Corporate and Professional Updates on 24th April 2019

Indirect Tax Updates:

• Manner of utilization of input tax credit under GST law is in highlights since past few months, before GST. Act, 2018(w.e.f. 1st Feb, 2019) the entire provisions pertaining to manner of utilization were contained in Section 49(5) of CGST Act, 2017.
• In the said GST (Amendment) Act, 2018 a new Section 49A was introduced and certain proviso were inserted under Section 49(5). All these amendments were followed by insertion of rule 88A from 29/03/2019.
• • The revenue department has allowed businesses whose GST registration has been cancelled due to non-filing of tax returns to apply for its revocation by July 22, provided they file their pending returns and pay due taxes. In a letter to field offices, the Central Board of Indirect Taxes and Customs said it is providing a “one-time opportunity” to apply for revocation of cancellation of GST registration by July 22, 2019, for those entities for whom cancellation order has been passed up to March 31, 2019.
  • The CBIC said where the registration has been cancelled with effect from the date of the order, all returns due till the date of such cancellation are required to be furnished before the revocation application is filed. In cases where the registration has been cancelled with retrospective effect, the CBIC has allowed filing of revocation application, subject to the condition that all returns relating to the period from the effective date of cancellation till the date of revocation order will be filed within a period of 30 days from the date of the revocation order.
  • The CBIC officers have recently cancelled a large number of registrations on account of non-compliance, including non-filing of returns. Earlier this month, the CBIC had asked its field officers to be cautious while processing application for fresh GST registration by those businesses whose earlier registration has been cancelled due to non-compliance, as it sought to crack down on tax evaders.
  • The CBIC missive came after taxmen noticed that businesses whose registration has been cancelled continue to operate without any registration and are not applying for revocation and are instead applying for fresh registration, so as to evade taxes which were due under earlier registration.
  • About 1.2 crore businesses are registered under Goods and Services Tax, which was rolled out on July 1, 2017. AMRG & Associates Partner Rajat Mohan said: “Numerous MSME sector taxpayers are expected to take benefit of this opportunity who unknowingly stepped on the wrong side of tax laws and were served with punitive cancellation orders”.
  • CBIC has now clarified that the IGST credit can be used in payment of CGST or SGST in any order or proportion. Businesses that have accumulated Integrated GST (IGST) credit in their books can settle it against central and state tax dues in any proportion, the revenue department has said

RBI Updates:

• • Reserve Bank of India (RBI) is working on revising the framework for resolution of stressed assets, including providing additional 60 days to borrowers to repay dues, as part of efforts to mitigate hardships faced by genuine businesses. Against the backdrop of the Supreme Court quashing an RBI circular, issued on February 12, 2018, a revised set of rules is under works and would be released soon.
  • RBI committee may recommend that all government payments to citizens should be made digitally, one person aware of the matter said, requesting anonymity. The move seeks to ensure higher adoption of digital payments among the masses.
  • The Reserve Bank of India has given the go-ahead for electronic mandates through both debit cards as well as net banking in lieu of the earlier Aadhaar based  authentication, paving the way for banks and fintech companies to auto-debit recurring payments such as for home loans and mutual funds. The National Payments Corporation of India (NPCI) received the final approval from the banking regulator earlier this month and the retail payments body has  asked banks to implement both the emandate measures by June 30.
  • About 28% of the complaints filed by consumers with the Reserve Bank of India are in the space of digital transactions and card payments, according to data released by the central bank on Wednesday. As per the RBI’s annual report on the Banking Ombudsman Scheme for 2017-18, 22% of the complaints pertained to banks not adhering to the ‘fair practice  code’, while ATM and debit card-related issues made up the second largest category at more than 15%. Together with credit card-related complaints (at 7.7%) and online banking issues (at 5.2%), the total share of complaints on digital channels almost touched 30% of the total complaints filed.
  • Almost 8,500 complaints were filed on issues around internet and mobile banking. The number was more than 24,000 for issues around debit cards and ATMs and 12,000 regarding issues around credit cards. In comparison to 2017-18, ATM and debit card-related complaints were less in 2016-17 at about 12%, while problems concerning credit cards were at 6.4%. A comparative figure for internet and mobile banking-related complaints is not available for 2016-17 as the category was added only last fiscal. Explaining the nature of complaints regarding ATMs and debit cards, the RBI said that more than 60% of the issues regarding cash dispensing machines were raised around non-dispensation of cash in spite of the account being debited. With regard to credit cards, the bulk of the complaints emanated from wrong billing and the rest came from delayed reporting and other issues
  • The Reserve Bank of India’s (RBI’s) second three-year dollar-rupee swap auction was a massive success like the first one, even as it took just five large bids to cover the entire dollor 5 billion on offer. Market participants bid more than three times the offer, but the five successful bids were closer to the market rates and managed to shoot up the forward premium in the secondary market. “The aggressive bids most likely came in from a large corporate looking to hedge long-term dollar liabilities, such as external commercial borrowings.
  • RBI’s second 3-year dollar-rupee swap auction too a grand success Since the other participants could not offload their dollar holdings, the central bank offered to buy up to Rs 25,000 crore of bonds from the secondary market in May to help with liquidity. The banking system was running a liquidity deficit of Rs 1.4 trillion as of Monday. Currency dealers say the excess dollar holding would likely cause pain for some banks in the coming days. A similar thing happened after the March auction, when the cash-spot rate shot up to a record high due to excess availability of dollars in the system. Otherwise, the bidding pattern, and subsequent rise in the forward premium indicated that the central bank could be nearing the end in using this liquidity tool.
  • The cut-off premium was significantly higher than the last auction. The forward premium rate spiked following the auction as banks are now expecting that the option to swap cheap may not be available next month. The forward premium for one year crossed 4.55 per cent after the auction, which is the level where the premium stays in normal time. The one-year forward rate had closed at 4.24 per cent on Monday. The rupee fell to 69.86 a dollar but closed at 69.63 on Tuesday.
  • “This indicates that the swaps are nearing the end. The market won’t let the RBI to push rates down further for long,” said Jamal Mecklai, managing director at Mecklai Financial Services. Banks offered $18.65 billion for an auction size of up to dollor 5 billion. The central bank received 255 bids, higher than March’s 240 bids. The cut-off premium was 838 paise. In the first auction on March 26, the cut-off was 776 paise. The three-year forward premium was 775 paise in the morning before the auction. It rose to close at 860 paise after the auction

INC 22A:

• Companies have been given more time to furnish photographs and location details of their registered offices to the corporate affairs ministry, with the deadline being extended to June 15. In February, the ministry notified a new electronic form ACTIVE-1 (Active Company Tagging Identities and Verification). It was part of larger efforts to curb shell companies, suspected to be used as conduits for illicit fund flows. The deadline for submitting the form with requisite details was April 25. It is applicable for companies incorporated on or before December 31, 2017.
• The ministry has now extended the deadline till June 15. In case of non-submission of the form within the deadline, companies concerned would have to pay a late fee of Rs 10,000, according to a notification issued on Thursday. Among other details, a company has to provide the photograph of its registered office with at least one director or key managerial personnel who is signing  the form. It is also the first time that the ministry is asking for photograph as well as longitude and latitude details of registered offices of the companies.

Read Also : LLP Compliance 

SEBI Updates:

• Market regulator Securities and Exchange Board of India is once again caught on the wrong foot, and this time for one of its recent circulars that made public names of over 2,000 entities, which have defaulted on its dues. Some of the companies named in the list have raised objections with the finance ministry, stating that the list was erroneous. The regulator had pulled out the circular dated 2 April within hours without any explanation.
• The list featured some prominent names like SBI Capital, Axis Capital, GMR Holdings, United Breweries, Alpic Finance, Saradha Realty, United Bank of India and Trident India. “Putting our name on the defaulter list has sent a wrong message to our shareholders

Other Updates:

• SoftBank eyeing a pie in Mukesh Ambani’s most valuable asset.
• RBI okays HDFC proposal for stake in Bandhan Bank.
• US to ensure steady oil supply for India.
• Cos may get more time to meet new disclosure rules.
• HC rules taxman can seek interest on GST liability.
• Essar can’t discriminate between creditors.
• RBI’s second 3-year dollar-rupee swap auction to a grand success.
• ITC takes Hotel Leela to NCLT over ‘oppression’ in JM ARC, Brookfield deals.
• RBI to buy Rs 25,000 crore of bonds in two instalments via OMO in May.
• Saudi, Iraq and UAE may fill in Iran gap as US ends sanctions waiver
• Tata Global Beverages to acquire Dhunseri’s packet tea biz for Rs 101 cr.
• Micro finance sector to grow up to 22% in FY20.
• Pharma exports increase 11% to $19.2 billion
• Jindal Steel completes first-ever rail order ahead of schedule
• Nagarjuna Oil case: NCLT dismisses Haldia Petrochem plea to appoint new valuer.
• Sterlite Tech Q4 net profit up 47% to Rs 165.17 cr.
• Zee launches theatre channel Spotlight on Airtel Digital TV.
• Reliance prepares the ground for e-commerce launch.
• Essel Group in talks to sell road assets to CDPQ, Cube Highways.
• extends ban on import of milk products from China.
• Trai directs Bharti Telemedia to comply with provisions of new regulations.
• Lupin’s Pithampur facility may face regulatory action, says USFDA.
• Cola Cola sees growth in India among other APAC markets in Q1.
• Future Retail gets CCI nod to raise Rs 2,000 crore via equity warrants.
• Jaypee Infratech homebuyers offered Rs 97-crore compensation.
• ICICI Securities announces dividend of Rs 5.70 per share.
• Government likely to raise wheat import duty to 40%.
• Global warming shrank Indian economy by 31 per cent.
• P&G guilty of profiteering Rs 250 crore from GST rate cut.
• Solar capacity addition of 7-7.5 GW likely this fiscal.
• Jet Airways will do everything to revive airline, says CEO.
• Industry delegation calls on RBI Guv, discusses steps for MSMEs, NBFCs.
• GAIL emerges as highest bidder for IL&FS wind power plants.

• • RBI to attract more foreign capital for nation-building.
  • India’s crude oil production drops 4 per cent in FY19.
  • Jet Airways stake sale process may hit SOEC hurdle.
  • Tata Steel reports Q4 profit of Rs 2,431 crore.
  • NBCC sweetens bid for Jaypee Infra, offers land parcels.
  • Bank credit grows by 14.19%, deposits 10.60%: RBI data.
  • Tata Steel board approves merger of Bamnipal Steel & Tata Steel BSL.
  • RBI deputy governor B P Kanungo bats for capital account liberalization.
  • Maruti signals tough road, gives weakest growth forecast in the past 5 yrs.
  • Major lapses in Deloitte audit of IL&FS Financial Services, says SFIO.
  • Insolvency process: NCLT asks bank officials to appear in Sterling SEZ.
  • Ruchi Soya case: Lenders to meet on Friday to consider Patanjali’s offer.
  • US official insists on zero oil imports from Iran.
  • ‘High fuel prices may have led to a slowdown in auto sales’.
  • India sets a record foodgrains target of 291 million tonnes.
  • Wendt India’s PAT up 10% in FY19.
  • Hind Copper approves raising up to Rs 1,400 cr through QIP.
  • Glenmark gets nod to market nasal spray as OTC product in Russia.
  • Microsoft edges toward $1 trillion valuation on results beat.
  • SEBI move opens up REITs and InVITs to retail investors.
  • Axis Bank has fixed its big bad loans but small loan risks are rising.
  • Nirav Modi to appear for remand hearing via videolink from jail on Friday.
  • UAE’s largest sewage treatment plant built by L&T inaugurated.
  • PE/VC investments in March at all-time high of $7 billion.
  • Quikr buys Sequoia-backed online marketplace Zefo.
  • IFC looks to provide $43.3 million debt financing to Hero Future Energies for solar farm business.
  • Shriram City Union Finance net profit grows tenfold.
  • Scheme for Non-PPA units: States show interest in 1,400 MW of power.
  • RBI mulls giving 60 days additional time for repayments.
  • Vodafone Idea’s Rs 25,000 crore rights issue sails through.
  • Higher tariff in auction for mid-term PPA auction positive for power producers.
  • Vedanta gets green nod for Rs 12,000 crore project.
  • Rupee dives to 6-week low as crude spikes above USD 75 per barrel.
  • RBI to attract more foreign capital for nation-building.
  • India’s crude oil production drops 4 per cent in FY19.
  • Jet Airways stake sale process may hit SOEC hurdle.
  • Tata Steel reports Q4 profit of Rs 2,431 crore.
  • NBCC sweetens bid for Jaypee Infra, offers land parcels.
  • Bank credit grows by 14.19%, deposits 10.60%: RBI data.
  • Tata Steel board approves merger of Bamnipal Steel & Tata Steel BSL.
  • RBI deputy governor B P Kanungo bats for capital account liberalization.
  • Maruti signals tough road, gives weakest growth forecast in the past 5 yrs.
  • Major lapses in Deloitte audit of IL&FS Financial Services, says SFIO.
  • Insolvency process: NCLT asks bank officials to appear in Sterling SEZ.
  • Ruchi Soya case: Lenders to meet on Friday to consider Patanjali’s offer.
  • US official insists on zero oil imports from Iran.
  • ‘High fuel prices may have led to a slowdown in auto sales’.
  • India sets a record foodgrains target of 291 million tonnes.
  • Office space worth $35 bn can be listed under REIT: JLL India
  • RBI too joins global peers in raising gold bullion reserves
  • Non-filers of GST returns to be barred from generating e way bills from June 21
  • Rupee falls by 24 paise on strong dollar demand
  • Sensex rallies 490 points; Nifty reclaims 11,700-mark
  • Self-assessed GST return permitted.

  Key Due Dates:

  • 20-04-2019 – GSTR-3B for the m/o March 2019.
  • 30-04-2019 – GSTR-1 for the quarter ending March 2019 for taxpayers with Annual Aggregate turnover upto than 1.50 Crore.
  • 30-04-2019 – Deposit of TDS/TCS for m/o March 2019.
  • 30-04-2019 – Furnishing challan-cum-statement in respect of tax deducted u/s 194-IA/194IB in month of March’19
  • 30-04-2019 – Due date for uploading declarations received from recipients in Form. 15G/15H during the quarter ending March, 2019.