Hi Folks
Since the time Modi Government has taken charge, lot of sweeping changes have been introduced. Some have swept people off their feet, some have swept the opposition off their seats and dumped them into oblivion, some have shaken the bureaucracy out of their slumber, some have stirred the imagination of young minds and propelled them into entrepreneurship, some have wiped off several of their ill-gotten wealth, some have turned currencies into worthless papers, some are wiping off complicated tax laws and ushering in one-nation, one-tax regime. However the biggest change has been the Demonetisation Drive intended to wipe out the black money economy. Several initiatives are being taken in this regard. Some very evident while some are not so. One of them is the spate of notices issued by the Registrar of Companies and IT department. Nearly 10 lac companies have received closure notices for failing to file audited accounts and annual returns. ROCs are invoking their power to strike off the names of such companies as defunct and take action against the directors if they do not hear from them within 30 days. Similarly 4 lac companies have received de-registration notices from IT department for not filing returns. As businessmen, one cannot take it easy and file the returns only when the Chartered Accountant reminds or one needs some funding. The message is clear. If you are doing business genuinely and complying with the rules, you exist. Else, you shall be wiped out. This is basically targeted at shell companies set up to launder money as well as clean lot of ‘dead wood’ companies which are defunct and a burden on the regulatory function. Those of you who have set up companies and LLPs and have either forgotten them as ‘lost love’ or are complacent that you can ‘file when asked for’, wake up ! Take notice and act. Government means business. You will not only lose the entity but also be liable for prosecution for non-compliance. What bigger cleanliness drive than this under ‘Swachh Bharath Abhiyaan’ !
You will find above such news and more in this 166th issue of Lexspeak. Should you wish to refer to any of our older issues of LexSpeak, do visit our Resource Centre at  www.lexvalorem.com.

Warm regards

Provisions relating to Related Party Transactions have been modified, which provides that a Company shall not enter into following type of transactions, without the previous approval of shareholders:
  • Sale, purchase or supply of any goods or materials, whether directly or through any agents- amounting to ten per cent or more of the turnover of the company or rupees one hundred crore, whichever is lower.
  • Selling or otherwise disposing of or buying property of any kind, directly or through any agent- amounting to ten per cent or more of net worth of the company or rupees one hundred crore, whichever is lower.
  • Leasing of property of any kind – ten per cent or more ofturnover of the company or rupees one hundred crore, whichever is lower.
  • Availing and rendering of any kind of services, directly or through appointment of agent – amounting to ten per cent or more of the turnover of the company or rupees fifty crore, whichever is lower.
Earlier it read as "Exceeding ten per cent" .
Schedule III of the Act provides instructions for preparation of the balance sheet and statement of profit and loss of a Company. Every Company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 as per the new formats prescribed in the Schedule. This is a Demonetization impact.
Consequently, Auditor’s Report shall also include their views and comments on whether the Company has made requisite disclosures relating to the SBN, and whether they are in accordance with the books of accounts maintained by the Company.
Where the ROC intends to strike off the name of a defunct Company from the Register, he shall issue a public notice in Form STK 5A.’’
This section provides a deduction of 30% of the ‘additional employee cost’ incurred by assesses to whom the provisions of tax audit applies, subject to certain conditions. The form for making this claim is Form 10DA which has now been amended.
The deadline for obtaining and providing the Income Tax PAN to a bank if it was not provided at the time of opening such account has been extended to 30th June 2017 as against 28th Feb 2017 as per the earlier rule. This applies to accounts other than (i) basic savings deposit account and (ii) to a time deposit account with a deposit of less than Rs. 50,000 per transaction or Rs. 5 lakhs in the aggregate during a financial year.
Section 269ST introduced by Finance Act 2017 prohibits receipt of cash in excess of Rs. 2 lakhs or more. Contravention provides a penalty equal to the amount received. However, CBDT notification states that these provisions do not apply to receipt of cash in excess of the aforesaid limit from any banking company, post office or co-operative bank.
Hon’ble President, Mr. Pranab Mukherjee, has given his assent to the four key Goods and Services Tax (“GST”) Bills on 12th April 2017, after they were passed by the Parliament. The four GST Bills enacted are as under:
  • The Central Goods and Services Tax Act, 2017
  • The Integrated Goods and Services Tax Act, 2017
  • The Goods and Services Tax ( Compensation to states) Act, 2017
  • The Union Territory Goods and Services Tax Act, 2017.
These bills were passed by the Lok Sabha on March 29, 2017 and Rajya Sabha on April 6, 2017.
The State Governments need to pass the State GST Bill. Further, the decisions regarding bringing the real estate sector and petroleum products under GST is expected to be taken up in the coming weeks.
 
Note: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. Lex Valorem disclaims all liability on action taken without professional advice.
 
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www.lexvalorem.com Phone : +91 80 25534374 , +91 80 25536618 Email: sharada.sc@sharadasc.com
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