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.

MCA amends threshold limits for Related Party Transactions.

by | posted in: Accounting Standards, Audit, Due Diligence, Company Incorporations, e-filing of MCA Returns, Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs | 0
On November 18, 2019 the Companies (Meetings of Board and its Powers) Second Amendment Rules, 2019 (“Amendment Rules“) amended certain threshold limits prescribed by the Rules.

The central government notified the Companies (Meetings of Board and its Powers) Second Amendment Rules, 2019 on 18 November 2019. The amendment rules amend sub-clause 3 of rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014. The amendment rules alter the various transaction thresholds within which the board may authorize a related party transaction without referring the matter to the shareholders pursuant to section 188(1) (Related party transactions) of the Companies Act, 2013.

Rule 15 provides for conditions applicable to the board taking up, discussing and approving a related party contract or arrangement. The first proviso to section 188(1) of the act provides that no contract or arrangement which exceeds certain monetary thresholds, in relation to the company’s paid-up share capital or otherwise, may be entered into without the prior approval of the shareholders by a resolution. The thresholds in relation to this proviso to section 188(1) of the act are prescribed by the rules and have been amended through the amendment rules as follows:

  • For a contract or arrangement in relation to a sale, purchase or supply of any goods, previously the threshold, was the lower of: (1) 10% or more of the turnover of the company; or (2)₹1 billion. The amendment rules have relaxed the threshold and fixed it at 10% or more of turnover of the company.
  • Similarly, for a contract or arrangement for selling or otherwise disposing of, or buying property of any kind, previously the threshold for requiring a shareholder resolution was the lower of: (1) 10% or more of the turnover of the company; or (2)₹1 billion. The amendment rules have relaxed the threshold and fixed it at 10% or more of turnover of the company.
  • The amendment rules has similarly amended the threshold for a contract or arrangement in relation to leasing of property any kind, and in relation to availing or rendering of any services (directly, or through the appointment of an agent). The amendment rules now fix the threshold at 10% or more of turnover of the company.

Accordingly, the ministry has relaxed the thresholds and made it simpler for companies to ensure ease of business, and the ease of entering into related party transactions.

 Nature of Related Party Transactions Earlier Threshold Limit* Amended Threshold Limit*
Sale, purchase or supply
of any goods or material (directly or through an agent).		 Amounting to ten percent (10%) or more of turnover or Rs. 100 Crore, whichever is lower. Amounting to ten percent (10%) or more of the turnover of the company.
Selling or otherwise
disposing of, or buying, property of any kind (directly or through an agent).		 Amounting to ten percent (10%) or more of net worth or Rs. 100 Crore, whichever is lower. Amounting to ten percent (10%) or more of the turnover of the company.
Leasing of property of
any kind.		 Amounting to ten percent (10%) or more of net worth or 10 percent (10%) or more of turnover Rs. 100 Crore, whichever is lower. Amounting to ten percent (10%) or more of the turnover of the company.
Availing or rendering of any services (directly or through an agent) Amounting to ten percent(10%)or more of turnover or Rs. 50 Crore, whichever is lower Amounting to ten percent (10%) or more of the turnover of the company
*limits specified above shall apply for transaction or transactions to be entered into either individually or taken together with the previous transactions during a financial year.
Appointment to any
office or place of profit in the company, subsidiary company or associate company		 Remuneration exceeding
Rs. 2,50,000 per month		 No Change
Underwriting the
subscription of any securities or derivatives of the company		 Remuneration exceeding
one percent (1%) of net worth		 No Change

MCA brings more clarity on guidelines for reserving the name of the Company

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The MCA has amended the Companies (Incorporation) Rules, 2014. In the revised Rule 8 for reservation of name of a company, the Ministry has elaborated the provision by inserting various illustrations. The Rule has been divided in to 2 parts – Rule 8A and Rule 8B. Rule 8A deals with the undesirable names and Rule 8B limits use of words such as Board, commission, National, Republic etc. only after obtaining previous approval of Government.

MCA has created a dedicated unit Central Registration Centre (CRC) to expedite the incorporation related activities including Name approval. Yet the stakeholders were facing difficulty in getting the name approved due to lack clarity in the Rules for selection of desired name. This amendment may bring relief to the stakeholders while choosing the name of a company. Revised Rules with detailed illustration will serve as ready-made guidance for both practicing professionals and CRC thereby further easing the incorporation process.

The MCA has amended the Companies (Incorporation) Rules, 2014. In the revised Rule 8 for reservation of name of a company, the Ministry has elaborated the provision by inserting various illustrations. The Rule has been divided in to 2 parts – Rule 8A and Rule 8B.

Rule 8A deals with the undesirable names and Rule 8B limits use of words such as Board, commission, National, Republic etc. only after obtaining previous approval of Central Government.

While considering the application related to name approval the following illustrations must be considered otherwise the names shall be considered as undesirable and will not be approved. Some of the illustrations have been discussed hereunder:

1. Name should not be identical to singular or plural form of existing company:

User of plural or singular form of the words will be considered as undesirable and such name wouldn’t be approved by authority on receipt of application for reservation of name of company. This can be better understood with the help of illustration as provided by MCA:

– For e.g. Green Technology Limited shall be considered same as Greens Technology Limited and Greens Technologies Limited.

2. Change in Tense would be considered as Similar Name:

The department will reject the application for reservation of name of the company if someone use different tense in name of the company such as:

– Ascend Solution ltd. is same as Ascended Solutions Ltd and Ascending Solutions Ltd.

3. Different use of phonetic spellings is treated as identical name:

Chemtech Ltd is same as Chemtec Ltd, Chemtek Ltd, Cemtek ltd, Kemtech Ltd and Kemteck Ltd.

4. Change in order of words of name and use of article before proposed name:

The application for reservation of name will not be considered if an applicant just changes the order of words or use of article before any name of the existing company for e.g.:

1. Ravi Builders and Contractors Ltd is same as Ravi Contractors and Builders Ltd

2. Congenial Tours Ltd is same as A Congenial Tours Ltd. and The Congenial Tours Ltd.

5. Variation in spelling of two name:

Name including slightly variation in spelling of existing company name would be considered as resembling name and department will reject the application for reserving a name of the company. For example,

– Color Technologies Ltd is similar as Colour Technologies Ltd.

6. Addition, deletion or modification of exiting name:

Addition, deletion or modification in any existing name of the company is not allowed and the concerned department will spare no time to reject the proposed name of the company. To instance,

1. Salvage Technologies Ltd is an existing name and it is same as Salvage Technologies Delhi Ltd. and Salvage Delhi Technologies Ltd.

2. Thunder Services Ltd is same as Thunder11 Services Ltd. and OneThunder Services Ltd.

7. Change in meaning either in Hindi or English:

Complete translation or transliteration or nay part of an existing name either in Hindi or English. For Example:

– National Electricity Corporation Ltd is same as Rashtriya Vidyut Nigam Ltd

8. Use of host name such as ‘www’ or a domain extension such as ‘net’, ‘org’, ‘dot’ or ‘com’ in one or both name: For Example

(i) Ultra Solutions Ltd. is same as Ultrasolutions.com Ltd.

(ii) Supreme Ultra Solutions Ltd. is not the same as Ultrasolutions.com Ltd.

9. Word or expression which can be used only after obtaining previous approval of Central Government are given below:

(a) Board;

(b) Commission;

(c) Authority;

(d) Undertaking;

(e) National;

(f) Union;

(g) Central;

(h) Federal;

(i) Republic;

(j) President;

(k) Rashtrapati;

(l) Small Scale Industries;

(m) Khadi and Village Industries Corporation;

(n) Financial Corporation and the like;

(o) Municipal;

(p) Panchayat;

(q) Development Authority;

(r) Prime Minister or Chief Minister;

(s) Minister;

(t) Nation;

(u) Forest corporation;

(v) Development Scheme;

(w) Statute or Statutory;

(x) Court or Judiciary;

(y) Governor;

(z) the use of word Scheme with the name of Government (s), State, India, Bharat or any Government authority or in any manner resembling with the schemes launched by Central, State or local Governments and authorities; and

(za) Bureau

 

GST monthly revenue touches Rs 1 lakh crore for first time; govt credits better compliance

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs | 0

The government announced today that the GST revenue for the month of April has crossed Rs 1 lakh crore – a first since GST was rolled out in July last year. As mentioned by the Ministry of Finance, the total gross GST revenue collected in April is Rs 1,03,458 crore.

Out of that CGST (Central GST) amounted to Rs 18,652 crore, while SGST (State GST) amounted to Rs 25,704 crore. IGST (Integrated GST) stood at Rs 50,548 crore, including Rs 21,246 crore that was collected on imports, and cess at Rs 8,554 crore, including Rs 702 crore collected on imports.

As mentioned in ANI, the finance ministry also noted that the central and state governments earned a total revenue of Rs 32,493 crore in CGST and Rs 40,257 in SGST, after settlement in April.

Moreover, the ministry noted that out of 87.12 lakh, 60.47 lakh GSTR 3B returns were filed for March till April 30. That makes 69.5% of the eligible proportion. The ministry also said that 11.47 lakh out of 19.31 lakh composition dealers filed their quarterly return (GSTR 4), amounting to 59.40%. In total Rs 579 crore in taxes were paid, which is included in the aforementioned GST revenue figure.

The ministry said, “The buoyancy in the tax revenue of GST reflects the upswing in the economy and better compliance. However, it is usually noticed that in the last month of the financial year, people also try to pay arrears of some of the previous months. Therefore, this month’s revenue cannot be taken as a trend for the future.”

The recently introduced e-way bill might be the reason behind the sudden spike in GST revenues. E-way bill, which is generated for consignments moving inter-state or intra-state was rolled out in April. The inter-state e-way bill was introduced in April 1, while the intra-state one was pushed to April 15.

The GST Council is scheduled to meet on May 4 next.

Source: Business Today

Private equity investors bring in deals worth $983 mn in January: Thornton

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0
January was dominated by investments in start-ups which contributed to 52% of total investment volumes

Private equity (PE) investors announced deals worth $983 million in January, a 23 per cent rise in value terms over last year, driven by big ticket transactions, says a Grant Thornton report.

According to the assurance, tax and advisory firm, in January, there were 84 PE deals worth $983 million, against 81 such transactions worth $796 million in January 2017.

“Private equity deals recorded 4 per cent increase in deal volumes and 23 per cent increase in deal value in January 2018 as compared to January 2017,” said Pankaj Chopda Director at Grant Thornton India LLP.

January was dominated by investments in start-ups which contributed to 52 per cent of total investment volumes. On the other hand, energy & natural resources and real estate sectors witnessed big-ticket PE investment over $100 million together capturing 39 per cent of total PE deal values.

Altico Capital’s investment of $195 million across five realty projects in Hyderabad and Pune was the top PE deal in January.

Other major transactions include Canada Pension Plan Investment Board’s 6 per cent stake acquisition in ReNew Power Ventures for $144 million and Warburg Pincus and SAIF Partners’ $50 million investment in Rivigo Services.

Going forward, the PE deal outlook looks bullish especially for the start-up sector.

“Increasing customer penetration in online transactions and increasing solutions to simplify online transactions offered by start-ups will attract interest in start-ups engaged in retail, fintech, foodtech, on demand services and travel and logistics,” Chopda said.

“Government reforms such as RERA, focus on cleantech and on increasing digital financial transactions will drive the momentum in banking and financial, real estate and energy and natural resources.

India-specific strategies by global and already present PE firms and funds raised by new players will act as catalyst for PE transactions,” he added.

Source: Business Standard