MCA notifies Period for Notice of issue of Share Capital under section 62

Share Capital

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.

PPF stays out of tax on EPF interest

The removal of tax exemption on annual contributions of ₹2.5 lakh and
above to provident fund accounts will not apply to the Public Provident
Fund (PPF), a senior official said.

“The cap is not applicable on PPF because there is already a limit of
₹1.5 lakh contribution in a year to PPF,” the official said.

The government has proposed changing taxation rules for provident funds
by levying income-tax on the interest earned on contributions exceeding
₹2.5 lakh in a financial year.

SC tells CBDT to address NRI tax fears

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.

RBI to set up a 24×7 helpline for Digital Payment Services

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

RBI to adopt “One Nation One Ombudsman” approach

Key facts

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.

MCA21 Version 3.0 to be Launched

The Ministry of Corporate Affairs (MCA) will launch the data
analytics-driven MCA21 Version 3.0 by October 2021 in the financial year

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
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
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.

100% restriction to avail ‘ITC’, if no GSTR-1 is filled by the supplier

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

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

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.

MCA initiates decriminalisation of LLP Act

The ministry of corporate affairs (MCA) has initiated the process of
decriminalisation of the Limited Liability Partnership (LLP) Act, based
on the recommendations of a high-level government panel.

“The objective of the decriminalisation exercise is to remove
criminality of offences from business laws where no malafide intentions
are involved,” the ministry said in a statement on Wednesday.

MCA notifies Companies (Incorporation) Amendment Rules, 2021

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.

GST is applicable to canteen food or not?

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.