Companies and LLPs confirm their readiness towards COVID-19: MCA

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Advisory on Preventive measures to contain the spread of COVID19
Advisory on Preventive measures to contain the spread of COVID19

The Ministry of Corporate Affairs ( MCA ) is in the process of developing and deploying a simple web form named CAR (Company Affirmation of Readiness towards COVID-19) for companies/LLPs to confirm their readiness to deal with the COVID-19 threat.

Since the wake of the Novel Coronavirus(COVID-19) affecting over 110 countries including India, the WHO had declared it a Pandemic. Apart from human suffering, it is also causing major economic disruptions. In order to contain the spreading of the virus, the corporate sector is required to play a key role in implementing the strategic policy decision of social distancing, which is most crucial in reducing the rate and extent of disease transmission at the community level.

Taking cognizance of the gravity of the public health situation, the Government in the Ministry of Corporate Affairs has relaxed the rules with respect of Board and dispensed with the necessity of holding physical meetings on matters relating to approval of financial statements, board report, restructuring etc., up to 30th June, 2020. They are also examining any other relaxation under the Companies Act, 2013 that may be necessitated on account of COVID-19.

As part of disaster management to meet this urgent and severe health exigency, all companies/LLPs are strongly advised to put in place an immediate plan to implement the “Work from Home” in the Headquarters and field offices to the maximum extent possible, including by conduct of meeting through video conference or other electronic/telephonic/computerized means. They further instructed that even with the essential staff on duty, staggered timings may be followed so as to minimize physical interaction. Apart from that, the preventive measures including the Do’s and Don’t’s advised by the public health authorities are to be strictly followed.

The Webform named CAR will be deployed on 23rd March 2020. All companies/LLPs are requested to using compliance with the web form named CAR on the 23rd of March instant while following all possible preventive measures to contain the disease and its contagious effect.

Frequently Asked Questions on (CAR) – 2020

1. To whom is this form applicable?

To All Companies / LLP including small companies, private companies, One Person Company (OPC) .All Companies/LLP include the companies, whether incorporated in India or not, but having operations in India.

2. When will the form be deployed?

The form is expected to be deployed on 23rd March, 2020 and is required to be submitted by 30th March, 2020 (extended by a week).

3. Is there any fees for filing the form?

No.

4. Who can file the form on behalf of Companies / LLP?

CS, CFO, Managing Director, Director, Designated Partners or Authorized person who has been authorised for such purposes.

5. Whose Mobile number has to be entered in the form?

In case of Director / Designated Partner signing the form their mobile number will be automatically prefilled from database. In all other case, the Mobile Number shall be editable should be that of the person who is authenticating the form as it has to be verified by a One Time Password (OTP).

6. What if my organization does not have a whole time / permanent employee?

The form still has to be filed, but the Company / LLP will be eased of future compliance burden, if any.

7. Till when does such policy needs to be in place?

The policy needs to be in place till 31st March, 2020 as per present scenario but may be extended based on the review made by appropriate Govt. Authorities.

8. What if I do not adhere to filing of such web form?

There has not been any information on the same but going by the intent of the form, non – filing of it may not lead to any penal outcome.

9. On what basis can I prepare “Work from Home” policy?

This shall be prepared based on the guidelines and advisory issued by the Government from time to time to check the spread of COVID – 19.

10. How to track the filing of form?

Once the form is filed, a system based acknowledgement will be sent to:

  • Email id of the Company / LLP
  • Email Id of the person affirming the form
  • Email id of FO user submitting the affirmation.

RBI digs into Yes Bank’s past, questions auditor

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RBI is also likely to question the auditor on whether the SBI proposal would have any ‘material impact’ on the existing accounts of Yes Bank

The Reserve Bank of India will check if troubled lender Yes Bank’s auditor had raised any alarm in the past year. The apex bank has been in touch with the auditor and will look into whether they had specifically issued any warning in the past 12 months.

According to a report in The Economic Times, RBI has been in touch with auditor BSR & Co and wants to know if it had raised any red flag relating to the health of Yes Bank or any other issue. The auditor is part of KPMG India. The central bank is also likely to question the auditor on whether the SBI proposal would have any ‘material impact’ on the existing accounts of Yes Bank.

On Friday, the RBI announced a reconstruction scheme for the bank. It said that SBI that has expressed interest to invest in the troubled bank would do so to the extent of holding 49 per cent shareholding. The apex bank said that SBI’s investment in Yes Bank would not impact the employees and their current terms of employment.

BSR and Co was appointed as Yes Bank’s auditor after RBI banned SR Batliboi & Co for a year. The RBI had stated that the firm that was part of EY was banned due to “lapses identified in a statutory audit assignment carried out by the firm”.

RBI put restrictions on Yes Bank on March 6, allowing its customers to withdraw only Rs 50,000 for a month. The apex bank relaxed the guidelines subsequently. On Tuesday, the bank permitted its credit card customers to pay their credit card dues and loan obligations from other bank accounts. It allowed NEFT payments to clear loan EMIs and make credit card payments. The bank had, before that, allowed customers to withdraw money from ATMs of other banks.

Source: Business Today

30 important Key features of GST New Return System:

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First 15 features (1-15 points) as PART-I:-

  1. Supplier can upload the Tax Invoices on real time basis in Anx-1.
  1. Recipient can view his purchase Invoices on near real time basis.
  1. Recipient can also view whether supplier has filed his return or not.
  1. Supplier has to upload the Tax Invoices latest by 10th of Next Month.
  1. However, recipient can claim ITC on missing invoices also subject to certain conditions.
  1. In case, Invoice uploaded by the supplier in Anx-1, but RET-1 is not filed, uploading of invoices in Anx-1 will be treated as self-admitted liability and recovery proceedings will be initiated against the supplier, except in certain specified situations where recipient will be liable to pay.
  1. Recipient has to pay the amount of ITC availed on missing invoices after specified period. (Missing invoices means, invoices not uploaded in Anx-1)
  1. To find out missing invoices, Offline IT Tool will be provided for matching invoices in Anx-2 with invoices in the accounting system of recipient.
  1. Payment of tax shall be discharged full at the time of filing of RET-1 or SAHAJ or SUGAM itself.
  1. In case of Quarterly returns, tax shall be paid on monthly basis.
  1. Recipient can do the following actions on the invoices appearing in Anx-2 (auto drafted Purchase Invoice):

Accept  also called as locking

Reject (eg. Invoice not related to the recipient)

Pending

  1. If no action is taken on a particular invoice, it will be deemed by the system as accepted and ITC will be available against these invoices.
  1. Once invoice is accepted by the recipient, i.e., locked by the recipient, supplier cannot amend those invoices.
  1. Locked Invoice should be unlocked by the recipient only, for making any amendment by the supplier.
  1. Supplier will be able to issue Debit Note or Credit Note on locked invoices also. If credit/debit note is issued against any pending invoice, then system will club the credit/debit note with pending invoice.

Second set of 15 features (16-30 points) as PART-II:-

  1. Missing invoices shall be reported in RET-1 of the current month.
  1. System will calculate the interest automatically. Once the tax and interest is paid, the missing invoice will be clubbed with the monthly return to which it relates.
  1. For amendments, separate Return Form is available.
  1. Maximum 2 amendments return can be filed for any one month.
  1. “NIL” Return can be filed by “SMS”.
  1. Negative liability if any shall be carried forward to next month regular return.
  1. Higher late fee for amendment return if change in liability is more than 10%
  1. Shipping Bill details also should be entered in Anx-1 by the exporters.
  1. If the shipping bill details are not available by the time of filing the return, the same can be entered later on also.
  1. The export data then will be transmitted to ICEGATE portal for cross verification purposes.
  1. Until the facility is ready to pull the data from ICEGATE portal, importers can avail ITC on imports and supplies from SEZ on self-declaration basis.
  1. New concept of suspension of registration will be introduced. From the date of suspension till the date of cancellation, tax payer need not file returns and invoice uploading also will not be allowed.
  1. HSN should be reported at 4 digit level in monthly return.
  1. The tables in the return will be opened based on the profile of the tax payer.
  1. For all return obligations offline utility tools are made available to make filing process as easy as possible.

Budget 2020 highlights: New income tax slabs, DDT gone..

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In the union budget 2020, the following section 115BAC shall be inserted in the Income Tax Act, with effect from the 1st day of April, 2021, with  new income tax slabs and lower rates. These income tax rates are optional and are available to those who are willing to forego some exemptions and some deductions.

Direct Taxes
1. Tax rate reduced for new companies to 22% and for manufacturing companies 15%
2. New simplified personal tax regime for Individual tax payers. The revised slab can be availed if they do not claim deductions and certain exemptions.
For income :
Upto 5,00,000 nil
Rs 5,00,000 -7,50,000: 10%
Rs 7,50,000 – 10,00,000 : 15%
Rs10,00,000 – Rs 12,50,000 20%
Rs 12,50,000- Rs 15,00,000 : 25%
More than Rs 15,00,000 : 30%
3. Companies not required to deduct dividend distribution tax and will be taxed only in the hands of the recipient. Parent company to be allowed deduction of dividend received subsidiary
4. Concessional tax rate of 15% extended to power generation companies
5. Investment made in Infrastructure and other specified sectors
6. Tax rate of 194LC at 5% for interest payment to non resident in respect of money borrowed or bond issued upto June 30,2023 and for 194LD at 5% for interest on borrowing from foreign institutional or qualified investor and municipal bonds
7. Interest payment on bonds listed on exchange by ILFS – 4%
8. Option to Cooperative societies to pay tax at 22% with no exemption or deduction. Exempt from alternative minimum tax
9. Affordable housing tax breaks extended by one year. Additional 1.5 lakhs tax benefit on interest paid on affordable housing loans to March 2021
10. Turnover threshold for tax audit raised to Rs 5 crore from Rs 1 crore
11. 100% tax concession to sovereign wealth funds on investment in infra projects
12. Income from Charitable institutions fully exempt from taxation. Donation to such institution allowed as deduction.
13. Registration of charity institutions to be made completely electronic, donations made to be pre-filled in IT return form to claim exemptions for donations easily.
14. Faceless appeals against tax orders on lines of faceless assessments
15. For tax payers who have appeals pending only disputed tax is to be paid by tax payer and no interest or penalty if the same is paid within March 31,2020. Post March 31,2020 certain amount levied uptill June 30,2020
16. Startup ESOP taxes deferred by 5 years
Other Areas
1. New scheme to provide subordinate debt to MSME
2. Decriminalise some norm violations in Companies Act
3. Increase the bank deposit insurance from Rs 1 lakh to Rs 5 lakh
4. New system for instant allotment of PAN
5. A new scheme NIRVIK to be launched this year itself for exporters
6. A debt ETF consisting of government securities will be launched.
7. For NBFCs and HFCs, liqduity constraints will be addressed.
8. FPI Limit in corporate bonds will be raised to 15% from 9%.
9. LIC to be listed at stock exchanges

Two important changes in Income tax (TDS/TCS)
— TCS to be collected by seller whose turnover exceeds Rs. 10 cr. In previous year from each buyer on amount exceeding 50 lacs @0.1% for sale of goods.

-TDS rate u/s 194J for technical payment changed from 10% to 2% to avoid litigations in respect of 194J Vs 194C

CBIC extends GSTR-9 and GSTR-9C filing dates in a staggered manner

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On a day when the Economic Survey acknowledged the fact that both GST system is complex, taxpayers found it impossible to file their returns.

The Central Board of Indirect Taxes and Customs (CBIC) late on Friday night extended the due date for furnishing GST Annual Return and Reconciliation Statement (GSTR-9 / 9A and GSTR-9C) for FY 2017-18 in a staggered manner. The last date to file the Returns was January 31, 2020.

This came after thousands of taxpayers took to social media complaining about the GST portal not working. “Considering the difficulties being faced by taxpayers in filing GSTR-9 and GSTR-9C for FY 2017-18 it has been decided to extend the due dates in a staggered manner for different groups of States to 3rd, 5th and 7th February 2020 as under,” CBIC said in a Tweet.

Accordingly under Group 1, the states of Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Puducherry, Telangana, Andhra Pradesh, Other Territory has been placed and they will need to file their returns by 3rd February 2020.

Group 2 includes Jammu and Kashmir, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan and Gujarat that have to file by 5th February 2020.

Lastly group 3 includes the states of Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Andaman & Nicobar Islands, Jharkhand, Odisha, Chhattisgarh, Dadra and Nagar Haveli and Daman and Diu, Lakshadweep, Madhya Pradesh, and Uttar Pradesh, which now have to file by 7th February 2020.

On a day when the Economic Survey acknowledged the fact that both GST system is complex, taxpayers found it impossible to file their returns. By evening of January 31, #gstnfailed was the top trend on Twitter. At 10 30 pm CBIC tweeted the extension dates, but early reports suggest the portal is still not working.

Source: Economic Times

MCA notifies (Winding Up) Rules, 2020: Shutting business now easier for small firms

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– The Central government will provide required approvals to such companies for winding up instead of the tribunal – MCA notifies the Companies (Winding Up) Rules, 2020, vide Notification dt. 24 January 2020, comprising of Rules 1 to 191 and Forms WIN 1 to WIN 95, applicable for winding up under the Companies Act 2013 w.e.f. 1 April, 2020

The Ministry of Corporate Affairs (MCA) on Tuesday notified rules for winding up of companies, making it easier for smaller firms to wind up businesses without taking approval.

The rules have provided summary procedures for liquidation of companies with asset size of Rs 1 crore and which have not accepted deposits exceeding Rs 25 lakh and turnover less than Rs 50 crore and total loan under Rs 25 lakh.

The Central government will provide required approvals to such companies for winding up instead of the tribunal.

The rules said, “…wherever the word Tribunal is mentioned, it shall be read as Central Government and with further directions issued by the Central Government as may be necessary, from time to time.”

MCA Notification dt. 24 January 2020 – Companies (Winding Up) Rules, 2020:

G.S.R. (E).- In exercise of the powers conferred by sub-sections (1) and (2) of section 468 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, namely:-

Part 1: GENERAL

1. Short title, commencement and application.-

(1) These rules may be called the Companies (Winding Up) Rules, 2020.

(2) They shall come into force on the 1st day of April, 2020.

(3) These rules shall apply to winding up under of Companies Act 2013 (18 of 2013).

2. Definitions.-

In these rules, unless the context or subject matter otherwise requires, –

(a) “Act” means the Companies Act, 2013 (18 of 2013);

(b) “Form” means a Form annexed to these rules;

(c) “Registrar” means the Registrar of the National Company Law Tribunal or National Company Law Appellate Tribunal and includes such other officer of the Tribunal or Bench thereof to whom the powers and functions of the Registrar are assigned;

(d) “Registry” means the Registry of the Tribunal or any of its Benches or of the Appellate Tribunal, as the case may be, which keeps records of the applications and documents relating thereto;

(e) “Section” means section of the Act;

(f) words and expressions used and not defined in these rules but defined in the Act shall have the meanings respectively assigned to them in the Act.

Part II: WINDING UP BY TRIBUNAL

3. Petition for winding up.-

(1) For the purposes of sub-section (1) of section 272, a petition for winding up of a company shall be presented in Form WIN 1 or Form WIN 2, as the case may be, with such variations as the circumstances may require, and shall be presented in triplicate.

(2) Every petition shall be verified by an affidavit made by the petitioner or by the petitioners, where there are more than one petitioners, and in case the petition is presented by a body corporate, by the Director, Secretary or any other authorised person thereof, and such affidavit shall be in Form WIN 3.

4. Statement of affairs.- The statement of affairs, as required to be filed under sub-section (4) of section 272 or sub-section (1) of section 274, shall be in Form WIN 4 and shall contain information up to the date which shall not be more than thirty days prior to the date of filling the petition or filling the objection as applicable and the statement of affairs shall be made in duplicate, duly verified by an affidavit, and affidavit of concurrence of the statement of affairs shall be in Form WIN 5.

5. Admission of petition and directions as to advertisement.- Upon filing of the petition, it shall be posted before the Tribunal for admission of the petition and fixing a date for the hearing thereof and for appropriate directions as to the advertisements to be published and the persons, if any, upon whom copies of the petition are to be served, and where the petition has been filed by a person other than the company, the Tribunal may, if it thinks fit, direct notice to be given to the company and give an opportunity of being heard, before giving directions as to the advertisement of the petition, if any, and the petitioner shall bear all costs of the advertisement.

6. Copy of petition to be furnished.- Every contributory of the company shall be entitled to be furnished by the petitioner or by his authorised representative with a copy of the petition within twenty four hours of his requiring the same on payment of five rupees per page.

7. Advertisement of petition.- Subject to any directions of the Tribunal, notice of the petition shall be advertised not less than fourteen days before the date fixed for hearing in any daily newspaper in English and vernacular language widely circulated in the State or Union territory in which the registered office of the company is situated, and the advertisement shall be in Form WIN 6.

8. Application for leave to withdraw petition.-

(1) A petition for winding up shall not be withdrawn after presentation without the leave of the Tribunal subject to compliance with any order of the Tribunal, including as to costs.

(2) An application for leave to withdraw a petition for winding up which has been advertised in accordance with the provisions of rule 7 shall not be heard at any time before the date fixed in the advertisement for the hearing of the petition.

Read the Notification: Companies (Winding Up) Rules, 2020