CA Online

The formation of the National Company Law Tribunal ( NCLT) on June 1, 2016, marked a decade- long attempt to overhaul company law litigation in India. NCLT President M M Kumar struck an optimistic note while speaking at a recent public function, highlighting the new approach of the tribunal. However, considering the large increase in workload, infrastructure and manpower constraints continue to remain the tribunal’s Achilles’ heel. Kumar said the crux of the changed approach lay in Section 422 of the Companies Act, 2013, which mandates three months for the completion of proceedings, extendable by 90 days. There was no such guidance for the functioning of the erstwhile Company Law Board ( CLB). The CLB had gained notoriety in the past for its laggard approach towards proceedings, leading to long- drawn disputes. Even after constitution of the NCLT, many were sceptical of its eventual efficacy. The lack of underlying rules of procedure led cynics to believe the tribunal was just ...

With an average annualised return of 10 per cent, income fund investors have had a couple of good years. However, considering that Consumer Price Index- based inflation is currently closer to the upper end of the Reserve Bank of India’s (RBI’s) target and the new governor is likely to continue to keep a focus on inflation, we might not see an interest rate cut any time soon. It may be recalled that after Raghuram Rajan’s decision to quit RBI, the bond market witnessed a smart rally on expectations that the new governor might cut rates faster. However, as became evident after the announcement of Urjit Patel’s appointment that there might not be a significant change in RBI’s monetary policy stance, the bond market witnessed some selloff. Leaving investors with the dilemma of whether the current scenario warrants a realigning their debt fund portfolio. Although the current scenario doesn’t appear favourable to the short- term prospects of income funds, investors will do well not t...

Eager to meet the April 1 target to rollout the landmark Goods and Services Tax( GST), the government might advance the winter session of Parliament by a fortnight to get supporting legislations passed,giving sufficient time for implementation of the new indirect tax regime.The winter session is normally convened in the third or four th week of November. The government is looking at starting the month- longsessionimmediately after the festive season. Business Standard New Delhi,29th August 2016

Ind-AS, the new accounting standards that came into effect from April 1, might squeeze the revenues of fast moving consumer goods (FMCG) companies by up to eight per cent in 2016-17. The key cause is deduction of sales promotion expenditure from the revenue figure, hitherto part of the profit & loss (P&L) statement under the earlier IGAAP accounting norms. In the just-concluded June quarter, for instance, the top line of the country's largest consumer goods company, Hindustan Unilever (HUL), was affected by 2.6 per cent or Rs 214 crore under Ind-AS. Godrej Consumer Products’ revenue was squeezed 10.4 per cent. Sunil Duggal, chief executive, Dabur India, said six to seven per cent of its FY17  revenue would be hit. “Some part of promotional expenditure, mainly below-line expenses, will be deducted from revenue,  expected to be around Rs 600 crore,” he said. Vivek Karve, chief financial officer, Marico, said: “On an annualised basis, sales will get restated downw...

Aturf battle is brewing between Indian audit companies and those owned by global audit and accounting networks, as the government pushes for opening up of accounting services. Small and midsize chartered accountancy ( CA) entities feel the most threatened by this move. Questions are being raised on issues around reciprocity, visa restrictions and non- recognition of Indian audit certificates in other jurisdictions. CAs working with international audit agencies say the move will improve India’s bargaining position in global markets on export of services. It started with a note sent earlier this month by the Union ministry of corporate affairs to The Institute of Chartered Accountants of India ( ICAI), regulatory body for auditing professionals. The ministry sought the institute’s views on allowing foreign auditors to practice directly in the country, and to use their own brand name while attesting financial statements. Currently, global audit companies operate in the country t...

www.caonline.in News... 1. SEBI relaxes restrictions on more than 200 entities, which were barred from the securities market in three different cases including permission, to deal in government securities and invest in ETF. 2. No cancellation of trust’s registration just because its main income was from interest and miscellaneous receipt. 3. New Automation Process for Filing of MVAT and CST Returns has been issued under circular no. 22T of 2016. 4. Under GST; TDS @ 1% will be applicable on notified supplies for contracts exceeding Rs. 10 lacs in value. TDS deposit by 10th of next month. 5. No tax on income from offshore supplies as supplier had no agency PE in India.

The government wants to fully insulate the goods and services tax (GST) technology backbone from hackers, amid growing risks of cyber-criminals misusing confidential information on transactions worth thousands of crores of rupees. Revenue secretary Hashmukh Adhia, who is overseeing the groundwork for implementing GST, told a group of banks, GSTN, Central bank and tax officials to plug all gaps on potential cyber-fraud and sabotage and get the IT backbone ready by September 30. GSTN — GST Network—has been tasked with creating a robust IT backbone to enable real-time taxpayer registration, filing returns, handle invoices, execute inter-state tax settlements, and connect states for twoway data flow for GST. The government expects about 3 billion transactions to take place every month through the network after GST kicks in. The tech network will be tested through a string of simulated dry runs before the new GST’s expected roll-out from April 1, 2017. These simulated exercises wi...

Government employees recruited after January 2004 would also be entitled to receive gratuity on retirement or death while in service, the Modi government decided on Friday. The Centre and many state governments switched to the new pension scheme from January 1, 2004, that required employees to contribute 10% of their monthly salary towards their pension with a matching contribution from the government. Some states, except West Bengal and Tripura, joined later. More than 300,000 central government employees recruited after 2004 are covered by the NPS. The Seventh Pay Commission had lamented that many of them might not have enough money in their pension fund at retirement due to the government’s inability to firm up the rules of the game on time. Employees covered by the National Pension Scheme (NPS) were not entitled to any additional benefits other than the government’s contribution to their pension fund. But it had been argued that this was unfair since the NPS only replaced t...

The finance ministry has set up a panel, led by former finance secretary Ratan Watal, to suggest steps to reduce cash transactions to promote card payments through incentives such as tax rebates and cash back schemes. The 11-member high-level panel has been tasked with reviewing the payment system in the country and suggest measures for encouraging digital payments. The panel will suggest various measures to “incentivise transactions through cards and digital means, for example, through tax rebates/incentives, introduction of cash back/lottery,” the ministry in a notification on its website. Other members of the panel include former Reserve Bank of India (RBI) deputy governor H R Khan, secretary, or a nominee, from the Department of Investment and Public Asset Management, heads of banking, technology and payments system industry bodies, and chairperson of the Central Board of Direct Taxes, among others. The panel has been asked to submit its report in one year. Business Standar...

The West Bengal government has temporarily shelved plans to discuss the GST Constitution Amendment Bill in a special West Bengal Assembly session on August 29th. “We need time to discuss GST amongst ourselves,” West Bengal Parliamentary Affairs Minister Partha Chatterjee told Business Standard. However, he added the state has no stated objection to any of the clauses of GST. Business Standard New Delhi,27th August 2016

The Reserve Bank of India’s (RBI) proposal to let listed Indian companies lend short-term money to banks could have ramifications for lenders’ current and savings account (Casa) portfolio, which banks ride on as a cheap source of funds. And, in a liquidity-deficit scenario, call money rates can also get influenced by corporates chipping in with their surplus funds. So far, companies could lend to banks for a minimum of seven-day tenure money. This, according to RBI, “constrains their participation”. So, it has proposed that such companies be allowed “to lend through the repo market, without any tenor or counterparty restrictions”. On Thursday, RBI said it was proposing that listed companies lend and borrow funds under repo for periods less than seven days, including overnight, and that unlisted companies only borrow under repos specifically against the collateral of special securities issued to them by the Government of India. “This will help improve liquidity by adding an ...