The Ministry of Corporate Affairs (MCA) on 11th February 2021 has published the Companies (Share Capital and Debentures) Amendment Rules, 2021 to further amend the Companies (Share Capital and Debentures) Rules, 2014.
The Amendment brings in a new rule 12A which notifies the period for notice of issue of share capital under section 62.
According to the notification the time period within which the offer of acceptance towards the issue of further shares by a company shall be not less than seven days from the date of the offer.
The tax uncertainty faced by non-resident Indians (NRIs) — which the Budget didn’t address — and difficulties that companies may run into following the proposal to dismantle Income Tax Settlement Commission (ITSC) have triggered court cases.
On Wednesday, the Supreme Court directed the apex tax body Central Board of Direct Taxes (CBDT) to respond to a representation from an NRI, who may be exposed to higher tax, for having overstayed in India due to Covid-19. And, on Tuesday, Saravana Bhavan, the largest chain of restaurants serving South Indian food, filed a petition before the Madras High Court to direct ITSC, which was formed to settle complex tax disputes, to accept its application.
The Governor of Reserve Bank of India, Shaktikanta Das, recently announced that the central bank will set up a 24*7 helpline platform in order to strengthen the digital payment services in India. This announcement was made through the Statement on Development and Regulatory policy.
1) RBI has come up with many safety and security features apart from the measures to redress the grievances of the users in the past as well. 2) This announcement will further enhance the digital payments experience of users in India. 3) The RBI released the Payment Systems Vision document. 4) The document highlights the need of setting up a 24×7 helpline in order to address the customer queries with respect to the digital payment products. 5) As per the guideline, major payment system operators are required to facilitate setting-up of a centralised 24×7 helpline to address the customer queries by September 2021. 6) Apart from this helpline facility, guidelines will also be issued on the outsourcing for the Operators and Participants of Authorised Payment Systems.
Currently, there are dedicated ombudsman schemes for the consumer grievance redressal in the banking, non-bank finance companies and digital transactions. Now, the bank has decided to integrate the three Ombudsman schemes. The central bank has also operationalized the complaint management system (CMS) portal as a one stop solution. This portal will be used for the alternate dispute resolution of the customer complaints which are not resolved by regulated entities.
Objectives of the move
The central bank has decided to adopt the approach of “One Nation, One Ombudsman” with the objective of making the process of redress of grievances easy. The approach will make the grievance process easy by enabling the customers to register the complaints under the integrated scheme with a centralised reference point.
The Ministry of Corporate Affairs (MCA) will launch the data analytics-driven MCA21 Version 3.0 by October 2021 in the financial year 2021-22.
1)The MCA21 Version 3.0 system is the Mission Mode e-Governance project of India. 2)The Ministry of Corporate Affairs highlights that the project will comprise of the additional modules for e-Adjudication, e-Consultation, and Compliance Management. 3)It is a technology-driven project that will be launched with the aim of, i) Promoting Ease of Doing Business, ii) Strengthening the enforcement, iii) Facilitating the seamless integration and iv) Exchanging the data among the regulators and v) Enhancing the user experience. 4)Project will also comprise of the Micro-services architecture along with high scalability and capabilities for advanced analytics. 5)The MCA21 V3 project further aims to transform the corporate regulatory environment in India. 6)Project is aided by the latest technologies such as Artificial Intelligence. 7)Major components of the projects include e-scrutiny, e-adjudication, MCA Lab, e-Consultation and Compliance Management System (CMS). 8)This project will be operated by L&T InfoTech. 9)It will also comprise of the interactive user dashboards, chatbot enabled helpdesk and the mobile apps.
It is submitted that a new clause (aa) to sub-section (2) of section 16 of The Central Goods and Services Tax, Act, 2017 (CGST Act, 2017) is being inserted in Finance Bill, 2021. Please note that these proposals will come into effect from a date to be notified later. It is stated that Sections 2 to 79 of Finance Act, 2021 shall come into force on the 1st day of April, 2021 and Sections 99 to 114 of Finance Act, 2021 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
It is submitted that Section 16 of CGST Act, 2017 contains four (4) sub-section out of which sub-section (1) talks about the ‘eligibility for taking Input Tax Credit (ITC)’. Whereas sub-section (2) talks about ‘conditions which should be satisfied for taking ITC’. Further additional condition has been also put in sub-section (3) regarding ‘ITC not admissible if depreciation claimed on tax component’. Moreover, sub-section (4) provides the ‘time limit for availing ITC’.
It is stated that for conditions and restrictions, we have to see the provisions of Section 16 (2) with Rule 36 of the Central Goods and Services Tax, Rules, 2017 (“CGST Rules, 2017”). With the amendment by Finance Act, 2021 a further new condition has been inserted is Section 16(2) of the CGST Act, 2017. Section 100 of the Finance Act, 2021 provides that-
“100. In section 16 of the Central Goods and Services Tax Act, in sub-section (2), after clause (a), the following clause shall be inserted, namely:––
“(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;”.
It is submitted that the aforesaid is one more condition regarding entitlement of ITC. It provides that ITC on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in the statement of outward supplies (GSTR-1) as specified in Section 37 of the CGST Act, 2017 and such details have been communicated to the recipient of such invoice or debit note.
It is pertinent to note that pursuant to the Rule 59(3) of CGST Rules, 2017, the details of outward supplies furnished by the supplier shall be made available electronically to the concerned registered person (recipient) in PART A of FORM GSTR-2A, in FORM GSTR-4A and in FORM GSTR-6A through the common portal after the due date of filing of FORM GSTR-1.
In this regard it is important to note that Rule 36(4) of the CGST Rules, 2017 was recently amended vide Notification No. 94/2020-Central Tax dated December 22, 2020 w.e.f. January 01, 2021 to restrict the ITC to 5% in respect of invoices or debit notes not furnished by supplier in FORM GSTR-1.
Rule 36 of CGST Rules, 2017 provides ‘documentary requirements and conditions for claiming input tax credit’ under Chapter V INPUT TAX CREDIT. Rule 36(4) of CGST Rules, 2017, now, restricts the credit relating to the invoices not uploaded by the suppliers in their FORM GSTR-1 to the extent of 5%. It provides that ITC can be here after claimed in the FORM GSTR-3B only to the extent of 105% of eligible ITC reflected in FORM GSTR-2A in aggregate.
Rule 36(4) of CGST Rules, 2017 is concerned with regard to restriction on the availment of ITC in cases where FORM GSTR-1 has not been uploaded by the suppliers under sub-section (1) of section 37. It is important to note that this newly inserted rule is a substantive condition to be fulfilled for the availment of ITC in addition to conditions prescribed under Section 16 of CGST Act, 2017.
Now it is seeming that the aforesaid amendment is only to provide statutory backing to much debated Rule 36(4) of the CGST Rules, 2017.
The Ministry of Corporate Affair (MCA) notified Companies (Incorporation) Amendment Rules, 2021 which sought to amend the Companies (Incorporation) Rules, 2014.
The notification amended Rule 41 of Companies (Incorporation) Rules, 2014 which relates to Application under section 14 Companies Act, 2013 for conversion of public company into private company.
The notification specified that where an objection has been received or Regional Director on examining the application has specific objection under the provisions of the Act, the same shall be recorded in writing and the Regional Director shall hold a hearing or hearings within a period of 30 days as required and direct the company to file an affidavit to record the consensus reached at the hearing, upon executing which, the Regional Director shall pass an order either approving or rejecting the application along with the reasons within 30 days from the date of hearing.
In case where no consensus is received the Regional Director may approve the conversion, if he is satisfied having regard to all the circumstances of the case, that the conversion would not be against the interests of the company or is not being made with a view to contravene or to avoid complying with the provisions of the Act, with reasons to be recorded in writing.
However, the conversion shall not be allowed if any inquiry, inspection or investigation has been initiated against the company or any prosecution is pending against the company under the Act.
There is also a rising debate about whether GST will be applicable to corporate services like canteen food served to employees on a cost. Mani said that in another recent decision, it was decided by GAAR that the employer is liable to pay GST on canteen food served to its staff for which the latter pays a charge. The GST on canteen food is set at 5 percent. This would mean that this tax payable by the employer to the GST authorities will be recovered from the staff in the form of higher prices. According to Section 46 of the Factories Act, 1948, any factory employing more than 250 workers is required to provide a canteen facility to its employees.