MCA Updates
On 21st November 2022, the MCA amended the Companies (Registered Valuers and Valuation) Rules, 2017. These rules may be called Companies (Registered Valuers and Valuation) Amendment, Rules, 2022.
The salient highlights of the amendments are mentioned below:
- There is a new addition to the criteria to be a registered valuer. The amendment directs that any partnership entities or Company shall not be eligible to be a registered valuer in the following cases:
- If It is not a member of a registered valuer organisation or
- If it is a member of more than one such registered valuer organisation
Entities have six months to comply with the requirement.
- In addition, new rules, i.e., 7A and 14A, have been inserted that require registered valuers to intimate the Insolvency & Bankruptcy Board of India (IBBI) regarding changes in the governing board or its committee or appellate panel or in personal details, including any alteration in the composition of directors or partners or any amendment in any provision of the partnership agreement or Memorandum of Association (MoA), which may impact registered valuer registration, after the payment of the specified fee.
- A registered valuers organisation shall intimate the authority for a change in the composition of its governing board, or its committees or appellate panel, or other details, after payment of the fee. It is further clarified that a member functioning as a whole-time director in the company registered as a valuer shall not be treated as an employee. Click here to access the Notification
SEBI Updates
Applicability of GST on fees remitted to SEBI
Chapter XX of the Operational Circular dated August 10, 2021 regarding ‘Bank account details for payment of fees’, inter alia, provides the procedure to be followed for payment of fees, as applicable, under the SEBI (Issue and Listing of Non -Convertible Securities) Regulations, 2021 and the SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008. SEBI observed that in order to address the concern of ‘fastest finger first’, it is essential to modify the book building process to ensure allocations based on the ‘best bid’ rather than the bidder with the best technology for placing the fastest bid.
SEBI informed the intermediaries about the levy of Goods & Services Tax (GST) on the fees payable to SEBI. Accordingly, SEBI has amended the paragraph B of Chapter XX (Bank Account details for payment of fees) of NCS Operational Circular which prescribed the format for providing the remittance particulars. Click here to access the Circular
Registration And Regulatory Framework For Online Bond Platform Providers (OBPPs)
With a view of increasing number of Online Bond Platforms (OBPs), offering debt securities to Non-institutional Investor and with the bond market offering tremendous scope for development, particularly in the non-institutional space, there is a need to place checks and balances in the form of transparency in operations and disclosures to the investors dealing with such OBPs.
In view of the above and in order to streamline the operations of these OBPs and to facilitate the participation of investors in the bond market, SEBI vide notification dated November 09, 2022 prescribed the framework for entities operating/ desirous of operating as OBPPs under regulation 51A of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (‘NCS Regulations’).
In addition to complying provision of Regulation 51A of NCS Regulation, such entities shall ensure compliance with the requirements specified in Annex-A of the SEBI circular dated November 14, 2022. Click here to access the circular
Scheme(S) of Arrangement by Entities who have listed their Non-Convertible Debt Securities (NCDS) or Non-Convertible Redeemable Preference Shares (NCRPS)
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was amended with respect to Scheme(s) of Arrangement by entities who have listed their NCDs/NCRPS. Newly inserted Regulations provide that the listed entity that has listed NCDS or NCRPS, to file draft scheme of arrangement with Stock Exchange(s) for obtaining the No Objection Letter, before filing such scheme with any court or Tribunal and designated stock exchange to forward such draft schemes to SEBI in the manner prescribed by SEBI. Click here to access the Circular
RBI Updates
RBI Updated Master Direction On Import Of Goods And Services
The Reserve Bank of India (RBI) on November 21, 2022, updated the Master Direction on Import of Goods and Services. The following instructions has been updated in the Master Direction:
- Under the Time Limit for Deferred Payment Arrangement it was stated that any deferred payment arrangements (including suppliers’ and buyers’ credit) entered into, for up to three years in case of import of capital goods and up to one year or the operating cycle whichever is less, in case of import of non-capital goods, shall be treated as trade credits for which the procedural guidelines as laid down in the Master Direction on External Commercial Borrowings, Trade Credits and Structured Obligations (updated from time to time) may be followed.
- In case of pre-payment of usance import bills, remittances may be made only after reducing the proportionate interest for the unexpired portion of usance at the rate at which interest has been claimed or LIBOR/any other widely accepted/Alternative reference rate of the currency in which the goods have been invoiced, whichever is applicable. Where interest is not separately claimed or expressly indicated, remittances may be allowed after deducting the proportionate interest for the unexpired portion of usance at LIBOR/any other widely accepted/Alternative reference rate15 of the currency of the invoice. Click here to access the Master Direction
RBI Updated Master Direction On Export Of Goods And Services
The Reserve Bank of India (RBI) on November 22, 2022, updated the Master Direction on Export of Goods and Services. Click here to access the Master Direction
Operationalization Of The Central Bank Digital Currency – Retail (E₹-R) Pilot
The Reserve Bank of India (RBI) on November 29, 2022, issued a notification regarding the operationalization of the Central Bank Digital Currency – Retail (e₹-R) Pilot. The following have been stated:
- The e₹-R would be in the form of a digital token that represents legal tender and it would be issued in the same denominations that paper currency and coins are currently issued.
- The digital tokens would be distributed through intermediaries, i.e., banks. Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones/devices. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M).
- Eight banks have been identified for phase-wise participation in this pilot. The first phase will begin with four banks, viz., State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank in four cities across the country. Four more banks, viz., Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank will join this pilot subsequently. The pilot would initially cover four cities, viz., Mumbai, New Delhi, Bengaluru, and Bhubaneswar and later extend to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla. Click here to access the Press Release
Income Tax Updates
CBDT Notifies Public Investment Fund As Sovereign Wealth Fund
CBDT notifies that the public investment fund known as sovereign wealth fund states that in respect of the investment made by a specified person in India on or after the date of publication of this notification in the Official Gazette but on or before the 31st day of March, 2024 are subject to fulfil a set of conditions. Click here to access the notification
Proposal To Introduce Common ITR
A new proposal is made to introduce a common ITR by merging all the existing returns of income except ITR-7. However, the current ITR-1 and ITR-4 will continue. This will give an option to such taxpayers to file the return either in the existing form (ITR-1 or ITR-4) or the proposed common ITR, at their convenience.The draft aims to ease the filing returns and reduce the time for filing the ITR by individuals and non-business-type taxpayers considerably. Click here to access the circular
GST Updates
Seeks To Empower The Competition Commission Of India To Handle Anti-Profiteering Cases
The Central Government, on the recommendations of the GST Council, hereby empowers the Competition Commission of India established under sub-section (1) of section 7 of the Competition Act, 2002(12 of 2003), to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him. This notification shall come into force with effect from 1st Dec’22. Click here to access the notification
Clarification On The Refund Issue
As per Section 54(3) of CGST Act, 2017, which provides for the refund of unutilized input tax credit in cases where credit is accumulated on account of rate of tax of inputs being higher than the rate of tax on output supplies i.e. on account of inverted duty structure. The formula for grant of refund in cases of inverted duty structure is prescribed by Rule 89(5) of CGST Rules 2017. Restriction has been placed on refund of unutilised input tax credit on account of inverted duty structure. Click here to access the circular
Guidelines For Verifying The Transitional Credit
Transitional Credit is the balance of CENVAT and Input Credit available with the assessee as on June 30, 2017. Transitional Credit also refers to the embedded tax in the closing stock of goods as on June 30, 2017. Upon introduction of GST, assessees were allowed to take credit of these balances by filing TRAN forms namely TRAN 1, TRAN 2 and TRAN 3. Once the TRAN forms were filed, the assessee was able to avail the credit in his Electronic Credit Ledger under GST and utilise it for payment for tax on outward supply. The journey of the assessees in availing transitional credit was however not smooth. The assessees faced numerous problems and difficulties while filing TRAN forms. This led to multiple litigations in the matter in various forums. As a result this circular was released with the guidelines for Transitional Credit. Click here to access the circular
