corporate and professional updates 12th may 2018

CORPORATE AND PROFESSIONAL UPDATES 12TH MAY 2018

Direct Tax:

• Bombay HC holds that expenditure incurred during AY 1986-87 for obtaining technical knowhow under a license is classifiable u/s. 35AB (which allows deduction for 1/6th of amount) and not u/s. 37 ; Rejects assessee’s contention that the word ‘acquiring’ occurring in Sec. 35AB necessarily mean acquisition of ownership rights in technical knowhow, holds that “obtaining of technical knowhow under a license would also amount to acquiring knowhow as the words ‘on ownership basis’ is completely absent in Sec. 35AB(1).[TS-233-HC-2018(BOM)]

• Mumbai ITAT deletes Sec. 68 addition on account of share premium received  by assessee-company  during AY 2012-13 from its Hong Kong based holding companies; Relies on Bombay HC ruling in case of Vodafone India Services Private Limited wherein it was held that issue of shares at premium is a capital account transaction and does not give rise to income chargeable to tax, observes that this position is accepted by CBDT in its instruction No. 2 /2015. [TS-232-ITAT-2018(MUM)]

Indirect Tax:

• West Bengal AAR holds that maintenance of railway tracks is taxable as ‘works contract’ u/s 2(119) of CGST Act at 18% GST under Sr. No. 3(ii) of Notification No. 11/2017-CT (Rate); Notes that work to be executed involves repair, maintenance and fitting of immovable property viz. railway tracks and also transfer of property in goods in course thereof and therefore, is a “composite supply” of labour and goods in the nature of works contract, classifiable under Heading 9954. [TS-171-AAR-2018-NT]

FAQ on E-WAY BILLS:

• Query: Can Part-B entry be assigned to another transporter by authorized transporter?
• Answer: Part-B can be entered by the transporter assigned in the EWB or generator himself. But the assigned transporter cannot re-assign to some other transporter to update Part-B on the EWB system.
• Query: How to enter invoice having different states for “Bill to” and “Ship to” places and what will be the tax rates?  
• Answe:In ‘Bill to Ship to’ model three persons involved in a transaction namely,
  • ”A‟ is the person who has ordered “B‟ to send goods directly to “C‟. 
  • “B‟ is the person who is sending goods directly to “C‟ on behalf of “A‟.
  • “C‟ is the recipient of goods.  

In this complete scenario two supplies are involved and accordingly two tax invoices are required to be issued i.e. one invoice by “B” to “A” and second invoice by “A” to “C”. In case of ‘Bill to Ship to’ only one e-way bill required to be generated, either by the “A” or by the “B”. This is required to complete the cycle of transactions and taxes will change for inter-state transactions.

MCA Updates

MCA has notified amendment to various rules under Companies Act, 2013. The amendments are effective from May 07, 2018. The amended provisions have been discussed as under:

• MCA has amended the Companies (Meetings of the Board and its Powers) Rules, 2014. A new provision has been inserted to Rule 4 of the said rules providing that any other director may participate through video conferencing or other audio visual means if there is quorum in a meeting through physical presence of directors.
• MCA has amended the Companies (Audit and Auditors) Rules,2014. Amendment has been made to rule 3 whereby proviso to sub-rule 7 of Rule 3 and explanation there under have been omitted. Which means that the requirement of ratification of appointment of Auditor in every annual general meeting (AGM) till the conclusion of sixth AGM has been removed. Further Rule 9 of the said rules has been omitted. Rule 10A and Rule 14 have also been amended.
• MCA has amended the Companies (Registration Office and Fees) Rules, 2014. A new provision has been inserted under to Rule 10(3) providing that – Registrar shall allow fifteen days’ time for re-submission in case of reservation of name through web service -RUN for rectification of defects if any. Earlier re-submission was not allowed in case of re-submission of application through RUN.
• MCA made An amendment  in Annexure I of the Companies (Registration Office and Fees) Rules, 2014 prescribing additional fee of Rs. 100 per day effective from July 1, 2018 for delayed in filing of annual return and financial statements. The additional fee shall also be applicable to revised financial statement or board report as well as Secretarial audit report.
• MCA has amended the Companies (Appointment and Qualification of Directors) Rules, 2014 whereby amendment has been made to Rule. The revised norm provides that in case of appointment of Independent Director, none of the relatives of such independent director should be indebted to the company, its holding subsidiary or associate Company or their promoters, or directors; or has given a guarantee or provided any security in connection with indebtness of any third person to its holding, subsidiary or associate company or their promoter or directors for an amount of Rs. 50 Lakhs at any time during the two immediately preceding financial years or during current financial year.
• MCA has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014. The amendment prescribes omission of rule 4 – Reports to be set out in the Prospectus, rule 5- Other matters and reports to be stated in the prospectus and rule 6- Period for which information to be provided in certain cases.

Companies (Prospectus and Allotment of Securities) Rules, 2014: obtain ISIN and to file ROC Form PAS-6

As per Rule 9B of Companies (Prospectus and Allotment of Securities) Rules, 2014 every non-small PRIVATE LIMITED COMPANY has to obtain ISIN and to file ROC Form PAS-6 and get Demat Registration done with NSDL/CDSL. Advantages with RJA ^®-RTA:

• LOWER PROCESSING FEES
• LEAST Annual Charges for First Financial Year
• Obtain ISIN of your company in less than 2 working days
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• Professional Management comprising of CAs, CS, Lawyers etc.
• Referral incentive for practicing professionals from NSDL/ CDSL
• Extensive support for Debenture/ Preference ISIN
• Fastest execution of Corporate Actions like Right issue, Private Placement etc.
• NUMBER 1 RTA IN UNLISTED SPACE FOR 4 CONSECUTIVE YEARS

For further queries, kindly contact by email or call us at the below mentioned numbers.

Key dates:

• Return of TDS/TCS collected in March: 31.05.2018
• Due date for filling of GSTR-6- 31 . may . 2018
• Due date for filling GST TRAN-2- 30.06.2018
• Read our articles:
  • E-Invoice Mechanism under the GST
  • Blocking/Unblocking the E-Way Bill creation system if fails to file GSTR-3B: GSTN
  • Reasons for the Movement of Goods under the GST