MCA Updates
MCA tightened the due date for filing of Form CSR-2 Regulatory Updates
The Ministry of Corporate Affairs (‘MCA’) has shortened the timeframe for reporting CSR compliances in Form CSR-2. For the financial year 2023-2024, Form CSR-2 shall be filed on or before December 31, 2024.
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MCA relaxed the cut-off date for mandatory dematerialization for producer companies Regulatory Updates
The Ministry of Corporate Affairs (‘MCA’) has granted a much-needed relaxation for producer companies to comply with the mandatory dematerialization requirements under the Companies Act, 2013. The deadline has now been pushed from September 30, 2024 to 31 March 2028.
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Holding AGM/EGM through Video Conference Regulatory Updates
Companies having AGM due in the year 2024 or 2025 may conduct it through Video Conferencing (‘VC’) or Other Audio Visual Means (‘OAVM’) on or before 30th September 2025 in accordance with the requirements laid down in the General Circular issued on May 5, 2020. This shall not be construed as an extension of time for conducting the AGM. The Ministry has also allowed convening an EGM through VC or OAVM till September 25, 2024.
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Merger of a Foreign Company with an Indian Company Regulatory Updates
The Ministry of Corporate Affairs (‘MCA’) has notified amendments to Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. Some of the key amendments are as below, where a merger/amalgamation is entered between the transferor foreign company incorporated outside India being a holding company and the transferee Indian company being a wholly owned subsidiary company incorporated in India.
(i) both the companies shall obtain the prior approval of the Reserve Bank of India;
(ii) the transferee Indian company shall comply with the provisions of section 233 of the Companies Act, 2013.
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RBI Updates
Liberalized Remittance Scheme (LRS) for Resident Individuals – Discontinuation of Reporting of Monthly Return
From the reporting month of September 2024, AD Category-I banks are not required to furnish information on the number of applications received and the total amount remitted under LRS on a monthly basis in the Centralised Information Management System (CIMS). They will be required to upload only transaction-wise information under LRS daily return at the close of business of the next working day on CIMS. In case no data is to be furnished, AD Category-I banks shall upload a ‘NIL’ report. Regulatory Updates
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SEBI Updates
Master Circular on Surveillance of Securities Market Regulatory Updates
In order to ensure the availability of consolidated information contained in all the circulars pertaining to the surveillance of the securities market in one place, SEBI has consolidated all the provisions of the relevant circulars in the Master Circular on Surveillance of the Securities Market. This Master Circular shall come into force from September 23, 2024.
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Operational Guidelines for Foreign Venture Capital Investors (FVCIs) and Designated Depository Participants (DDPs)
SEBI amended the (Foreign Venture Capital Investors) Regulations, 2000 vide notification dated September 05, 2024, which shall come into force with effect from January 01, 2025. The notification outlines various provisions related to the registration of FVCI through Designated Depository Participants, eligibility conditions, renewal of registration, etc. Regulatory Updates
To facilitate a smooth transition to the amended FVCI regime, SEBI has issued necessary guidance in the form of operational guidelines. These guidelines were provided as an annexure to the circular and shall come into force with effect from January 01, 2025.
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Reduction in the timeline for listing of debt securities and Non-convertible Redeemable Preference Shares to T+3 working days from existing T + 6 working days Regulatory Updates
To facilitate faster access to funds for issuers and investors to have early credit for their investment, the listing timeline for the public issue of debt securities and NCRPS has been reduced from T+6 to T+3 working days. Regulatory Updates
Adherence to the provisions of this circular will be voluntary for public issues opening on or after November 01, 2024, and mandatory for issues opening on or after November 01, 2025. However, during the period of voluntary applicability, the provisions relating to refund/ unblocking of application monies, in case of failure of listing shall become applicable only afterT+6 working days, even in cases where the issuer has chosen T+3 as the listing timeline but fails to meet the same. Regulatory Updates
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Usage of UPI by individual investors for making an application in the public issue of securities through intermediaries
To align the application process for the public issue of debt securities, non-convertible redeemable preference shares, municipal debt securities, and securitized debt instruments with that of public issue of equity shares and convertibles, it has been decided that individual investors applying in public issues of such securities through intermediaries (viz. syndicate members, registered stock brokers, registrar to an issue and transfer agent and depository participants) for amounts up to Rs. 5 Lakh, shall only use UPI for blocking of funds and provide his/ her bank account linked UPI ID in the bid-cum-application form submitted with intermediaries. These provisions shall apply to public issues of such securities opening on or after November 01, 2024.
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Enabling T+2 trading of Bonus shares Regulatory Updates
To streamline the process of Bonus issue of equity shares, it is decided to reduce the time taken for credit of bonus shares and trading of such shares, from the record date of the Bonus Issue under SEBI (ICDR) Regulations, 2018. The operational procedure to implement the same is provided in the Circular. This circular shall be applicable for all bonus issues announced on or after October 01, 2024.
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Modification in the timeline for submission of status regarding payment obligations to the stock exchanges by entities that have listed commercial paper
Prior to this amendment, Issuers of listed Commercial Paper were required to submit a certificate confirming fulfillment of its payment obligations within two days of payment becoming due. However, they shall now submit it within one working day of payment becoming due.
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Income Tax Updates
CBDT notifies ‘Auroville Foundation’ for the purpose of relief u/s 35 Regulatory Updates
The Central Board of Direct Taxes notifies the approval of ‘Auroville Foundation’ under the category ‘University, College or other Institution’ for research in social science or statistical research under sec 35 of the Income Tax Act, where any sum paid to such Institute for carrying out scientific research be eligible to claim a deduction of the amount equivalent to the amount contributed/paid.
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CBDT notifies Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024 Regulatory Updates
The CBDT has introduced rules and forms for the Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, effective October 1, 2024. Announced in the Union Budget 2024-25, the scheme offers reduced settlement costs for income tax disputes, especially for ‘new appellants’ or those filing before December 31, 2024. Four forms—Form-1 (declarations), Form-2 (certificates), Form-3 (payment), and Form-4 (settlement)—are available electronically, aiming to reduce litigation and expedite tax dispute resolution.
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CBDT notifies extension of timelines for filing Tax Audit Reports of AY 2024-25 Regulatory Updates
The CBDT has extended the deadline for submitting the tax audit report for AY 2024-25 to October 7, 2024. This extension applies to taxpayers for whom the original due date was September 30, 2024. The decision was made in response to challenges faced by taxpayers and other stakeholders in filing various reports under the Income Tax Act, of 1961. Regulatory Updates
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GST Updates
New Amendments to GST Act Regulatory Updates
The CBIC has notified several provisions through Notification No. 17/2024, dated September 27, 2024, as per notification the implementation dates for various sections of the Finance (No. 2) Act, 2024. Sections 118, 142, 148, and 150 come into effect from the date of the notification’s publication in the Official Gazette, while sections 114 to 117, 119 to 141, 143 to 147, 149, and 151 to 157 will take effect on November 1, 2024. This phased enforcement enables the gradual implementation of taxation and fiscal provisions of the Act.
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CBIC issues guidelines for advertising services provided to foreign clients Regulatory Updates
The CBIC has issued clarification on advertising services provided by Indian advertising agencies to foreign clients, as some authorities are treating the place of supply as within India, thus denying export benefits. To ensure consistency, the Board clarified that:
- Advertising Agencies as Intermediaries: If the advertising agency provides a one-stop service to the foreign client, it is not an “intermediary” under section 2(13) of the IGST Act. The place of supply is the foreign client’s location, meaning these services qualify as exports.
- Recipient of Services: The foreign client is considered the “recipient” of the services, not the target audience in India or a representative in India.
- Performance-Based Services: Advertising services do not fall under performance-based services as per section 13(3) of the IGST Act, as no physical presence of the recipient is required.
In cases where the advertising agency only facilitates media space procurement, it is considered an “intermediary” and the place of supply is deemed to be India, per section 13(8)(b) of the IGST Act.
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CBIC issues guidelines on availability of input tax credit in respect of demo vehicle Regulatory Updates
The clarification explains the availability of the Input Tax Credit (ITC) on demo vehicles under the CGST Act, 2017. ITC is allowed on demo vehicles, as they are used for further supply of similar motor vehicles, which promotes sales. However, ITC is blocked if the vehicles are used for other purposes, like staff transportation, or if the dealer is merely providing marketing services for the manufacturer without selling the vehicle. Capitalized demo vehicles qualify as capital goods, allowing ITC, unless depreciation on the tax component has been claimed. Upon sale of these vehicles, applicable tax provisions must be followed
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CBIC issued clarification on the Place of Supply of the data hosting service provider located in India Regulatory Updates
The clarification addresses the classification of data hosting services provided by Indian providers to overseas cloud computing companies under the IGST Act. Data hosting providers are not considered intermediaries, as they offer services on a principal-to-principal basis and do not facilitate transactions between cloud providers and end users. Additionally, data hosting services do not fall under the categories of “goods made available” or “immovable property,” so the place of supply is determined based on section 13(2) of the IGST Act. When provided to overseas clients, these services qualify as exports, subject to conditions of section 2(6) of the IGST Act.
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CBIC issued a clarification on the regularization of IGST Refund cases where exporters had imported certain inputs without payment of IGST & Cess Regulatory Updates
The CBIC clarified that in cases where inputs were initially imported without payment of Integrated Tax (IGST) and compensation cess by availing benefits under Notification No. 78/2017-Customs dated 13.10.2017 or Notification No. 79/2017-Customs dated 13.10.2017, but IGST and compensation cess are paid later along with interest, and the Bill of Entry is reassessed by the jurisdictional Customs authorities, the refund of IGST paid on exports of goods will not be considered a contravention of sub-rule (10) of rule 96 of the CGST Rules.
