Category Archives: Goods and Service Tax

*MCA UPDATES* 12th January 2018

*Automatic Reactivation of DIN*

Stakeholders of Condonation of Delay Scheme (CODS) (notified vide General Circular No.16/2017 dated 29th December 2017) may kindly note that the process for ‘reactivation’ of the DINs in respect of disqualified Directors has been completed and the status of the relevant DINs can be checked now. Stakeholders are therefore requested to file necessary ‘overdue documents’ as per the scheme.

*CODS SCHEME NOT AVAILABLE TO SOME DIRECTORS*

 They may further note that the scheme is not applicable for those Directors who may have been associated with a company which was struck off under Section 248(1) of
the Companies Act-2013 and DINs for such individuals shall be
re-activated only upon receipt of orders for revival of the said company, as per due process laid down under Section 252 of the Companies Act-2013.

Please feel free to ask any query or clarification related to re-activation of your Company under CODS Scheme or through NCLT.

Thanking You

For Kashif Ali & Associates
Company Secretaries

Kashif Ali
FCS, LL.B, M.Com
Ph: 9718483209, Mail: cs.alikashif@gmail.com

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MCA Updates 6th January 2018

 

  1. New Name Reservation Service

         Discontinuation of E-form INC-1

MCA is proactively designing a Front Office service (replacing INC-1 eform with Web-Form) for Name Reservation and Change of Name for companies capturing only absolutely essential information from the applicants. The said service is likely to be rolled out on 26th January 2018

Therefore w.e.f. 00:00 hours on 06-01-2018, INC-1 will not be available on the MCA Portal. Stakeholders are  advised to submit INC-1 application till 23:59 hours of 05-01-2018. Stakeholders who reserved names using INC-1 are requested to use SPICe for incorporation immediately. However, resubmission of INC-1 is allowed till 23:59 hours of 11-01-2018.

  1. Discontinuation of INC-7 (Application for Incorporation of Company (Part I Company and Company with more than Seven Subscribers)

INC-7 form is likely to be discontinued w.e.f 10.01.2018 in case the name reserved using INC-1 is to be used for incorporation through SPICe form, users should file the form latest by 17.01.2018. It is requested that SPICe should be filed with due care as it will be allowed only one resubmission which has to be completed latest by 25.01.2018. Stakeholders may plan accordingly

  1. Modification in E-form DIR-3 (Application for Director Identification Number)

It is proposed to reengineer the process of allotment of DIN by allotting DIN to individuals only at the time of their appointment as Directors (If they do NOT possess a DIN) in companies.

 DIR-3 (Application for Director Identification Number) would be applicable for the allotment of DIN to individuals in respect of existing companies only and shall be filed by the existing company in which the proposed Director is to be appointed.

Further, DINs to the proposed first Directors in respect of new companies would be mandatorily required to be applied for in SPICe forms (subject to a ceiling of 3 new DINs) only.

It is also proposed to modify DIR-3 to permit allotment of upto 2 new DINs (since SPICe provides for upto 3 new DINs) only in respect of ‘Producer Companies’. A separate notification would be issued for the same and stakeholders may plan accordingly.

Thanking you

Kashif Ali

FCS, LL.B, M.com

 

The Companies Amendment Act, 2017

The Companies Amendment Act, 2017 which was passed by Rajya Sabha on 19th December 2017 has received assent of the president and same has been published in the Official Gazette of India on 3rd January 2018. The changes shall come in to force from the date notified by Ministry of Corporate Affairs. MCA may prescribe different dates for different provisions.

Kashif Ali, law graduate and fellow member of the Institute of Company Secretaries of India from  ‘Kashif Ali &  Associates, Company  Secretaries’ Delhi, has put his efforts to bring to you the amended sections with effect of amendments. This the first article in which we will share the details of amendment made in section 2 i.e. definition under the Act.

Sr. No. Amended Section Effect

1.

2(6)”associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.

 

Explanation.—For the purposes of this clause, “significant influence” means control of at least twenty per cent of total share capital, or of business decisions under an agreement;

 

‘Explanation.—For the purpose of this clause—

 

(a)   the expression “significant influence” means control of at least twenty per cent. of total voting power, or control of or participation in business decisions under an agreement;

 

(b) the expression “joint venture” means a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement;’;

 

1.      Now Significant influence means control of 20% of Voting Power or control of or participation in the business decision under an agreement. To make it consistent with accounting standard and listing agreement.

2.      Term ”Joint Venture” specifically defined to be in consistence with the Accounting Standard.

 

 

 

2.

2(28) “cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959);

2(28) “Cost Accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act;’;

 

Earlier the definition covers only Cost Accountant in employment now it includes Cost Accountant in Practice.

3.

2(30) debenture” includes debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not;

Provided that—

(a) the instruments referred to in Chapter III-D of the Reserve Bank of India Act, 1934; and

(b) such other instrument, as may be prescribed by the Central Government in consultation with Reserve Bank of India, issued by a company, shall not  be treated as debenture’

 

 

Some exclusions are made from the definition of  debentures.

4.

2(41) “financial year”, in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up:

 

Provided that on an application made by a company or body corporate, which is a holding company or a subsidiary  or associate company of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Tribunal may, if it is satisfied, allow any period as its financial year, whether or not that period is a year:

 

Provided further that a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause;

 

Now company or body corporate, which is an associate company of a company incorporated outside India can also make application for change in period of financial year.

Earlier this relaxation was available to company which is a holding company or subsidiary company of a company incorporated outside India.

5. 2(46) “holding company”, in relation to one or more other companies, means a company of which such companies are subsidiary companies;

‘Explanation.—For the purposes of this clause, the expression “company” includes any body corporate;’;

 

 

Now for the purpose of definition of the term ‘holding company’, the expression “company” will include any body corporate.

Now a company incorporated outside India could be considered to be the holding company of another company, for the purposes of the Act.

 

((made by Kashif Ali, cs.alikashif@gmail.com))

 

 

6.        2(49) “interested director” means a director who is in any way, whether by himself or through any of his relatives or firm, body corporate or other association of individuals in which he or any of his relatives is a partner, director or a member, interested in a contract or arrangement, or proposed contract or arrangement, entered into or to be entered into by or on behalf of a company;

 

Omitted
7. 2(51) “key managerial personnel”, in relation to a company, means—

(i) the Chief Executive Officer or the managing director or the manager;

(ii) the company secretary;

(iii) the whole-time director;

(iv) the Chief Financial Officer; and

(v) such other officer as may be prescribed;

(v) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel    by the Board; and

(vi) such other officer as may be prescribed;

One more category of KMP introduces which shall be person not below the rank of directors. He/she can be appointed by a director and must be in Whole tine employment of the company

 

8.

2(57) “net worth” means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account securities premium account and debit or credit balance of profit and loss account , after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation;

 

Now the debit or credit balance of profit and loss account are included in the definition of Net Worth.

9. 2(71) “public company” means a company which—

(a) is not a private company and;

(b) has a minimum paid-up share capital of five lakh rupees or such higher paid-up capital, as may be prescribed:

Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles ;

 

Including the word ‘and’ in the definition for more clarity that a public company must satisfy both the conditions mentioned in this sub-section.

10. 2(76) “related party”, with reference to a company, means—

(i) a director or his relative;

(ii) a key managerial personnel or his relative;

(iii) a firm, in which a director, manager or his relative is a partner;

(iv) a private company in which a director or manager is a member or director;

(v) a public company in which a director or manager is a director or holds along with his relatives, more than two per cent of its paid-up share capital;

(vi) any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager;

(vii) any person on whose advice, directions or instructions a director or manager is accustomed to act:

Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity;

 

(viii) any company which is—

(A) a holding, subsidiary or an associate company of such company; or

(B) a subsidiary of a holding company to which it is also a subsidiary;

“(viii) any body corporate which is—                                                           

(A) a holding, subsidiary or an associate company of such company;

(B) a subsidiary of a holding company to which it is also a subsidiary; or

 (C) an investing company or the venturer of a company;”

(ix) such other person as may be prescribed;

 

Earlier the definition used “Company” therefore only those entities that were incorporated in India are  coming  in the purview of the definition.

 

Now the “body Corporate” which is situated outside India shall fall under the definition of “Related Party”

 

11. 2(85) “small company” means a company, other than a public company,—

(i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore Ten Crore rupees; or

(ii) turnover of which as per its last profit and loss account  as per profit and loss account for the immediately preceding financial year does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees One Hundred Crore Rupees:

 

Provided that nothing in this clause shall apply to—

(A) a holding company or a subsidiary company;

(B) a company registered under section 8; or

(C) a company or body corporate governed by any special Act;

 

Increase the maximum paid-up share capital amount which can be prescribed for the purpose of determining a company as a small company from five crore rupees to ten crore rupees and prescribed turnover amount from twenty crore rupees to one hundred crore rupees.

 

12.

 

(87) “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company—

(i) controls the composition of the Board of Directors; or

(ii) exercises or controls more than one-half of the total share capital total voting power either at its own or together with one or more of its subsidiary companies:

Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.

Explanation.—For the purposes of this clause,—

(a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company;

(b) the composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors;

(c) the expression “company” includes any body corporate;

(d) “layer” in relation to a holding company means its subsidiary or subsidiaries;

 

As per the old definition a company in which the preference share capital was greater than its equity share capital, could become a subsidiary of an entity that holds the preference shares, even though it might not have control, or any voting rights in such a company.

 

Therefore this amendment was made to the term “total share capital” is replaced with the term ‘total voting power’, as equity share capital should be the basis for determining holding/subsidiary status

 

 

 

 

 

13. 2(91) “turnover” means the aggregate value of the realisation of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year;

2′(91) “turnover” means the gross amount of revenue recognised in the profit and loss account from the sale, supply, or distribution of goods or on account of services rendered, or both, by  a company during a financial year;’.

 

To exclude the excise duty and other taxes from the purview of this term and to make it consistence with the Accounting Standards

In the next article we will share the amended sections and their analysis for you.

Please feel free to ask any query or clarification for us

Thanking You

For Kashif Ali and Associates

Company Secretaries

Kashif Ali

FCS, LL.B, M.com

Ph: 9718483209,

Mail: cs.alikashif@gmail.com

 

LIST OF GOODS FOR CHANGE IN GST RATE RECOMMENDED BY GST COUNCIL IN ITS 21st MEETING HELD ON 9 TH SEPTEMBER, 2017

The GST Council has recommended changes in the GST rates on the following goods:

 

LIST OF GOODS FOR CHANGE IN GST RATE RECOMMENDED BY GST COUNCIL IN ITS 21st  MEETING HELD ON 9 TH   SEPTEMBER, 2017

 

S.No. HSN Description PresentGST Rate RecommendedGST rate
1. 0802 Walnuts, whether or not shelled 12% 5%
2. 0813 Tamarind dried 12% 5%
3. 2106 Roasted Gram 12% 5%
4. 2106 Custard powder 28% 18%
5. 2106 Batters, including idli I dosa batter 18% 12%
6. 2304, 2305,2306 Oil cakes Nil forcattle feed

5% for other uses

5% [irrespective of end use]
7. 2306 Cotton seed oil cake Nil forcattle feed

5% for other uses

Nil [irrespective of end use]
8. 3307 41 00 Dhoop  batti,  dhoop,  sambhrani  andother similar items 12% 5%
9. 3926 Medical    grade    sterile    disposablegloves of plastics 28% 18%
10. 3926 Plastic raincoats 28% 18%
11. 4016 Rubber bands 28% 12%
12. 4016 Rice rubber rolls for paddy de-huskingmachine 28% 18%
13. 4907 Duty Credit Scrips 12% 5%
14. 50 to 55 Khadi fabric, sold through Khadi andVillage    Industrries    Commission’s

outlets

5% Nil
15. 5801 Corduroy fabrics 12% 5% [with norefund of ITC]
16. 5808 Saree fall 12% 5%
17. 6501 Textile caps 18% 12%
18. 6912 Idols made of clay 28% Nil
19. 44, 68, 83 Idols   of   wood,   stone   [includingmarble] and metals [other than those made of precious metals] 28% 12%
20. 7102 Rough industrial diamonds includingunsorted rough diamonds 3% 0.25%
21. 8424 Nozzles for drip irrigation equipmentor sprinklers [mechanical appliances (whether or not hand operated) for projecting, dispersing or spraying liquids or powders] 18% 12%
22. 8445 Charkha for hand spinning of yarns,including amber charkha Nil I 18% Nil
23. 8528 Computer monitors upto 20″Note: Computer monitors upto 17″ are

already at 18%.

28% 18%
24. 9404 Cotton quilts 18% 5% on cottonquilts not exceeding

Rs.1000 per piece,

12% on cotton quilts exceeding Rs.1000 per piece

25. 9601 Worked corals, other than articles ofcoral 28% 5%
26. 9603 Brooms  and  brushes,  consisting  oftwigs or other vegetable materials, bound together, with or without handles.

Note: Phool bahari jhadoo is already at

Nil GST.

5% Nil
27. 9613 Kitchen gas lighters 28% 18%
28. Any Chapter Rosaries and prayer beads 18% 5%
29. Any Chapter Hawan samagri Applicablerate 5%
30. 4419 Table and Kitchenware etc. of wood 18% 12%
31. 4601, 4602 Grass, leaf and reed and fibre products,including mats, pouches, wallets 12% 5%
32. 4823 Paper Mache articles 18% 5%
33. 68 Stone inlay work 28% 12%
34. 6802 Statues, statuettes, pedestals; high orlow reliefs, crosses, figures of animals, bowls, vases, cups, cachou boxes, writing sets, ashtrays, paper weights, artificial fruit and foliage, etc; other ornamental goods essentially of stone. 28% 12%
35. 6909 Pots, jars and similar articles of a kindused for the conveyance and packing of goods of ceramic. 28% 12%
36. 6911 Tableware,       kitchenware,       otherhousehold articles and toilet articles of porcelain or china [including small accessories bathroom or sanitary fittings  such  as  soap  dishes,  sponge

baskets, toothbrush holders, towel hooks and toilet paper holders]

18% 12%
37. 6912 Tableware,       kitchenware,       otherhousehold articles and toilet articles other than of porcelain or china [including small accessories bathroom or sanitary fittings such as soap dishes, sponge baskets, toothbrush holders, towel hooks and toilet paper holders]. 28% 12%
38. 6913 Statues and other ornamental articles. 28% 12%
39. 8306 All goods, including bells, gongs andthe like, non-electric, of base metal; statuettes and other ornaments of base metal including metal bidriware; photograph, picture or similar frames, of base metal; mirrors of base metal, 18% 12%
40. 9601 Worked  ivory,  bone,  tortoise  shell,horn, antlers, mother of pearl, and other animal carving material and articles of these materials (including articles obtained by moulding)]; articles of coral 28% 12%

 

 

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

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

  1. 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 nder 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.

 

  1. 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.

 

  1. 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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