of the Income-tax Act, 1961 – Exemptions – Interest on Bonds, Debentures, Securities, etc. – Notified Bonds or Debentures issued by public sector Companies under section 10(15)(iv)(h) – NOTIFICATION NO. SO 520(E) [NO.6/2016 (F.NO.178/1/2016-ITA-I)], DATED 18-2-2016

Income-Tax (Second Amendment) Rules, 2016 – Amendment in Rules 10THB, 10THC 10THD and Form No.3CEFB – NOTIFICATION NO.SO 502(E) [NO.5/2016 (F.NO.142/7/2014-TPL)], DATED 17-2-2016

CORPORATE LAWS

Insurance (Appeal to Securities Appellate Tribunal) Rules, 2016 – NOTIFICATION NO. GSR 179(E) [F.NO.12018/1/2015-INS.II], DATED 17-2-2016

Insurance (Procedure for Holding Inquiry by Adjudicating Officer) Rules, 2016 – NOTIFICATION NO. GSR 178(E) [F.NO.12018/1/2015-INS.II], DATED 17-2-2016

FEM (Transfer or Issue of Security by A Person Resident Outside India) (Second Amendment) Regulations, 2016 – Amendment in Regulations 2, 14, Schedule 1, Schedule 9 and Substitution of Schedule 11 –NOTIFICATION [NO.FEMA.362/2016-RB]/GSR 166(E), DATED 15-2-2016

FEM (Transfer or Issue of Security by A Person Resident Outside India) (Amendment) Regulations, 2016 – Amendment in Regulations 2, 5 and Substitution of Schedule 3 & Schedule 4 – NOTIFICATION [NO.FEMA.361/2016-RB]/GSR 165(E), DATED 15-2-2016

Section 46 of the Prevention of Money-Laundering Act, 2002 – Special Courts – Application of Cr. PC, 1973 to proceedings before Special Court – Appointment of Special Public ProsecutorS – NOTIFICATION NO. S.O. 506(E) [F.NO.C-18016/7/2015-AD.ED], DATED 17-2-2016

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