Saturday, July 27, 2019

The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (‘LDS’)

The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (‘LDS’)  

 Union Budget  the Honorable Finance Minister has announced  Sabka Vishwas Legacy Dispute Resolution Scheme

The scheme will be launched soon to resolve  the pending litigations that were raised under the excise and service tax regime

The Government is looking into resolve existing disputes under dispute resolution cum amnesty model. 

Why this scheme is so important?

There are more than Rs 3.75 lakh crore blocked in pre-GST tax litigations
Realisation of half of the amount will help to utilise in various infrastructural projects
After implementation of the GST, there is an urgent need to close the earlier disputes

What   relief is provided under the scheme ?
The settlement under the scheme depends upon 40 %  to 70%  of    the tax due under dispute in all cases

Applicable to all except for the following
      Cases already pending before the settlement commission or 
      Cases where parties face conviction

What are the other benefits available under the scheme?
 Waiver of interest and penalty on full payment of tax dues and not being subject to prosecution

Flat owners to pay 18% GST on the entire maintenance charge

The  concept of levying all services  under the GST to generate maximum revenue for Government with exception to threshold limit 

In GST the threshold limit  for each such activity is  key parameters to decide whether the exemption available or coming under ambit of  GST 

In  case of Flat owners, there are more clarity required from Government side.
Recently the Tamil Nadu Authority for Advance Ruling (AAR) had recently issued a notification on the lack of clarity about the amount on which GST (Goods and Service Tax) applicable on maintenance charges

The clarification of maintenance charges exceeds Rs.7500  what will be  GST rate.
The AAR  has clarified that  GST will be applicable on the entire not on the difference amount   For example,  if the maintenance charges will be  Rs.12000  then the GST will be payable on Rs.12000 not on the difference amount  Rs.12000 -  Rs.7500 

If the annual aggregate turnover doesn’t exceed Rs.20 lakhs then GST will be exempted
The  Residents’ welfare association has to pay GST only satisfaction of both the conditions
         1 Annual aggregate turnover is more than Rs.20 lakhs
          2 Monthly maintenance charges exceed Rs.7500 

Another clarification came if  a person is having  two units in single apartments then the ceiling of 7500 per month per member will be applied separately for each residential apartment.

The Input tax for the Resident welfare association will be available for tax paid on goods and services  from them  Example Generators, sanitary hardware fittings,  repair and maintenance charges etc

Saturday, January 12, 2019




Prior  to amendment  of Rs.100 per day
                                                                                                                                                ( Figures in Rupees)
Form No
Normal Fee  per form

Maximum Fee  irrespective of years  exclusive of normal fee
Per form
AOC 4     Balance sheet   and MGT 7




                                                                                                                                               ( Figures in Rupees)

Form No.
Normal Fee
First year  exclusive of normal fee  per day Rs.100
Second year exclusive of normal fee  per day Rs.100
Third  year exclusive of normal fee  per day Rs.100

AOC 4     Balance sheet   and MGT 7




Let us see  huge difference between first table and second table  and how the government amended the section without any upper ceiling limit    For suppose if  for some reason not filed  two years   they have to pay Rs.73000 plus normal fee per form.  

Saturday, August 18, 2018

updates from Economic Times

MUMBAI: The government is planning a separate legislation for registered valuers who can help arrive at better valuation of bankrupt companies under the insolvency process, a senior government official said today. 

Of the 40 largest NPA accounts sent to various NCLTs since last July, which together constitute around 40 per cent of the over Rs 11-trillion of bad loans, only seven have been resolved so far, wherein the banks have taken an average haircut of over 60 per cent only as some accounts like Alok Industries have been bid out for a paltry 17 per cent of the money the bankrupt company owed to the lenders. 

Noting that the nascent insolvency and bankruptcy code (IBC) is stabilising, corporate affairs secretary Injeti Srinivas said proper valuers are the critical missing link in the process now as most of the insolvency professionals are poorly equipped being it a new area for them. 

"You have registered valuers now. But you don't have a separate law for them. We are looking at the possibility of a separate law say for chartered accountants, or company secretaries. We are assessing whether we can have a full- fledged law to regulate them as they are most critical in the success of the insolvency process," Srinivas told an event organised by the industry lobby CII here 

He further said IBC has a robust legal framework, but the weak area is the lack of experience of the insolvency professionals (IPs). 

"The insolvency professionals are very poor now. Unlike chartered accountants, company secretaries, cost accounts, who have been there for decades together, the IPs are new," he said 

Noting that valuation is at the core of bankruptcy proceedings, he said, "valuation is a very serious area as this is lying at the heart of the entire process. If valuations are faulty, the outcomes will be undesirable." 

He also said other weak points are information utilities, which are still to take off. Similarly, the IPs have to be strengthened a lot more, may be under the insolvency professional entity. 

Ruling out auction of bankrupt assets as an unviable option, Srinivas said the "bankruptcy process is complicated as there are so many stakeholders, so many contractual obligations and so many jobs are at stake. It is not very easy to monetise everything and get a price." 

"May be at a future date we can think of a two stage process wherein at the first stage you will have financial and non-financial templates and evaluate, short-list their quotes and then go in for auctions. In which case the highest bidder will be able to get the asset," he said. 

Underlining the need to stick to the law-mandated timelines in resolving the crippled assets, Srinivas said, "we need to find ways and means to stick to the timelines. When you will have timely intervention, timely reference, the asset value would have been largely preserved." 

Dispelling the criticism that IBC is anti-promoter, he said the first amendment to the code in November 2017 was influenced by a Supreme Court order which had said deeply trenched promoters must realise that for them to continue in management they have to pay back. 

"This amendment has actually given a window of opportunity to the promoters-yet another chance for them to clear the dues. The law is not anti-promoter as the restriction is not on promoters but on resolution applicants. Promoters can also be a resolution applicant and has to pass the basis test like everybody else." 

Addressing the event, MS Sahoo, chairman of the Insolvency and Bankruptcy Board of India, said there is a critical role of the registered valuers in the IBC and the board has already registered eight registered valuers organizations 

Tuesday, July 24, 2018

Section 234F of Income Tax Act

Subject    Fees for default in furnishing return of income.

Effective from  1st  April 2018

When  a person  required to furnish a  return of Income  under Section 139   fails to furnish return, the penal provisions are as follows

Rs.5000 penalty if the return is furnished on or before the 31st day of December of the assessment year
Rs.10000   in any other case

Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees

Section 139   Explanation 2.—In this sub-section, "due date" means
,— (a) where the assessee 31[other than an assessee referred to in clause
(aa)] is— (i) a company 32[***]; or
 (ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; o
 (iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force, the 33[30th day of September] of the assessment year; 34[(aa) in the case of an assessee 35[who] is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year;]
(b) in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year;

 (c) in the case of any other assessee, the 31st day of July of the assessment year

Saturday, July 21, 2018

FCGPR penalty amount

For  ready reference  Fema reporting delays penal provisions

1] Reporting Contraventions
A) FEMA 20

Para 9(1)(A), 9(1)(B), FCTRS (Reg. 10) and taking on record FCTRS (Reg. 4)
Non submission of ECB statements
C) FEMA 120
Second/subsequent remittance without obtaining of UIN will be covered under Item 5 below). Non reporting/delay in reporting of acquisition/setup of subsidiaries/step down subsidiaries /changes in the shareholding pattern
D) Any other reporting contraventions (except those in Item 2 below)

Fixed amount : Rs10000/- (applied once for each contravention in a compounding application) + Variable amount as under:
Upto 10 lakhs:                  1000 per year
Rs.10-40 lakhs:                2500 per year
Rs.40-100 lakhs:              7000 per year
Rs.1-10 crore    :            50000 per year
Rs.10 -100 Crore :        100000 per year
Above Rs.100 Crore :   200000 per year

Paragraph 9(1)(A) of Schedule I

Delay in reporting inward remittance for issue of shares.
Paragraph 9(1)(B) of Schedule I
Delay in filing form FC(GPR) after issue of shares

Friday, May 11, 2018

Sebi tests new governance concepts source Business standard

Sebi tests new governance concepts
Introduces nonmandatory measures such as board evaluation, group governance units and disclosure of strategy

Mumbai, 11 May
The Securities and Exchange Board of India (Sebi) is testing new governance concepts like board evaluation, group governance units and disclosure of strategies in the Indian markets.
To begin with, the markets regulator has implemented these measures on a non mandatory basis.
Experts feel these could be made compulsory if proved effective.
Some of these concepts are operational in the developed world and are considered a key tool in empowering of minority investors.
Sebi, inacircular on Thursday, said companies may consider disclosures on board evaluation.
Further, companies with unlisted subsidiaries need to consider establishing a group governance policy.
More important, the regulator has said companies may spell out medium and longterm strategies, though it´s optional.
The measures are based on recommendations by the Uday Kotak panel on corporate governance.
“The entire Kotak committee focus was evolutionary, not revolutionary.
The bigger issues with large implications were decided to be done inaphased manner, as these kinds of disclosure would take time to implement,” saidJNGupta, managing partner, SES,aproxy advisory.
Sebi has said companies under the ´management discussion and analysis´ section of annual report, “within the limits set by its competitive position”, disclose their medium term and long
term strategy, based onatime frame as determined by its board of directors.
Gupta said disclosure on strategy should enumerate the steps necessary to realise the vision, typically overathree to fiveyear period.
“This would also stimulate the functioning of board towards the goal,” he said.
Sebi has also asked companies to undertake board evaluation,akind of performance appraisal for directors.
“Such evaluation enables boards to identify barriers in the way ofacompany´s growth.
Through this,acompany can identify its areas of strength and weaknesses, leading to positive impact on performance and shareholder value.
Hence, there should be some mechanism to periodically monitor the board evaluation,” said the chief executive ofaNifty company.
Suggestions seeking volunteer participation by listed entity 
|Disclosure of medium and long term strategy for measurement of progress
|Listed entity to consider board evaluation and disclosure of action taken |Constituting committee to monitor governance of unlisted subsidiaries

The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (‘LDS’)

The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (‘LDS’)    Union Budget  the Honorable Finance Minister has announced  Sa...