The weekly messenger | Edition 11.19

Accounting News

FASB Clarifies Implementation Guidance and Disclosure Requirements in Leases Standard – 5 March 2019

The Financial Accounting Standard Board (FASB) has issued an Accounting Standard Update (ASU) No. 2019 – 01 – ‘Leases (Topic 842): Codification Improvements’ that addresses the following issues identified by stakeholders as they are prepared to implement the new lease standard:

• Determining the fair value of the underlying asset by lessors that are not manufacturers or dealers;
• Presentation on the statement of cash flows—sales-type and direct financing leases; and
• Transition disclosures related to Topic 250, Accounting Changes and Error Corrections.

For more information, click here.

Regulatory News

Companies (Incorporation) Second Amendment Rules, 2019 – 6 March 2019

The Central Government (CG) has amended the Companies (Incorporation) Rules, 2014 with the Companies (Incorporation) Second Amendment Rules, 2019, wherein it has made the following changes:

• In clause (a) of sub-rule (5) of Rule 30, ‘Shifting of Registered Office from One State or Union territory to Another State’, the words ‘with the widest circulation’ have been substituted with the words ‘with wide circulation’; and
• In Second proviso to sub rule (2) of Rule 38, ‘Simplified Proforma for Incorporating Company Electronically (SPICe)’ which states that “in case of companies incorporated, with effect from the 26th day of January, 2018, with a nominal capital of less than or equal to rupees ten lakhs or in respect of companies not having a share capital whose number of members as stated in the articles of association does not exceed twenty, fee on INC-32 (SPICe) shall not be applicable”, the limit of ₹ 10 lakhs has been increased to ₹ 15 lakhs w.e.f. 18 March 2019.

These rules shall come into force on the date of their publication in the official gazette i.e. 6 March 2019.
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Clarification on filing of e-form RD - 1 - Conversion of public company into private company and change in a Financial Year – 11 March 2019

The Ministry of Corporate Affairs (MCA) vide its Companies (Incorporation) (Fourth Amendment) Rules, 2018 has notified that the application under section 2(41) (change in a financial year) and under section 14 (conversion of public limited company into private company) of the Companies Act 2013, along with e-form RD-1 shall be processed by the Regional Directors. Now, since, the revised format of the e-form RD-1 has not been deployed on the MCA’s portal yet. Therefore, the MCA has issued a circular, whereby it has clarified and advised Regional Directors to process e-form RD-1, even if the company has selected ‘others’ category in point no. 3 of the aforesaid form which asks the companies to indicate the purpose of the application as the above two categories i.e. ‘change in financial year’ and ‘conversion of Public company into a private company’ are not there in the current version of the form.
 
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Re-Constitution of Insolvency Law Committee as Standing Committee for review of implementation of Insolvency & Bankruptcy Code, 2016 – 6 March 2019

 
The Government of India has decided to re - constitute the Insolvency Law Committee as standing committee for review of implementation of the Insolvency & Bankruptcy Code, 2016.
 
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Government enhances Income tax exemption limit w.r.t. Gratuity – 8 March 2019

The CG has raised the maximum exempted amount of any gratuity payable to employees under clause (iii) of clause (10) of section 10, ‘Incomes not included in total income’ of the Income Tax Act, 1961 from ₹ 10 lakhs to ₹ 20 lakhs in relation to the employees who retire or become incapacitated prior to such retirement or die on or after the 29 March 2018 or whose employment is terminated on or after the said date.
 
For more information, click here.
 

Further GST Updates

• For more information w.r.t implementation of various decisions taken by the GST Council for the MSME sector, click here;
• For more information w.r.t circular clarifying various doubts related to treatment of sales promotion scheme under GST, click here;
• For more information w.r.t superseding of notification No. 08/2017 - central Tax dated 27 June 2017 in order to extend the limit of threshold of aggregate turnover for availing Composition Scheme u/s 10 of the Central GST (CGST) Act, 2017 to Rs. 1.5 crores, click here;
• For more information w.r.t the due dates for furnishing of FORM GSTR-3B for the months of April, May and June, 2019, click here;
• For more information w.r.t the due dates for furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of more than Rs. 1.5 crores for the months of April, May and June, 2019, click here;
• For more information w.r.t due dates for furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover up to Rs. 1.5 crores for the months of April, May and June, 2019, click here;
• For more information w.r.t exemption from registration for any person engaged in exclusive supply of goods and whose aggregate turnover in the financial year does not exceed Rs 40 lakhs, click here;
• For more information w.r.t composition scheme for supplier of services with a tax rate of 6% having annual turnover in preceding year up to Rs 50 lakhs click, update 1 and update 2;
• For more information w.r.t exemption from registration for any person engaged in exclusive supply of goods and whose aggregate turnover in the financial year does not exceed Rs 40 lakhs, click here;
• For more information w.r.t clarification on nature of supply of Priority Sector Lending Certificates (PSLC) – regarding, click here; and
• For more information w.r.t removal of difficulty in implementation of Notification No. 2/2019- Central Tax (Rate) and Union Territory Tax (rate) - click, update 1 and update 2.