Corporate Updates: Analysis of latest amendments
Below are the regulatory updates as follows:
MCA
Amendment No. 1: Filing of DIR-3 KYC required on an annual basis:
It has been clarified by the MCA on 13th April, 2019 that DIN holders are required to file the DIR-3 KYC Form every year, so that they are aware of and confirm the data and information as available in the MCA21 system.
MCA has mentioned that the updated version of form is under process so that filings can be done by DIN holders in a simple and user friendly manner. The revised form, which will be shortly deployed, can be filed without any fee within a period of 30 days from the date of deployment.
Accordingly, DIN holders who had filed DIR-3 KYC form earlier and complied with the said provisions may kindly await the deployment of the modified form for fulfilling their compliance requirements.
Find below link of MCA circular for your ready reference.
http://www.mca.gov.in/Ministry/pdf/DIR3KYCcompleteMessage_13042019.pdf
Amendment No. 2: Mandatory filing of one time return in DPT -3 Form
As per Rule 16A(3) of the Companies (Acceptance of deposit) Rules, 2014 "every company (other than Government company) shall file with ROC a onetime return in Form DPT-3 for receipt of money/loan by a company but not considered as deposits outstanding from 1stApril, 2014 to the date of publication of notification in the official gazette (i.e., 22nd January, 2019) within 90 days from the date of publication of notification in the official gazette (i.e., by 22nd April, 2019).
However, vide a clarification of MCA dated 12th April, 2019, it has been clarified that pending the deployment of DPT-3 Form on MCA 21 portal, the additional fee shall be levied after 30 days from the date of deployment of the DPT- 3 form on MCA 21 portal.
It has also been stated that the data on deposits should be filed upto 31st March, 2019 (as opposed to 22nd January, 2019 which was originally indicated in the said notified Rule). To make it effective, the new Rule is being issued by the MCA separately.
Find below link of MCA circular for your ready reference.
http://www.mca.gov.in/Ministry/pdf/CircularDPT-3Form_12042019.pdf
Amendment No. 3: MCA has clarified that Filing of affidavits has been dispensed with vide the Companies (Amendment) Act, 2017 effective from 27th July 2018
Only declaration by first subscriber(s) and director(s) in INC-9 is mandatory and affidavit is NOT required to be filed. Stakeholders are requested to please note that Filing of affidavits (from each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles that he is not convicted of any offence in connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief) as per Section 7(1)(c) of the Companies Act, 2013 read with rule 15 of the Companies (Incorporation) Third Amendment Rules has been dispensed with vide the Companies (Amendment) Act, 2017- from 27th July 2018. Only declaration by first subscriber(s) and director(s) in INC-9 is mandatory and affidavit is NOT required to be filed. Stakeholders may kindly note the above provisions while filing SPICe forms for incorporation of Companies.
Find below link of MCA circular for your ready reference.
http://www.mca.gov.in/MinistryV2/homepage.html
LLP
Amendment: Whether LLPs can do manufacturing activities?
MCA has been restricting LLP to be incorporated with the manufacturing objects on the ground that manufacturing activities do not fall under the definition of “Business” as per the Limited Liability Partnership Act, 2008. Similarly, the conversion of private and unlisted companies into LLP has been restricted by MCA on the same ground. However, ICSI has submitted representation to MCA against the same giving various justifications including that the definition of business given under the LLP Act is inclusive in nature.
Find below link of circular for your ready reference.
https://www.icsi.edu/media/webmodules/Rep_LLP.pdf
SEBI
Amendment No. 1: 51 companies yet to appoint women independent directors to comply with SEBI guidelines:
SEBI in its board meeting held on 28th March, 2018 decided that the top 500 listed entities by market capitalisation should have at least one female independent director, on or before April 1, 2019. This is a move by SEBI to promote gender parity in the Indian Companies. But a reality check shows a different picture. As per the data compiled by Prime Database Group, India’s leading provider of data on capital market, 51 companies amongst these 500 listed entities have failed to comply with the rules set by SEBI and some of them also belong to the top 100 entities enlisted by market capitalisation by NSE. Eventually, 42 of the top 500 companies appointed an independent woman director only in the last week of March, i.e., 25th March, 2019 – 1st April, 2019, in spite of having close to a year’s time for the same.
Amendment No. 2: SEBI revises charges related to Basic Services Demat Account
Vide a circular dated 10th April, 2019, SEBI has decided to revise the structure of charges for debt securities held through Basic Services Demat Accounts (BSDA) from 1st June, 2019". For debt securities worth up to Rs. 1 lakh held through BSDA, there would no annual maintenance charge. A maximum charge of Rs. 100 would be levied if the value of holdings is above Rs. 1 lakh and up to Rs. 2 lakh. Currently, a uniform annual maintenance charge of Rs. 100 is levied on securities worth over Rs. 50,000 and up to Rs. 2 lakh irrespective of type of holding. There is no such charge for holdings valued up to Rs. 50,000. In 2012, SEBI directed depository participants to make BSDA available for retail individual investors as part of efforts to reduce the cost of maintaining securities in demat accounts. The move is expected to further boost participation of retail investors in the debt market. BSDA offers limited services at a lower cost for retail investors.
Find below link of circular for your ready reference.
https://www.sebi.gov.in/legal/circulars/apr-2019/separate-bsda-limit-for-debt-segment_42667.html
Amendment No. 3: SEBI issued procedure and formats for limited review and audit reports:
On 9 May 2018, the Securities and Exchange Board of India (SEBI) amended its Listing Regulations and specified that the statutory auditor (principal auditor) of the listed entities would be required to undertake a limited review of the audit of all the entities/companies whose accounts are to be consolidated with the listed entity as per Accounting Standard (AS) 21, Consolidated Financial Statements. This said provisions are applicable from 1 April 2019. However, the term ‘limited review of the audit’ has been a subject of multiple interpretations as there was lack of clarity on the level of procedures to be performed by the principal auditor in the case of a group audit. Additionally, it was unclear on how this requirement was aligned to the existing guidance for auditors included in SA 600, using the work of another Auditor and the principles set out in the Guidance Note on Audit of Consolidated Financial Statements(Revised 2016) issued by the Institute of Chartered Accountants of India’s (ICAI).
Now, SEBI through its circular dated 29 March 2019 prescribed the procedure and formats for limited review report and audit report of the listed entity and its components. The revised procedure and formats would be required to be followed by the statutory auditors of such entities. These procedures are applicable from 1st April 2019.
Find below link of circular for your ready reference.
RERA
Amendment No. 1: Gujarat RERA fined over 300 developers:
Under the Real Estate (Regulation and Development) Act, 2016, more than 300 real estate projects across Gujarat have been penalized by the Gujarat Real Estate Regulatory Authority for missing to file the compulsory quarterly progress reports over the last 9 months. In most cases, the regulatory authority has fined each fraudulent developer Rs.50,000. The process of submission of Quarterly reports started in June 2018. Since then, various developers have been punished for non-compliance, under sections 11 and 63 of RERA Act. Although the fine for breach of Section 63 of the act can go up to 5% of the project cost, in most cases the fine was fixed at Rs.50000, to assure compliance.
It is given that there are 5219 real estate projects registered with the authority and only 300 or so have been observed to be non-compliant. These numbers indicate that the level of compliance in the state is pretty high
Find below link of circular for your ready reference.
http://www.rerafiling.com/rera-news/others/1089/rera-penalizes-300-developers-in-gujarat
CBDT
CBDT with an intent to give effect to the Judgement(s)/order(s) of Hon'ble Supreme Court on Aadhaar-PAN for filing return of income, has mandated to quote Aadhaar while filing the return of income:
Unless specifically exempted as per any notification issued under sub-section (3) of section 139AA of the Act. Thus, returns being filed either electronically or manually cannot be filed without quoting the Aadhaar number. Further, CBDT has extended the last date of linkage of Aadhaar & PAN to 30-09-2019 from 31-03-2019; however, it is mandatory to quote the Aadhaar on every return of income filed for the AY 2019-20.
Income Tax Department has notified the Income Tax Return Form for Individuals and Companies for assessment year 2019-20 (FY 2018-19)
The new ITR forms in PDF format are available. However, the excel utilities (or) Java Utilities for AY 2019-20 will soon be made available on E-filing website. There has been no change in the ITR-1 form, although some sections in ITR 2,3,5,6 and 7 have been made more rational. Individuals, firms and companies will have to file returns for the earned income during current financial year 2018-19.
https://www.pwc.in/assets/pdfs/news-alert-tax/2019/pwc_news_alert_6_april_2019_income_tax_forms.pdf
CBIC
The Central Board of Indirect Taxes and Customs clarifies that applicability of Notification No. 02/2019-Central Tax (Rate) dated March 07,2019 which prescribes the rate of central tax of 3% on first supplies of goods or services or both upto an aggregate turnover of fifty lakh rupees made on or after the 1st day of April in any financial year, by a registered person whose aggregate annual turnover in the preceding financial year was fifty lakh rupees or below. A registered person who wants to opt for payment of central tax @ 3% by availing the benefit of the said notification, may do so by filing intimation in the manner specified in sub-rule 3 of rule 3 of the said rules in FORM GST CMP-02. Any person who applies for registration and who wants to opt for payment of central tax @ 3% by availing the benefit of the said notification, if eligible, may do so by indicating the option at serial no. 5 and 6.1(iii) of FORM GST REG-01 at the time of filing of application for registration. Further, the option of payment of tax by availing the benefit shall be applicable from the beginning of the financial year or from the date of registration in cases where new registration has been obtained during the financial year.
CBIC extends the due date for furnishing FORM GSTR-1 for taxpayers having aggregate turnover more than Rs. 1.5 crores for the month of March, 2019 from 11.04.2019 to 13.04.2019.
https://cbec-gst.gov.in/pdf/central-tax/notfctn-17-central-tax-english-2019.pdf
Further, CBIC also extended the due date for furnishing FORM GSTR-7 for the month of March, 2019 from 10.04.2019 to 12.04.2019. GSTR 7 is a return form under GST for all the taxpayers who account all the tax deducted at source.
https://cbec-gst.gov.in/pdf/central-tax/notfctn-18-central-tax-english-2019.pdf
DISCLAIMER- This write-up is based on the understanding and interpretation of author and the same is not intended to be a professional advice.
Regards,
Shubham Katyal
ACS, B.COM
Secretarial and Legal Consultant
+91-7669997669/8439727273
