The weekly messenger | Edition 09.19

Accounting News

ICAI issues publication on Valuation: Professionals’ Insight – Series 2 – 22 February 2019

The Valuation Standards Board of the Institute of Chartered Accountants of India (ICAI) together with the ICAI’s Registered Valuers Organisation has issued the Second Series of the publication – ‘Valuation: Professionals’ Insights’ covering certain practical insights on valuation. This publication is a compilation of diverse valuation topics authored by leaders in the profession. The purpose of issuing this publication is to:

• advance knowledge and understanding of the professional practices; 
• provide an overview of the valuation involved in mergers, amalgamation, options, business, case studies by compiling articles.

 For more information, click here. 

Regulatory News

NFRA (Manner of Appointment and other Terms and Conditions of Service of Chairperson and Members) Amendment Rules, 2019 – 18 February 2019

The Central Government (CG) has amended the National Financial Reporting Authority (NFRA) (Manner of Appointment and other Terms and Conditions of Service of Chairperson and Members) Rules, 2018 with the NFRA (Manner of Appointment and other Terms and Conditions of Service of Chairperson and Members) Amendment Rules, 2019, wherein in sub – rule (5) of Rule 4 ‘Manner of Appointment’, earlier there was a requirement that the search – cum - selection committee was required to make its recommendation for appointment of chairperson or the members to the CG within a period not exceeding  120 days from the date of reference made to it by the CG. Now, words ‘period not exceeding 120 days’ have been replaced with the words ‘reasonable period of time’.
 
These rules shall come into effect w.e.f. 18 February 2019
 
For more information, click here.

The CG has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014 with the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2019, wherein in Form PAS – 3, in serial no. 6 in item (b), the words “not allotted securities with an application size of less than twenty thousand per person” against the second check box has been omitted.
These rules shall come into effect w.e.f. 19 February 2019.
For more information, click here.

Companies (Adjudication of Penalties) Amendment Rules, 2019 – 19 February 2019

The CG has amended the Companies (Adjudication of Penalties) Rules, 2014 with the Companies (Adjudication of Penalties) Amendment Rules, 2019, wherein the erstwhile Rule 3 ‘Adjudication of Penalties’ has been substituted with a new rule.
 
These rules shall come into effect w.e.f. 19 February 2019.
 
For more information, click here.

Companies (Incorporation) Amendment Rules, 2019 – 21 February 2019

The CG has amended the Companies (Incorporation) Rules, 2014 with the Companies (Incorporation) Amendment Rules, 2019, wherein it has introduced a new e-form ‘ACTIVE (Active Company Tagging Identities and Verification) (INC-22A)’, thereby requiring every company incorporated on or before 31 December 2017 to file the particulars of the company and its registered office in the aforesaid form on or before 25 April 2019 subject to fulfilment of certain terms and conditions.   
 
For more information, click here.

Companies (Registration Offices and Fees) Amendment Rules, 2019 – 21 February 2019

The CG has amended the Companies (Registration Offices and Fess) Rules, 2014 with the Companies (Registration Offices and Fees) Amendment Rules, 2019, wherein the CG has added the details of the fees to be paid by the companies for the purpose of filing of e-form ACTIVE.   
 
These rules shall come into effect w.e.f. 25 February 2019.
 
For more information, click here.

Extension of last date of filing of initial return in MSME Form I – 21 February 2019

The Ministry of Corporate Affairs (MCA), pending the deployment of MSME Form I on the MCA portal has decided to extend the last date for filing of the initial return to be filed by the specified class of companies (i.e. the companies, who get supplies of goods and services from micro and small enterprises and whose payments to those suppliers exceed 45 days from the date of acceptance/ deemed acceptance of the goods or services as per the provisions of Section 9 of the Micro, Small and Medium Enterprises (MSME) Development Act), which would now be 30 days from the date of deployment of the said form on MCA portal.
 
For more information, click here.

Companies (Amendment) Second Ordinance, 2019 – 21 February 2019

 
The Ministry of Law and Justice has issued the Companies (Amendment) Ordinance 2018 in November 2018, which is to be replaced by the Companies (Amendment) Bill, 2019 which is yet to be passed in the Council of States. Therefore, in order to give continued effect to the provisions of the Companies (Amendment) Ordinance 2018, the government has issued the Companies (Amendment) Ordinance 2019 in January 2019 and now the Companies (Amendment) Second Ordinance 2019 respectively.
 
For more information, click here.

MSME sector – Restructuring of Advances – 22 February 2019

In order to facilitate meaningful restructuring of MSMEs accounts that have become stressed, the Reserve Bank of India (RBI) issued a circular on 1 January 2019, wherein it has decided to permit one-time restructuring of existing loans to MSMEs classified as ‘standard’ without a downgrade in the asset classification, subject to certain conditions, wherein one of the condition was that the borrowing entity should be Goods and Services Tax (GST) - registered on the date of implementation of the restructuring. However, this condition will not apply to MSMEs that are exempt from GST-registration. Now, the RBI has clarified that eligibility for restructuring without GST-registration, should be determined on the basis of exemption limit obtaining as on the date of the aforesaid circular, i.e. 1 January 2019.
 
For more information, click here.

Harmonisation of different categories of NBFCs – 22 February 2019

The RBI in order to provide Non - Banking Financial Companies (NBFCs) with greater operational flexibility, has decided to merge the three categories of NBFCs viz. Asset Finance Companies, Loan Companies and Investment Companies into a new category called NBFC – Investment and Credit Company (NBFC – ICC).  Therefore, different regulations relating to bank’s exposure to the aforesaid three categories stand harmonised.
 
For more information, click here.

BSE extends XBRL mode for listed companies to file their Annual Reports on the Exchange – 18 February 2019

The Bombay Stock Exchange (BSE) has extended the XBRL taxonomy published by the MCA, for filing of Annual Reports by the listed companies for the financial year ending 31 March 2019. This requirement would be in addition to the currently available PDF mode, which the companies are required to file with the Exchange along with notice of AGM.
For more information, click here.

Government simplifies the process for startups to provide relief from Angel Tax – 19 February 2019

The Department for Promotion of Industry and Internal Trade has issued amendments in the definition of ‘startup’ and has also provided certain relaxations w.r.t. the conditions and procedure for availing an exemption from angel tax. The broad changes are as follows:

• The time limit for the purpose of consideration of a start up company has been increased from 7 to 10 years;
• The turnover limit has been revised from ₹25 crore to ₹100 crore;
• Considerations of shares received by eligible startups for shares issued or proposed to be issued by all investors shall be exempt up to an aggregate limit of Rs 25 crore for the purpose of clause (viib) of Section 56(2) of the Income Tax Act, 1961 etc. 

For more information, click here.

The Banning of Unregulated Deposit Schemes Ordinance, 2019 – 21 February 2019

The Ministry of Law and Justice has passed ‘the Banning of Unregulated Deposit Schemes Ordinance, 2019’, which proposes to tackle the deposit taking activities in the country which is launched by greedy operators. However, the aforesaid Ordinance does not prohibit those deposits which are regulated by law such as chit funds.
 
For more information, click here.

Further GST Updates

The Central Board of Indirect Taxes and Customs has issued certain updates w.r.t. GST whose links are as follows: 

• For more information w.r.t. the extension of the due date for furnishing FORM GSTR - 3B for the month of January 2019 to 28 February 2019 for registered persons having principal place of business in the state of J&K and 22 February 2019 for the rest of the states, click here;
• For more information w.r.t clarification regarding tax payment made for supply of warehoused goods while being deposited in a customs bonded warehouse for the period July 2017 to March 2018, click here;
• For more information w.r.t clarification on situations of compliance of rule 46(n) of the CGST Rules, 2017 while issuing invoices in case of inter- State supply, click here;  and 
• For more information w.r.t clarification on situations of mentioning details of inter-State supplies made to unregistered persons in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR-1, click here