200,000 more directors disqualified for holding posts in defaulting companies

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The govt has struck off more than 200,000 firms that have not complied with the provision of the law from the list maintained by the RoC and frozen their bank accounts to check any siphoning off of funds.

The corporate affairs ministry has disqualified another 200,000 directors for holding posts in defaulting companies that have not filed their financial returns for the last three years or more, taking the total number to over 300,000, while cancelling the registration of another 10,000 companies.

These directors won’t be able to hold board seats in other companies as well and may have to resign soon from them, potentially impacting other firms as well.

While the current law does not provide for any appeal, the government is thinking of exercising “the review power to take any such plea into consideration,” PP Chaudhary, minister of state for corporate affairs, told ET. “By operation of law, these directors are disqualified but we have to see under what provision of law we can examine this. If we need to frame a rule we will do it.”

According to Section 167 of the Companies Act, a director is disqualified automatically from all other posts of director once barred under Section 164, said Chaudhary, a lawyer by profession.

200,000 more directors disqualified for holding posts in defaulting companies

The government has struck off more than 200,000 firms that have not complied with the provision of the law from the list maintained by the Registrar of Companies and frozen their bank accounts to check any siphoning off of funds.

“This exercise is part of demonetisation. No one had the guts to stop all this till now. It will prove a catalyst for the Indian economy,” said the minister of state, who took over this responsibility after the recent reshuffle. He said the money trail will be traced after data mining of these companies.

 

The government will prioritise those cases where there is evidence of a large movement of cash. He rejected the criticism that the action was retrospective in nature.

“Law has not been retrospective. Companies had two years to file returns… there was healing time,” the minister of state said. So far the shell firm chase has been limited to defaulting firms that have not filed their financial returns for the last three years or more but the government will soon go after compliant firms as well to check their holding companies structures and fund flows.

Chaudhary said the intent is to restore trust in the corporate structure and also improve ease of doing business in the country.

“We do not want to create any terror. Trust in the corporate structure is gone and we want to increase the investor confidence, not interfere in the corporate structure,” Chaudhary said.The government wants to promote ease of doing business to ensure investors that their money is safe in India, he added.

“This exercise has been triggered due to governance. We have shown scale and speed in an unparalleled way in the way we have acted against these companies and directors,” Chaudhary said.

Last week, the government made public the names of 55,000 directors who were disqualified under Section 164 (2) (A) of the Companies Act. The list included the names of prominent politicians including former Jammu and Kashmir chief minister Omar Abdullah and Malayalam filmstar Mohanlal among others.While the government will not impose any penalty on the directors of government-owned companies that figured in the list of defaulters, those in private firms will have to resign from other board seats and won’t be eligible for reappointment for up to five years.

The corporate affairs ministry will also look into these companies to identify shell companies to see if they have been used for money laundering or any other illegal activity. “We need to find who the shell company’s real beneficiary is… It could be in the name of the cook or a driver. We are taking stock of the money in these companies pre and post demonetisation,” Chaudhary said.

While spotting defaulting companies is an ongoing process, Chaudhary said that, using artificial intelligence, the government will sift out the shell companies from among those that are compliant with regulations and also create an early warning system. “The system will trigger alerts every time we see unusual activity taking place in a company. It will also help us find out the beneficial owner of the shell companies,” he said.

FDI likely to rise further after GST: Moody’s

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FDI in India grew by 18% during 2016 to touch $46 billion, data released by the Department of Industrial Policy and Promotion showed.

India is likely see increased foreign direct investment (FDI) inflows on the back of reforms such as introduction of the goods and services tax and the bankruptcy code, international ratings agency Moody’s said in a report on Monday.

“Combined with reforms such as the introduction of a goods and services tax, which lowers the cost and complexity of doing business, and a simplified and clarified bankruptcy code, FDI is likely to rise further,” the agency said in its report on how structural reforms by Asia Pacific sovereigns could become more effective from stronger global demand.

In India, Moody’s said, the government has raised ceilings for authorised FDI in a number of sectors. “FDI has already increased substantially, albeit from a low base,” the report said.FDI in India grew by 18% during 2016 to touch $46 billion, data released by the Department of Industrial Policy and Promotion showed.

The Narendra Modi government has liberalised FDI framework for a number of sectors including insurance, defence and civil aviation and also taken steps towards the ease of doing business. Moody’s said the positive economic impact of India and Indonesia’s measures to attract higher levels of FDI, combined with steps to improve business conditions, are likely to be more apparent in a stronger global macroeconomic environment. The agency has maintained India’s sovereign rating at Baa3 positive.

“India and Indonesia’s governments have both implemented reforms over the past few years to improve the overall business climate and, more specifically, to attract FDI,” Moody’s said, adding that a robust global environment is likely to amplify the positive impact of the reforms on the two countries’ attractiveness to foreign investors.

Moody’s Investors Service said the strengthening in global demand since the end of last year has buoyed Asia Pacific’s trade-reliant economies, but added that faster export growth has yet to feed into a sustainable acceleration in output growth.

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

CBDT signs 4 more APAs with taxpayers in August

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The Central Board of Direct Taxes (CBDT) signed four more advance pricing agreements (APAs) in August with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.

The four APAs entered into during August, 2017 pertain to various sectors of the economy like telecom, banking, manufacturing and education, an official statement said today.

“Out of these four agreements, three are unilateral and one is a bilateral,” it said.

According to the statement, the bilateral APA is for international transactions between an Indian company and a UK-based company and this is the eighth bilateral APA with the United Kingdom and 13th overall (the other five being with Japan).

With the signing of these four agreements, the total number of APAs entered into by CBDT has reached 175, the statement said, adding, “this includes 162 unilateral APAs and 13 bilateral APAs.”

Besides, in the current financial year, a total of 23 APAs (2 bilateral and 21 unilateral) have been signed till date, the statement noted.

The APA provisions were introduced in the Income-tax Act in 2012 and the “rollback” provisions were introduced in 2014.

The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.

The statement pointed out that since its inception, the APA scheme has been well-accepted by taxpayers and that has resulted in more than 800 applications (both unilateral and bilateral) being filed so far in five years.

Noting that the progress of the APA scheme strengthens the government’s resolve of fostering a non-adversarial tax regime, the statement said the Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.

 

Source: Times of India

Biz can file returns, pay taxes for July on GSTN portal

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Businesses can start filing their first tax return under the new Goods and Services Tax (GST) regime as the GST Network has started the facility for return filing and paying taxes on the portal.

“The window for filing GSTR–3B has opened on August 5 and is fully functional now. Taxpayers can log into their account at the GST Portal and file their GSTR–3B return any time. They can also make tax payment using internet banking at the portal,” Navin Kumar, GSTN Chairman, said.

The GST returns for July and August will be filed on the Goods and Services Tax Network (GSTN) portal by filling up GSTR 3B form in which the taxpayer needs to provide consolidated details of outward supplies and input credit.

The taxpayer has to file a summary of self-assessed liabilities, input tax credit (ITC) and details of tax payment.

The last date of the filing the GSTR–3B for July 2017 is August 20, 2017 and the same for the month of August 2017 is September 20.

While filing their tax retuns in the GSTR–3B, a taxpayer has to provide details in three sections . In the first section, the summary details of liabilities on outward supplies and inward supplies subject to reverse charge including tax paid on zero-rated supplies are to be provided. Also, the taxpayer has to give details of interstate supplies and the integrated goods and services tax (IGST) paid.

In the second section, the taxpayer has to declare self-assessed ITC available, ITC reversals and ineligible ITC. In the third section, the taxpayer has to declare the details of payment of tax with accumulated ITC and/or cash available in cash ledger.

“The taxpayer is required to file his return by electronically signing either using DSC (compulsory for companies) or through Electronic Verification Code (EVC) sent on taxpayer’s registered mobile,” GSTN said in a statement.

Later, when the taxpayer files GSTR 1 and GSTR 2, the details furnished in GSTR–3B would be compared with the details generated from the declarations in GSTR 1 and GSTR 2 and in case of short payment of tax, the taxpayer will have to pay any additional amount along with interest through GSTR 3, it added.

Over 71.30 lakh excise, service tax and VAT payers have migrated to the GSTN portal and over 15 lakh new assessees have registered on the portal.

The final GST returns for July will have to be filed by these businesses by September 5 instead of August 10. Companies will have to file sale invoice for August with GST Network by September 20 instead of September 10 earlier.

The sales returns for September will have to be filed by October 10.

Source: http://www.thehindubusinessline.com/economy/biz-can-file-returns-pay-taxes-for-july-on-gstn-portal/article9807490.ece

77.5L traders registered under GSTN till July 18

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The Government on Friday said as many as 77.5 lakh traders are registered on GSTN and help desks have been set up in every commissionerate to facilitate filing of tax return. “Till July 18, 2017, the total number of GSTIN (Goods and Services Taxpayer Identification Number) registration is 77,55,416,” Minister of State for Finance Santosh Kumar Gangwar said in a written reply to the Lok Sabha.

He further said Internet is not required for doing or conducting business, but it would be required only for the purpose of filing of returns under the GST. “The Government has ensured that the return filling process is made convenient for all taxpayers by setting up help desks in every commissionerate and by appointing GST Suvidha Providers,” he said.

Gangwar in another reply said it is difficult to predict whether corruption will be wiped out, but the implementation of GST will definitely bring about transparency in business operations related to taxation. The implementation of GST in itself is expected to have a positive impact on the overall growth of the economy, he said, adding that it is also expected to have a positive impact on the ease of doing business and making India an even more attractive destination for foreign investments.

Various studies, including that from NCAER, have estimated that growth in GDP to be around 1-2 per cent due to the implementation of GST.Replying to another question, Gangwar said, since GST has been implemented only with effect from July 1, it cannot be stated that it helps to bring out black money at this moment.However, he said, the provision in SGST, CGST, UTGST and IGST have a self policing mechanism.

Source: Daily Pioneer

GST deadline: Tax composition scheme last date extended till August 16

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The government today extended the deadline for small businesses to opt for the composition scheme in the GST regime by nearly four weeks to August 16.

The government today extended the deadline for small businesses to opt for the composition scheme in the GST regime by nearly four weeks to August 16.

Small businesses with turnover of up to Rs 75 lakh earlier had time till today to opt for the scheme in the Goods and Services Tax regime. “The Board hereby extends the period for filing an intimation in Form GST CMP-01… up to August 16, 2017,” the Central Board of Excise and Customs (CBEC) said in an office order.

To opt for composition scheme, the taxpayer needs to log into his account at the GST Portal www.gst.gov.in and select ‘Application to opt for the Composition Scheme’ under ‘Services’ menu. They have to fill up the Form GST CMP-01 to opt for the scheme.

Under composition scheme, traders, manufacturers and restaurants can pay tax at 1, 2 and 5 per cent, respectively.  Businesses opting for the composition scheme will see a lesser compliance burden as they will have to file returns only once in a quarter as against monthly returns to be filed by other businesses.

There are over 70 lakh excise, VAT and service taxpayers who have migrated to the GSTN portal for filing returns in the GST regime which kicked in from July 1.  Besides, there are over 8 lakh new taxpayers who have registered on the portal. These new registered taxpayers can opt for the composition scheme at the time of registration.

Source: Financial Express