corporate and professional update

MCA has recently introduced

COMPANIES ACT

Companies (Incorporation) Amendment Rules, 2015 vide Notification dated 1st May 2015.

Key features being:-

• Verification of signature of promoter(s)/director(s) in Form INC 10 has been done away  with.
• A Private Limited Company may get itself converted into OPC if its Paid up capital is  less than Rs. 50 Lacs and turnover less than Rs. 2 Cores.
• Penalty for violation of rules regarding OPC has been halved.
• New Rule 36 has been introduced and Form INC-30, INC-31for model Memorandum    of Association & Articles of Association introduced.
• Form INC -29 introduced for simplifying the process of filing forms for the    Incorporation of Company.

Indirect Taxes:

Credit of Cess can be used for payment of Excise Duty*

Taking a step towards GST, in Union Budget 2015, Honorable Finance Minister has proposed to abolish Education Cess and Secondary and Higher Education Cess (collectively referred as ‘cess’); in case of Excise Duty w.e.f. 1st March, 2015 and in case of Service Tax w.e.f. a date to be notified after the enactment of Finance Bill, 2015.

This amendment has raised questions regarding fate of cess, majorly, in following cases:

1. Closing balance of cess as on 28th February, 2015;
2. Cess in respect of inputs and capital goods received in factory in F.Y. 2014-15 but CENVAT Credit is omitted to be availed;
3. Cess in respect of input services received in F.Y. 2014-15 but CENVAT Credit is omitted to be availed;
4. Deferred cess of Capital Goods received in factory in F.Y. 2014-15;
5. Cess in respect of Capital Goods received in factory prior to F.Y. 2014-15;
6. Cess in respect of inputs and capital goods received on or after 1st March, 2015; and
7. Cess in respect of input services availed on or after 1st March, 2015.

To remove difficulties, Central Government has issued Notification No. 12/2015-CE (NT) dated 30th April, 2015 to provide provisions for utilization of CENVAT Credit of cess for the purpose of payment of Excise Duty in following cases:

• Cess paid on inputs or capital goods received in factory on or after 1st March, 2015;
• Deferred cess in respect of capital goods received in F.Y. 2014-15;
• Cess on input services received on or after 1st March, 2015

Therefore, though Central Government has allowed to utilize CENVAT Credit of cess in three cases mentioned in Para supra; fate of cess in respect of point no. a, b, c, and e is still full of doubts.

Here, it is pertinent to mention that similar doubts will also arise for Service Providers at the time of applicability of new Service Tax rate. Hope to see similar amendment in CENVAT Credit Rules, 2004 parallel with introduction of new rate of Service Tax to remove scope of difficulty as faced by manufacturers.

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