Bankruptcy board to register 100 more insolvency professionals to add to 940

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The Insolvency and Bankruptcy Board of India (IBBI), which has so far registered 940 insolvency professionals (IPs), is in the process of granting registration to about 100 more such professionals, according to its whole time member Navrang Saini.

The Insolvency and Bankruptcy Board of India (IBBI), which has so far registered 940 insolvency professionals (IPs), is in the process of granting registration to about 100 more such professionals, according to its whole time member Navrang Saini. “It is a continuous process, the applications come to us through insolvency professionals agencies, we examine the applications and carry out due diligence and then we grant registration to them,” said Saini while addressing an Assocham conference on IBC and RERA. The IBBI had received three applications for registration as information utility (IU) out of which two applicants have been granted in-principle approval and it is in the process of examining the third one.

“We are in the process of giving approval to one of the IU, we may give the final registration if they meet all criteria, we have already given in-principal approval to two IUs and out of that I hope one will start functioning by end of this month, the third application is still under examination with the board,” Saini said.

As on September 12, 3,437 cases have been filed out of which 354 cases have already been admitted by the various benches of NCLT. Out of these, 337 have already been rejected. “To deal with such a large number of insolvency related matters, we need institutional infrastructure,” he said.

Rules for registered valuers are to be made by ministry of corporate affairs which is in the process of notifying and issuing the same.

The board has already invited suggestions on the regulations which have already been notified by the board and it will receive the suggestions up to December 31 and come out with the amendments based on the suggestions received and advisory committees constituted for this purpose by March 31, 2018.

Source: Financial Express

Tax authorities to scan GST transition credit claim of 162 companies

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As many as 162 companies that have claimed GST transitional credit of over Rs. 1 crore are under the scanner of tax authorities who would verify whether the claims are eligible.

In the transitional credit form TRAN–1 filed by taxpayers along with their maiden returns for July, businesses have claimed credit of over Rs. 65,000 crore for excise, service tax or VAT paid before the GST was rolled out from July 1.

In view of such huge claims, the Central Board of Excise and Customs (CBEC) in a letter to Chief Commissioners said that as per the GST law carry forward of transitional credit is permitted only when such credit is permissible under the law.

“The possibility of claiming ineligible credit due to mistake or confusion cannot be ruled out … It is desired that the claims of ITC credit of more than Rs. 1 crore may be verified in a time-bound manner,” CBEC said.

It asked the chief commissioners to send a report on the claims made by these 162 companies to the CBEC, which is the apex decision making body for indirect taxes, by September 20.

To ensure that only eligible credit is carried forward in the GST regime, the CBEC has asked field offices to match the credit claimed with closing balance in returns filed under the earlier law. They would also check if the credit is eligible under the GST laws.

Till last week, as many as 70 per cent of 59.57 lakh taxpayers had filed returns for July resulting in a maiden revenue of Rs. 95,000 crore under the Goods and Services Tax (GST) regime.

However, out of this, the input tax credit (ITC) data for Central GST (CGST) claimed in TRAN–1 has shown that registered businesses have claimed over Rs. 65,000 crore as transitional credit.

The government had, in late August, come out with form TRAN–1 for businesses to claim credit for taxes paid on transition stock. Traders and retailers had 90 days time to file for claim. Also businesses have been allowed to revise the form once till October 31.

PwC India Partner and Leader (indirect tax) Pratik Jain said that the Rs. 65,000 crore amount looks high particularly given the fact that lot of large companies have not yet submitted TRAN–1.

Under the transition rules, traders and retailers are allowed to claim credit of 60 per cent of taxes paid earlier against the CGST or SGST dues where the tax rate exceeds 18 per cent. In cases where the GST rate is below 18 per cent, only 40 per cent deemed credit will be available against CGST and SGST dues.

Further, the government would also refund 100 per cent excise duty for goods costing above Rs. 25,000 and bearing a brand name of the manufacturer and are serially numbered like TV, fridge or car chassis.

To avail this, a manufacturer can issue a Credit Transfer Document (CTD) as evidence for excise payment on goods cleared before the introduction of GST to the dealer. The dealer availing credit using CTD would also have to maintain copies of all invoices relating to buying and selling from the manufacturer to the dealer, through intermediate dealers.

Source: The Hindu Business Line

CBEC plans strategy to bring more businesses in GST net

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Tax officials are working out strategies to encourage more businesses to register for the Goods and Services Tax (GST) and further increase the taxpayer base.

At present, there are about 90 lakh businesses registered to file returns and pay taxes under the new levy, which kicked in from July 1.

But, the Central Board of Excise and Customs will now also encourage small businesses and dealers, who may be exempt from registering for GST.

“We plan to increase awareness of even small businesses about the benefits of GST and why they should register,” said a senior official, pointing out that in the long run it will be beneficial to them as suppliers would only choose to buy from those businesses from where they can get input tax credit.

Further, in some cases tax officials may also verify whether businesses that were paying taxes earlier have registered for GST.

Officials believe that as the new tax system stabilises, more businesses will register under GST, taking the tax base to over one crore in the next one year, if not before.

At present, businesses with an annual turnover of up to ₹20 lakh (or ₹10 lakh in some States) are exempt from registering for GST.

Though the number of taxpayers registered with the GSTN is much higher than the original estimate of about 80 lakh, Prime Minister Narendra Modi had, at the recent Rajaswa Gyan Sangam, urged the Centre and State tax officials to further expand the tax base under GST.

“To enable all traders to take maximum benefit of GST, we should work towards ensuring that all traders, including even relatively smaller traders with a turnover below ₹20 lakh, should register with the GST system,” he had said, asking officials to further increase the taxpayer base.

The issue was also then followed up by Prime Minister’s Office. Also Cabinet Secretary PK Sinha and Revenue Secretary Hasmukh Adhia, at a recent video-conferencing meeting with Centre and State tax officials, assessed the roll out of the new levy and measures to increase the tax base.

Source: The Hindu Business line

FPI inflows: India’s forex reserves all set to hit whopping $400 bn mark; here is how long it took and why

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The reserves are hitting the psychological threshold also because benign current account deficits over the last few quarters had allowed RBI to use less of the reserves to finance it.
India’s foreign exchange reserves have climbed tantalizingly close to the $400-billion mark on September 1 on the back of strong foreign portfolio investments into the Indian market, especially the debt segment

The reserves are hitting the psychological threshold also because benign current account deficits over the last few quarters had allowed RBI to use less of the reserves to finance it.

To be sure, the latest $100 billion addition to the reserves has taken close to 10s years. The $300 billion mark was reached in February 2008, while the previous $100 billion was accumulated in a span of just eleven months.

While the rupee remains strong against the dollar at levels of 64 having appreciated 6% so far in 2017, few would have anticipated this strength, especially after the free fall of the currency in mid-2013 when it slipped all the way to 68.85 against the greenback (the forex reserves had plunged by more than $17 billion during this period).

The other critical period for the reserves and currency was in 2008, during the financial crisis when the currency lost almost 25% of its value between May and November. In this period, the reserves fell by a little over $70 billion to $245.8 billion.

Currently, the reserves take care of approximately 12 months of imports; in the past the reserves have typically covered seven to eight months of imports. Interestingly, India has seen the third-highest reserves accretion globally after Switzerland and China, so far in 2017.

According to Indranil Sengupta, chief economist at Bank of India Merrill Lynch, RBI has been intervening fairly aggressively in the forex market and might continue to do so if the dollar weakens but perhaps less so if the greenback was to strengthen.

After a brief overnight pause, the rupee was again caught in a downward spiral and slipped by 12 paise to 64.12 against the US dollar on Thursday on fresh demand for the American currency from banks and importers amid persistent foreign capital outflows. Foreign portfolio investors sold shares worth a net Rs 827 crore on the day.

Meanwhile, India’s CAD, which stood at 0.7% in the fourth quarter of last fiscal is expected to widen sharply to 3% in Q1FY18 due to a sharp deterioration in the merchandise trade deficit. According to Sonal Varma, chief economist at Nomura, the low commodity prices in the last two years have resulted in the CAD narrowing to about 1% of GDP. “With commodity prices marginally higher and a cyclical recovery expected in coming quarters, we expect the current account deficit to widen to a steady state of around 1.5-2.0% of GDP (for FY18),” Varma said.

Currently, as the central bank continues to shore up the reserves, it appears to be depending more on forward purchases than the spot market. This is due to the abundant liquidity in the system which prevents excessive action in the spot market.

MV Srinivasan, vice-president, Mecklai Financial Services believes the RBI is attempting to prevent any appreciation of the rupee beyond 63.80 levels. “The central bank is trying to rein in the excess liquidity in the system through OMO sales and dollar purchases in the spot will counter these measures,” he says.

Srinivasan believes that if the US Federal Reserve begins to reduce its balance sheet size, there could be forex outflows following which the RBI might intervene to stabilise the markets. Net portfolio inflows to the India’s bond and stock markets have been to the tune of $26.7 billion so far in 2017.

Source: Financial Express

Auditors come under lens amid crackdown on shell companies

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A multi-agency clampdown has begun on shell companies to tackle the black money menace wherein the role of auditors has come under the scanner for alleged connivance in facilitating illegal transactions.

The auditors’ role is also being looked into for not raising the red flag as several cases have come to the fore, including at listed companies, for alleged mismatch in financial statements, sharp erosion in net worth, siphoning off funds to group and promoter entities, sources said.

Stepping up the vigil, the corporate affairs ministry as well as Sebi and other regulatory authorities are keeping a close tab on activities carried out by shell companies.

Sources said regulatory agencies are examining the role of auditors to ascertain whether they were also involved in suspected illegal activities.

The ministry as well as Sebi are closely looking at the functioning of auditors in various companies, especially those that have not been carrying out business for long. After a detailed analysis, the authorities would decide on the next course of action, sources added.

Auditors, who have greater responsibilities under the Companies Act, 2013, are required to ensure that financial statements of a company are proper and can red flag dubious transactions.

As part of larger efforts to fight illicit fund flows and tax evasion, the ministry has already struck off the names of over two lakh companies from the records and further action is expected.

Besides, Sebi has taken against 331 listed entities that are suspected shell companies. While the watchdog had imposed strict trading restrictions on these scrips, curbs have been eased in some cases after the companies went on appeal against Sebi’s move.

On Tuesday, the government said more than 1.06 lakh directors would be disqualified for their association with shell companies.

The ministry, which is implementing the companies law, has also identified professionals, chartered accountants, company secretaries and cost accountants associated with the defaulting companies.

Besides, such people “involved in illegal activities have been identified in certain cases and the action by professional institutes such as ICAI, ICSI and ICoAI is also being monitored”, an official release said on Tuesday.

Separately, authorities are looking at the possibility of having stricter scrutiny of global auditing firms to make them more accountable with such auditors coming under the lens in various corporate misdoings.

A big area of concern pertains to the big guns seeking to wash off their hands whenever their names crop up in any accounting wrong-doing while their delaying tactics in the name of jurisdiction have also been noticed, an official had said earlier.

While the existing legal framework provides for stringent provisions for auditing activities, there is no specific system in place when it comes to overseas audit firms.

While discussions on having tighter regulations for foreign audit firms are going on, the ministry is already examining the recommendations of the 3-member expert panel on various issues related to audit firms amid concerns over certain practices circumventing regulations.

 The expert panel, headed by Teri Chairman Ashok Chawla, had submitted its report in March this year.
Source: Times of India

World Bank accepts many of Modi govt’s reform claims, big thumbs-up likely next month

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The government expects a double-digit improvement in India’s rank in the global index on ease of doing business, likely to be announced by the World Bank next month.

A senior official told ET that the World Bank had shared its feedback, stating that it had accepted many of the reforms claimed by the government. Last year, India’s rank had improved by just one spot to 130 among 190 countries.

“The World Bank has acknowledged around 20 reforms among many more mentioned by us in response to their study … The overall ranking will depend on how other countries have performed, but we should come close to the 100 mark,” the official said.

The World Bank had recently finished gathering feedback from users for its Doing Business Report. The cut-off date for implementing reforms for the study was June 1. Reforms implemented thereafter will not be counted for this year’s ranking.

Reforms such as GST have not been taken into account as the impact is yet to be felt by users. But India is expecting these to reflect in next year’s report and significantly boost the country’s position.

India had showed one of its poorest performances on the parameter of ‘Paying Taxes’ last time, ranking 172 among the countries surveyed for the report. That, along with an equally lower position in ‘Enforcing Contracts’, landed India at the 130th spot, falling behind countries such as Mexico (38), Russia (51) and Pakistan (138). The ranking considers business environment in Delhi and Mumbai.

Over the past few months, the government has taken up concerns about not getting due credit for its reform drive with the World Bank. While responding to the survey this year, the government flagged such issues citing examples of reforms undertaken for enforcing contracts, starting business and issuing construction permits, among other things.

The government also cited provisions in the existing legal framework that deal effectively with the issue of enforcing contracts.

ET View: Push legal reforms
The way ahead is to push reforms. India fares poorly, for example, in enforcing contracts. We need judicial reforms to drastically reduce legal delays. So, even if states improve lower courts, disputes could end up in the higher judiciary and the reform lies with the Centre. The Department of Justice should drive the reforms. The need is also to enhance transparency in funding of political parties. It will weed out corruption that will automatically improve ease of doing business.

Read more at: The Economic Times

Filing Dates for GSTRs for July extended by a month to October 10

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Recommendations made by the GST Council in the 21st meeting at Hyderabad on 9th September, 2017

 

Press Information Bureau
Government of India
Ministry of Finance

09-September-2017 20:19 IST

 

The GST Council, in its 21st meeting held at Hyderabad on 9th September 2017, has recommended the following measures to facilitate taxpayers:

  1. a) In view of the difficulties being faced by taxpayers in filing returns, the following revised schedule has been approved:
Sl. No. Details / Return Tax Period Revised due date
1 GSTR-1 July, 2017 10-Oct-17
For registered persons with aggregate turnover of more than Rs. 100 crores, the due date shall be 3rd October 2017
2 GSTR-2 July, 2017 31-Oct-17
3 GSTR-3 July, 2017 10-Nov-17
4 GSTR-4 July-September, 2017 18-Oct-17 (no change)
Table-4 under GSTR-4 not to be filled for the quarter July-September 2017. Requirement of filing GSTR-4A for this quarter is dispensed with.
5 GSTR-6 July, 2017 13-Oct-17
Due dates for filing of the above mentioned returns for subsequent periods shall be notified at a later date.

b) GSTR-3B will continue to be filed for the months of August to December, 2017.

c) A registered person (whether migrated or new registrant), who could not opt for composition scheme, shall be given the option to avail composition till 30th September 2017 and such registered person shall be permitted to avail the benefit of composition scheme with effect from 1st October, 2017.

d) Presently, any person making inter-state taxable supplies is not eligible for threshold exemption of Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) and is liable for registration. It has been decided to allow an exemption from registration to persons making inter-State taxable supplies of handicraft goods upto aggregate turnover of Rs. 20 lacs as long as the person has a Permanent Account Number (PAN) and the goods move under the cover of an e-way bill, irrespective of the value of the consignment.

e) Presently, a job worker making inter-State taxable supply of job work service is not eligible for threshold exemption of Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) and is liable for registration.  It has been decided to exempt those job workers from obtaining registration who are making inter-State taxable supply of job work service to a registered person as long as the goods move under the cover of an e-way bill, irrespective of the value of the consignment. This exemption will not be available to job work in relation to jewellery, goldsmiths’ and silversmiths’ wares as covered under Chapter 71 which do not require e-way bill.

f) FORM GST TRAN-1 can be revised once.

g) The due date for submission of FORM GST TRAN-1 has been extended by one month i.e. 31st October, 2017.

h) The registration for persons liable to deduct tax at source (TDS) and collect tax at source (TCS) will commence from 18th September 2017. However, the date from which TDS and TCS will be deducted or collected will be notified by the Council later.

The GST Council has decided to set up a committee consisting of officers from both the Centre and the States under the chairmanship of the Revenue Secretary to examine the issues related to exports.

The GST Council has also decided to constitute a Group of Ministers to monitor and resolve the IT challenges faced during GST implementation.

 

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