Corporate and Professional Updates on 29th March 2019

Direct Tax:

• Mumbai ITAT holds that Executive Search Services fees (‘ESF’) received by assessee (a Dutch company) not taxable as FTS under Article 12 of India-Netherlands DTAA for AY 2011-12; Rejects Revenue’s stand that ESF, which was received pursuant to Service Agreement (SA) with Indian group entity (SSIPL), was to be treated as ancillary and subsidiary to license fee (taxed as royalty) received from SSIPL under another agreement viz. License Agreement (LA) which was towards use of trade name, trademark, logo and the rights to use software;[TS-288-ITAT-2018(Mum)]
• Delhi ITAT Special Bench (majority view) rules in favour of Nokia Networks OY (assessee, a Finnish company), holds Nokia India Pvt. Ltd. (NIPL, Indian subsidiary) does not constitute assessee’s PE in India for AYs 1997-98 and 1998-99; [TS-289-ITAT-2018(DEL)]
• Penalty paid to Stock Exchange is a regular Business Expenditure: ITAT allows Deduction
• CBDT dedicates Fortnight for Disposal of Pending Appeals.
• Central Govt has decided to make PAN mandatory for remitting money abroad as the RBI has decided to stringent norms for Liberalized Remittance Scheme (LRS) as per which, anyone who is utilizing the scheme will now have to share PAN details – something that was not applicable earlier with regards to CA transactions up to $25,000.
• Kolkata ITAT allows Sec. 10AA benefit to assessee in respect of international trading, warehousing and consultancy income for AY 2009-10; ITAT acknowledges that trading activity is not expressly covered u/s 10AA, but observes that as per the Special Economic Zone Act, 2005 (SEZ Act) and its Rules, 2006, definition of ‘service’ included trading activity; [TS-292-ITAT-2018(Kol)]
• Mumbai ITAT confirms CIT(A)’s Rs. 50cr relief to industrialist Anil Ambani, allows Sec. 37(1) deduction for ‘consent’ fees /”settlement charges” paid by Mr. Ambani w.r.t charges of alleged violation of SEBI Act/Regulations; AO disallowed the said amount, reasoning that the payment was for ‘violation’ of provisions of SEBI Act and hence made for an ‘offence’ and therefore liable to be disallowed by invoking Explanation to Sec. 37(1); [TS-291-ITAT-2018(Mum)]

INDIRECT TAX

• LAST DATE FOR SUBMITTING GSTR 1 FOR registered persons filing monthly returns for the month of May 2018 is 10th June 2018.
• GST Notification and Circulars issued dated 28-03-2019. Notification No. 15/2019-Central Tax : Extend the due date for furnishing of FORM GST ITC-04 for the period July 2017 to March 2019 till 30th June 2019.
• Finance ministry has asked the direct tax code (DTC) panel to revise the existing income-tax slabs, especially in the 20 per cent bracket. The panel has sought three months to incorporate the suggestions.
• “The current tax rates are ambiguous in nature, especially the lower slabs. As suggested we will work towards harmonising the tax rates, currently prone to interpretation. We will seek more expert voices and weigh the circumstances to incorporate the changes in line with the suggestions we have received,” said the official cited above. Under the current I-T slabs, income up to Rs 2.5 lakh is exempt from tax, those earning up to Rs 5 lakh pay 5 per cent, and those earning up to Rs 10 lakh have to pay 20 per cent tax. Those with income above Rs 10 lakh have to pay 30 per cent tax.

FAQ on E-WAY BILLS:

Query: If the vehicle, in which goods are being transported, having e-way bill is changed, then what is required to be done?

• Answer: The e-way bill for transportation of goods should always have the vehicle number that is actually carrying the goods. There may be requirement to change the vehicle number after generating the e-way bill or after commencement of movement of goods, due to trans-shipment or due to breakdown of vehicle. In such cases, the transporter or generator of the e-way bill can update the new vehicle number in Part B of the EWB.

Query: How the transporter is identified or assigned the e-way bill by the taxpayer for transportation?

• Answer: While generating e-way bill the taxpayer has a provision to enter the transporter id in the transportation details section. If he enters 15 digits transporter id provided by his transporter, the e-way bill will be assigned to that transporter. Subsequently, the transporter can log in and update further transportation details in Part B of eway bill.

MCA UPDATES     

• MCA has sought details from some auditor companies, which resigned their assignment after the companies concerned had reportedly refused to give them adequate information. Officials said explanations had been sought from auditors in 15-odd cases.
• The President of India gave assent to promulgate the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 which will give relief to Home Buyers and SMSE.

RBI UPDATES

• RBI extended loan repayments deadline to 180 days from the due date without being classified as a non-performing asset. This latest announcement comes after the regulator’s April diktat which had allowed GST registered MSME borrowers with a turnover of up to Rs. 25 crore to delay loan repayments by 180 days.
• The RBI voted unanimously to hike repo rate by 25 basis points, in a first interest rate hike in a four-and-a-half year, citing a major upside risk to the baseline inflation on the back of high crude oil price. The central bank said that there was a 12% increase in the price of Indian crude basket, which was “sharper, earlier than expected and seems to be durable”

SEBI UPDATES

• The Securities and Exchange Board of India plans to tighten takeover norms applicable to companies undergoing proceedings under the Insolvency and Bankruptcy Code. Sources said the capital markets regulator would do away with the provision that allowed a ‘competent authority’ to exempt an acquirer from the requirement of an open offer. Only a court or a tribunal would be allowed to provide such exemptions, they added.

• SEBI extended the date for submission of Aadhaar details by those investing in capital markets till a final judgment by the Supreme Court on proposed mandatory linking of 12-digit unique ID for all financial dealings.

OTHER

• last date for online claim of Unstructured CPE hours extended to 30th June – ICAI(Last date for submitting Self Declaration form for claiming CPE Hours under Unstructured Learning Activities for the Calendar Year 2017 – has been extended from 31st May, 2018 to 30th June, 2018)
• Online Facility for members to update Email ID, Mobile & Address – ICAI has launched an Online Form for Members by which they can update their Mobile number and e-mail ids which are currently available in ICAI records

Other Updates:

• Core Sector Growth slows down to 1.8% in January.
• Airtel gets Board Approval to raise Rs 32,000 Crore.
• India to see Lower Productivity, Weak Demand.
• Govt keen on Amalgamation of PSBs.
• NCLAT orders resolution on Essar Steel bid by March 8.
• SEBI wants govt rethink on RBI representation on its Board.
• NSE to introduce Brent Crude Oil Futures Contract on Mar 1.
• DBS to convert its India Operations into wholly-owned subsidiary from Mar 1.
• 2018 best year for M&As as deal values rise 126% to $80 Bn.
• International Finance Corp to invest $165 Mn in Bajaj Finance, Dodla Dairy.
• Infosys says KiranMazumdar-Shaw sold 1,600 Shares without pre-clearance.
• NareshGoyal agrees to step down as Chairman of Jet Airways.
• Iran buys Indian sugar to ease its oil-money headache.
• LG India aims for 30% Growth in commercial ACs this year.
• NIIF, CDC &Eversource Capital to invest $330 mn in Ayana.
• Lupin launches chronic angina treatment drug in the US.
• Future Group to bring 7-Eleven Stores to India.
• Cabinet clears 10,000 Crore FAME II scheme.
• RBI constitutes task force under UshaThorat on offshore rupee markets.
• REC Board approves borrowing limit hike, 11 Per Share Interim Dividend.
• J&J allowed resuming Baby Talc Production.
• Fraud-hit PNB ranks highest in implementation of ‘Reforms Agenda’ in 2018.
• SBICap Ventures’ Neev Fund to invest $5 Million in Renewable Energy Firm Prespl.
• NCLT rejects plea from 8 Operational Creditors.
• Govt revises down FDI inflows into Chemicals drastically.
• Sodexo to increase focus on Small and Medium enterprises in India.
• Rupee recoups 52 Paise to end at 70.72 per Dollar.
• Kotak ties up with ADIA for USD 600 Mn Distressed Assets Fund.
• Increasing Exports can lead to Better Jobs, Higher Wages in India.
• L&T Finance to raise up to Rs 1,500 Cr via NCDs.

• RBI eases office opening process for foreign entities
• Banks’ consumer durable loan business shrinks 75%
• Merger of Vijaya, Dena banks with BOB to continue: SC
• Lenders ask for fresh round of bidding for Amtek Auto
• L&T’s construction division bags Rs 2,500 cr orders
• ZF signs agreement to acquire WABCO for $7-bn
• PFC completes REC acquisition, hopeful of merger soon
• Irdai keeps third party motor insurance rates unchanged
• Bank union to write to govt, RBI against infusing money into Jet Airways
• Donald Trump presses OPEC to boost output to bring down oil prices
• S&P downgrades Tata Motors, subsidiary JLR credit rating for weak profits
• Govt to infuse Rs 5,042 cr into BoB ahead of merger with Dena, Vijaya
• Infosys to buy 75% stake in ABN AMRO’s mortgage services arm for $143.5 mn.
• India keen to re-start talks on trade package with the US
• Lupin launches generic skin treatment cream in US market
• Siemens Gamesa commissions 10 MW solar project for Lakshmi Machine Works
• Indonesia, India palm groups to propose tax incentives to certified palm
• PE, VC investment in India at $20.5 bn in 2018: Report
• Jet defaults on ECB due to ‘temporary constraints’
• Need to reinvent Niti Aayog, says former RBI Guv Y V Reddy
• M&M to raise vehicle prices due to high commodity rates
• Alstom bags ₹700 cr contracts from Mumbai, Pune metros
• PFC is now the second largest govt-owned financial firm after SBI
• DLF’s over ₹3,000 crore QIP closed; issue price fixed at ₹183.4 a share
• IOB receives shareholders nod for ₹3,806 crore capital infusion
• Bigbasket valuation hits $2.2 billion; turns unicorn with $150 million funding from Alibaba, others
• Manappuram Finance withdraws release on securing funding from NABARD
• Bandhan Bank, Gruh finance merger by Dec; to push affordable housing
• Axis Trustee, IndusInd invoke 15.6% pledged shareholding in RCom
• Orchid Pharma’s promoter firm too goes under resolution process
• Sensex rebounds over 400 points, Nifty ends at 11,570
• Commerce ministry for imposition of countervailing duty on Chinese pneumatic tyres
• Rupee plunges 42 paise to 69.30/USD on stronger dollar
• Singapore recalls BP drugs with India-made ingredient
• Adani becomes 1st Indian port operator to record 200 MT cargo movement
• NCLT approves revised resolution plan for Jyoti Structures
• India produces 8.74 MT crude steel in February: worldsteel
• CBDT raises alarm as direct tax collection falls short
• Tata, GIC to buy stake in GMR Airports for Rs 8,000 cr
• NTPC raises $450 million from global markets
• L&T Hydrocarbonbags large order from Oman
• DLF QIP issue subscribed two times; to raise Rs 3,200 crore
• Dr Reddy’s China focus will require deft manoeuvring
• Govt may ease norms for EVs to qualify for FAME incentives
• Essar Steel CoC meets over payout of Arcelor Mittal’s ₹42,000 crore offer.
• Gold prices fall for second day, silver bucks trend.
• HC refuses to stay proceeding in defamation case against Ratan Tata, others.

Key Due Dates:

• Due Dates for monthly taxpayers GSTR-1 is 10th March 2019.
• 15th March 2019- Due date for forth and last installment/ entire amount of advance tax for Assessee having presumptive basis income,
• 20th March 2019 – GST monthly return for the month of February 2019 (GSTR-3B)
• 15th March 2019- Due date for PF and ESIC payment.
• 25th March 2019- Due date for filing monthly return of PF
• 30th March 2019- Challan cum statement for TDS u/s 194 IA for immovable property and 194 IB for rent payment for February 2019.

• Due date March 31, 2019 is the last day for filing of the belated income tax return (ITR) for the Financial Year 2017-2018.
• The Due date March 31, 2019 is the last day of tax planning for the Financial Year 2018-2019.
• Due date March 31, 2019 is the last day for filing of revised income tax return (ITR) for the Financial Year 2016-2017.
• The Due date March 31, 2019 is the last day for linking of Aadhaar number with the PAN.
• ITC in respect of the invoices issued during 2017-18   may be availed till the due date of GSTR 3B for the month of March 2019.
• The Due Date of GSTR-3B for the month of March 2019 is 20^th April 2019.

Professional Quotes:

Being your own person and standing for what you believe is a critical aspect of a good professional life.