Corporate and Professional updates on 21st January 2019

Direct Tax:

• The Income Tax Department Has Come across Several Cases Where Tax Payers Have Taken Credit for Payment of “Self-Assessment tax” without actually clearing the dues, resulting in arrears of around Rs 5,000 crore.
• I-T dept is chasing those tax payers to recover Rs 5,000 Cr.

Indirect Updates:

• The leader and deputy chief minister Sushil Kumar Modi has been deeply involved in the reform of indirect taxes. He had previously led the empowered committee of state finance ministers, the predecessor to Goods and Services Tax (GST) Council, when India tried to build consensus among states to pool their sovereignty in taxation so that Asia’s third largest economy could have uniform indirect tax across the country.
• The GST Council turns towards Modi, who has all the related information and knows What the Decision of state finance ministers across the political spectrum, to resolve contentious tax issues.
• The Council is making several changes towards GST to give relief to sections of taxpayers.
• No E-Ways Bills if GST Returns not filed for 6 months. Non filers of GST Returns for six consecutive months will soon be barred from generating e-way bills for movement of goods. The GST Network is developing an information technology system that would debar businesses, which have not filed returns for two cycles.

SEBI Updates:

• SEBI issues Show-Cause Notice to Raymond alleging Multiple Securities Market Violations. The allegations include failure to obtain necessary approvals for related party transactions in the JK House episode, Corporate Governance Violation for Non-Disclosure of material information about litigations and Non-Compliance of Shareholder Reclassification Norms.
• SEBI rejects Larsen & Toubro’s Rs 9,000 Crore Buyback Offer, citing Compliance Issues over its Post-Buyback Debt-Equity Ratio.

FAQ’s on GST:

QUES. Whether GST will be levied on the exit-load on mutual funds?

ANS. Exit load in the form of a fee (whether or not as a fixed percentage of the investment) is liable to GST. Even if the exit load is in the form of units in the fund, it may be concluded that the consideration received in money was later converted to NAV units.

QUES. Can the stock broker continue to issue bills and contracts under the normal Stock Exchange mechanism and issue a monthly tax invoice for the purpose of Goods and Services Tax?

ANS. The stock broker can issue bills and contracts under the normal Stock Exchange mechanism mentioning the GST amount but will have to issue a tax invoice as envisaged under Section 31(2) of the CGST Act, 2017 read with Rule 47 of the CGST Rules, 2017.

Key Due Dates:

• Payment of TDS of purchase of property for the Month of December is 30^th January 2019.
• Challan-cum-statement of tax Deducted under Section 194IB for the month of December 2018 is 30^th January 2019.
• Challan-cum-statement of tax Deducted under Section 194IA for the month of December 2018 is 30^th January 2019.

Other Updates:

• Commencement Certificate is mandatory now to be obtaining within 6 months of Incorporation without which, it cannot comment its business activity or borrow money.
• The ROC can strike off a company if the address of Regd Office is bogus or incomplete improper address.
• Conversion of public Ltd to Pvt Ltd matters shifted from NCLT to Regional Directorate.
• Company cannot issue shares at discount, – heavy penalty imposed on violation.
• Alteration of Authorised Capital to be intimated within 30 days, default – penalty 1000 every day or 5 Lac whichever is less.
• Creation of charge filing with ROC- time limit reduced from 300 days to 60 days.
• Wrong statement/ information in filing Charge forms with ROC may lead to misrepresentation and jail.
• Annual Return should be filed within 60 days from AGM failure to this penalty of 100 per day to Company + directors max 5 Lakh apart from ROC delay charges is applicable.
• Penalty of 5 lakh to Company secretary certifying wrong Annual Return.
• Explanatory statement to be given with Notice of General Meeting must contain all details as required by Law, if no detail/short detail/misleading – penalty for Company, Director and KMP.
• Filing of Resolutions with ROC- delay will be very costly now. Penalty for defaulter increased substantially.
• Filing of Balance sheet with ROC within time limit- failure is costly for Company and Director Both. Penalty of 100 per day 1 lakh to Company Director each.
• A director cannot become director in more than 20 companies. If so then He will be disqualified.
• Appointment of CS on payroll (Pvt Co having paid-up capital 5 cr. & above) is mandatory. Default is now very costly- penalty increased substantially.
• ROC may strike off a company if subscribers have not paid initial share capital after incorporation of a Company within 6 months.
• NCLAT tells NCLT that it should not hear any third party, other than the applicant who has taken a company to the NCLT and the company which is the corporate debtor itself, at the time of the admission of a case.