Corporate and Professional Updates on 30th August 2019

Direct Tax Updates:

• CBDT issues Clarification in respect of filling-up of the ITR wrt Directors, Foreign assets and NRIs.

Indirect Tax Updates:

• CBIC extends the officer interface facility to resolve GST invoice mismatches for shipping bills filed up to July 31, 2019.

RBI Updates:

• The slowdown in the Indian economy could be cyclical, with deep structural problems requiring urgent reforms, according to the Annual Report of the Reserve Bank of India (RBI), released on Thursday. The macroeconomic environment remains. “Unsettled and financial markets are experiencing considerable flux” as the financial year 2019-20 progresses. While consumption drives the demand in India, “phases of sustained high growth in the economy are usually triggered by investment upturns and vice versa”.
• Reviving consumption demand and private investment has assumed the highest priority in 2019-20. This may involve strengthening the banking and non-banking sectors, a big push for spending on infrastructure and implementation of much needed structural reforms in the areas of labour laws, taxation, and other legal reforms, which will also enhance ease of doing business in pursuit of fulfilling the vision of India becoming a $ 5 trillion economy by 2024-25

MCA Updates:

• The MCA has notified the Companies (Amendment) Act, 2019 and the provisions of which, shall be deemed to have come into force on the 2nd day of November, 2018, except sections 6, 7 and 8, clauses (i), (iii) and clause (iv) of section 14, sections 20 and 21, section 31, sections 33, 34 and 35, sections 37 and 38 which shall come into force on such date as the Central Government may notify. The Amendment Act containing 44 clauses is being brought in to “ensure more accountability and better enforcement to strengthen the corporate governance norms and compliance management in the corporate sector. The Act will tighten Corporate Social Responsibility (CSR) compliance, re-categorisation of specific offences as civil offences and transfer certain responsibilities to National Company Law Tribunal. The ACT has replaced the Ordinance promulgated in February 2019, will keep a check of ‘shell companies’ and will promote ‘ease of doing business.

The key features of the amendment are

• Allowing subsidiaries of foreign companies to follow different financial year for accounting;
• Measures to control ‘shell companies’;
• Sixteen sections of the Act are amended so as to modify the punishment as provided in the said sections from fine to monetary penalties to lessen the burden upon the Special Courts.
• Amendments are made to Section 135 to carry forward the unspent corporate social responsibility amount, to a special account to be spent within three financial years and transfer thereafter to the Fund specified in Schedule VII, such as PM’s National Relief Fund.
• The Act provides for the punishment for debarment from appointment as an auditor or internal auditor of a company, or performing a company’s valuation, for a period between six months to 10 years in case of proven misconduct.
• The pecuniary limits of Regional Director (“RD”) to compound offences under section 441 of the Act is proposed to be increased. The threshold is increased to a fine up to Rs. 25 lakhs.
• A new clause has been inserted under the Section 164 to state that violation of Section 165(1) shall be a ground for disqualification of a director if he/ she breaches the limits of maximum directorship allowed thereunder.
• The amendment to Section 241 empowers the Central Government to move a matter before the NCLT against managerial personnel on several grounds.
• Shifting of powers for conversion from public to private companies from National Company Law Tribunal (NCLT) to the central government, as well as more clarity with respect to certain powers of the National Financial Reporting Authority (NFRA).
• The Act provides more power to the Registrar of Companies (ROC) to take strict action against those companies which are not working as per the law. Registrar can remove the name of the company from the Register of companies if it is not carrying on the operations.
• Amendment Act seeks to insert sub-section 1A to Section 29, which inter-alia mandates certain unlisted companies that the securities shall, in addition to being issued, also be held and transferred only in dematerialized form after complying with the provisions of the Depositories Act, 1996 and regulations made thereunder. With this proposed move, all shareholders of all private companies shall have to get their holdings dematerialized.
• In case of corporate frauds revealed by an investigation by SFIO, the Central Government may make an application to NCLT for passing appropriate orders for disgorgement of profits or assets of an officer or person or entity which has obtained an undue benefit.
• Charges can only be registered within a period of 120 days from the date of creation and modification and ad-valorem fees shall also be charged over and above the additional fees in case of delayed filings beyond 60 days.
• Rectification by Central Government in Register of charges in case of omission and or misstatement of any particulars, in any filing previously made to the Registrar with respect to any charge or modification thereof or with respect to any memorandum of satisfaction or other entry made in pursuance of section 82 or section 83.
• If any company fails to file its annual return under sub-section (4), before the expiry of the period specified therein, such company and its every officer who is in default shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.
• If any company fails to furnish the Director Identification Number under sub-section (1), such company shall be liable to a penalty of twenty-five thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues.
• Section 203, non compliance provisions amended to provide that if any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.”
• Penalty provided under section 447 of the principal Act, is increased from “twenty lakh rupees”, to “fifty lakh rupees”.
• Insertion of new section 454A to provide Penalty for repeated defaults by a company or an officer of a company or any other person having already been subjected to a penalty for default under any provisions of this Act.
• The Companies (Amendment) Second Ordinance, 2019 is repealed on notification of the Act.

MCA Charge filing fees new structure wef 1 August 2019

• Within 30 days – Normal Fees
• Delay Up to 30 days  – 6 times normal fees
• Delay More than 30 days and up to 90 days – 6 times normal fees plus ad valorem fees 0.05% of amt secured by charge subject to maximum of Rs.5 lacs.
• Note: 120 days and above charge will not be taken on record by MCA
• For example considering loan / charge amt of Rs.1 Cr following is ROC fees calculation:
• Within 30 days – Maximum Fees Rs.600/-
• Delay Up to 30 days – Total Rs.4200/- (Rs.600/- + Rs.3600/-)
• Delay More than 30 days and up to 90 days – Rs.9200/- {Rs.4200/- + Rs.5000/- (i.e. 0.05% of Rs.1 Cr)} On Rs.100 Cr charge amount – Delay More than 30 days and upto 90 days-  Roc fees Rs.4200/- + advalorem fees Rs.5 Lac=Rs.504200/-

Other Updates:

• NBFC funding to commercial sector plunges 20%: RBI
• Govt.  to announce two big steps to boost industry
• Bank fraud touches Rs 71,543 crore in 2018-19: RBI
• Stimulus package “too little, too late”: Fitch
• Wipro expands its partnership with Google Cloud
• Client securities: Sebi extends deadline by a month to implement new provisions
• Banks contain gross NPAs at 9.1% in FY19: RBI
• Currency in circulation increases 17% in FY19 to Rs 21.1 trillion: RBI
• Coal India gets jittery over 100% FDI, commercial mining in sector
• ONGC plans to borrow $2 billion through overseas debt programme
• Foreign players to get nod for offshore G-secs: RBI annual report
• Tiger Global, WestBridge Capital lead $42 million funding round in Vedantu
• ADB willing to lend over $12 billion to India over the next three years
• Ambani: India will be leader in adopting technologies of 4th industrial revolution
• Essel to sell solar power assets to Adani Green Energy for ₹1,300 cr
• Despite mild inflation, crops expected to get better prices
• JM Financial’s PE arm invests ₹45 cr in Mumbai-based Innovcare Lifesciences
• Mutual funds continue to cut exposure to debt of NBFCs
• MG Motor ties up with Delta Electronics for setting up charging stations
• RBI’s FY19 profit rises over three-fold at Rs1.76 trillion
• Adani Green to pick up 205MW of solar assets from Essel for ₹1300 crore
• Reliance Jio market share may jump to 45%: India Ratings
• RBI to soon issue new salary norms for private, foreign bank heads
• Tata Projects executes 41.42-km transmission line in Thailand
• RBI plays down deepening slowdown as just ‘cyclical downswing’
• Microfinance industry grew by 42.9 per cent in Q1 of FY20
• Sensex tanks 383 points on F&O expiry; Nifty ends below 11,000
• Gold crosses record Rs 40,000-mark as recession fears seep in Auto sales to decline sharply across segments this fiscal
• Retail FDI norms to increase exports

• US delays tariffs on some Chinese goods, drops others
• Govt working on package to check economic slowdown
• Govt notifies partial credit guarantee scheme for PSBs
• Retail inflation remains benign at 3.15% in July
• MCA panel moots CSR expenditure as tax-deductible
• HPCL finally recognises ONGC as its promoter
• RBI to review rules governing housing finance cos
• Govt issues guidelines for Rs 1 trillion partial guarantee scheme for NBFCs
• Consumption-driven growth behind ‘serious slowdown’, warns SBI MF
• Slide in iron ore prices to hurt exports from India, further slump seen
• GAIL in two minds over govt’s plan to split gas pipeline business
• Coal India net profit rises 22.28% to Rs 4,629.87 cr in June quarter
• Apollo Hospitals profit jumps 69 per cent to Rs 57 cr in Q1
• Cement makers’ body, SCCL hold talks on increasing coal offtake
• WTO likely to set up panel to decide on India’s sugar sops
• RCap in talks to sell 11 per cent stake in mutual fund unit
• NMDC Q1 profit up 21% at₹1,179 crore
• IOCL to invest Rs 2 lakh-cr in next 5-7 years
• Invesco Oppenheimer reiterates commitment to Zee stake deal
• BSE to launch liquidity enhancement plan in equity derivative segment
• ONGC Q1 net profit dips 3.9% on lower oil price, production
• Tata Capital Fin expects 20% growth despite stress in NBFCs
• EPFO looking for early redemption of DHFL bonds worth ₹700 crore
• ADB signs pact to invest $23 million in NCD of GRIL
• India, Russia to boost ties to achieve $30 billion bilateral trade by 2025
• Banks report fall in NPA levels; seek steps to address stress in NBFCs: Survey
• Singapore slashes 2019 economic growth forecast stoking recession fears
• Rupee hits 6-mth low of 71.40 against USD; dives 62 paise on global turmoil
• Amazon in advanced talks to buy 8-10 per cent stake in Future Retail
• Sensex plummets 624 points on global sell-offs; RIL soars 10 pc
• Govt-constituted panel suggests making CSR non-compliance civil offence

Key Due Dates:

• STATUTORY COMPLIANCE CALENDARS FOR AUGUST 2019: 07 Augus: TDS/TCS LIABILITY DEPOSIT – Due date of depositing TDS/TCS liabilities for previous month.
• 7 August: EQUALIZATION LEVY DEPOSIT- Equalization Levy is a direct tax, which is withheld at the time of payment by the service recipient where the annual payment made to one service provider (Non  Residents only) exceeds Rs. 1,00,000 in one financial year for the specified and notified services.
• 10 August: GSTR-7 RETURN FILLING DUE DATE – Due Date for filing GSTR-7 by person liable to deduct TDS under GST for previous   quarter.
• 10 August: GSTR-8 RETURN FILLING DUE DATE – GSTR-8 is a return to be filed by e-commerce operators who are required to deduct TCS (Tax collected at source) under GST.
• 11 August: GSTR-1 RETURN FILLING DUE DATE – GST Filing of returns by registered person with aggregate turnover more than 1.50 crores.
• 13 August:  GSTR-6 RETURN FILLING DUE DATE- Due Date for filing return by Input Service Distributors for previous month.
• 15 August:  PROVIDEND FUND / ESI DUE DATES- Due date for payment of Provident fund and ESI contribution for the previous month.
• 20 August: GSTR-5 RETURN FILLING DUE DATE- Due date of GSTR-5 (for Non-resident Taxable person) for the Previous month.
• 20 August: GSTR-5A RETURN FILLING DUE DATE- Return by person providing online information and database access or retrieval services by a person located outside India made to Non-Taxable persons in India for the previous month.
• 20 August: GSTR-3B RETURN FILLING DUE DATE – Due date for filling GSTR – 3B return for Previous month.
• 31 August: INCOME TAX RETURN EXTENDED- Filing income tax for individual and non-corporates [who are not subject to tax audit].
• 31 August: GSTR-9 RETURN FILLING DUE DATE – Annual Return to be filed by Regular Taxpayers filing GSTR 1, GSTR 2, and GSTR 3. It needs to be filed electronically on the GST portal directly or through a facilitation center.
• 31 August: GSTR-9A RETURN FILLING DUE DATE – Taxable Persons paying tax under Section 10 of CGST Act, the composition scheme, are required to submit their annual returns in Form GSTR 9A.
• 31 August: GSTR-9B RETURN FILLING DUE DATE- Annual Return to be filed by e-commerce operators who have filed GSTR 8 during the financial year.
• 31 August: GSTR-9C RETURN FILLING DUE DATE- Taxpayers whose annual turnover exceeds INR 2 crores in a Financial Year are required to get their accounts audited by a practicing Chartered Accountant or Cost Accountant before filing returns in Form GSTR 9C.

• 31 August: INCOME TAX RETURN EXTENDED- Filing income tax for individual and non-corporates [who are not subject to tax audit].