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NEWSLETTER –APRIL 2014
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INDEX
• Direct Taxation
• Indirect Taxation
• Corporate and Other Laws
• International Trade and Finance
• Statutory Due Dates for April 2014
Newsletter –April 2014
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DIRECT TAXATION Index
• CBDT clarifies key rule related to TDS on overseas paymentsThe Central Board of Direct Taxes has clarified to field officers that the requirement of deducting tax at source when a person makes payments to non-residents or foreign companies should be enforced only on that part of the remitted amount that accounts for the recipient's income chargeable to tax in India. The Board also told the officers that the amount chargeable to tax in India could be determined by the income component in the total payment made, the nature of remittance and any other relevant information. The clarification comes after field officers sought clarity on the issue.
• Tax payers to get Digital IDs for e-filing returnsIn order to weed out the hassle of sending by post a hard copy of e-filed return, the income tax department has decided to bring in the facility of electronic signatures for taxpayers to endorse their bonafides. The Central Board of Direct Taxes (CBDT), the apex office to formulate policies for the income-tax department, has decided to implement the new mechanism by the end of the next financial year, in March 2015. Official sources told that the CBDT will get in touch with the Union ministries of law and communications and information technology to establish the legal position and technology requirements, respectively before it operationalises the new protocols for the e-returns called ITRV.
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Newsletter – April 2014
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INDIRECT TAXATION Index
• Eye on higher excise mop-up, CBEC gives more powers to commissionersIn a last-ditch attempt to shore up faltering excise duty collection, the Central Bureau of Excise and Customs (CBEC) has empowered chief commissioners to act tough on manufacturers and dealers evading duty payment and abusing duty credit facilities. The new provisions, notified on March 21, expose producers evading excise payments to the threat of losing Cenvat credit facility and the monthly payment option. They, instead, will be allowed to clear consignments out of factories or warehouses only on production of duty payment receipts countersigned by an inspector or Superintendent.
Newsletter – April 2014
CORPORATE AND OTHER LAWS Index
•Amended Company Law to take effect from 1st April 2014 The Ministry of Corporate Affairs has started implementation of the Companies Act 2013, in a phased
manner. In the process, MCA has notified vide notification dated 26.03.2014, that 183 sections of Companies Act,2013 will be effective from 1st April 2014. MCA has also notified vide its notification dated 27 Feb 2014 that Section 135 of the Companies Act,2013 related to Corporate Social Responsibility (CSR) to come into effect from 01.04.2014.
• CIN to be mentioned in letter heads, invoicesSection 12(3)(c) of Companies Act 2013, which will be effective from 1.4.2014, provides that
every company shall get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications.
•Relaxes norms for Related party disclosureUnder the new rules, the definition of related party covers directors and key managerial personnel
only in relation to the company concerned and its holding company; it excludes functional heads of subsidiaries and associate companies. In another departure, the definition of a relative under related-party transaction
Newsletter – April 2014
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CORPORATE AND OTHER LAWS Index
covers eight relationships, against 15 in the draft rules. These changes will reduce the volume of transactions under the related-party category.Another issue that ruffled many feathers in corporate circles, restrictions on issue of loans and guarantees to wholly-owned subsidiaries, has been done away with. Rules relating to guarantees given by a holding company to a bank or financial institution for a loan taken by any subsidiary have been relaxed.
•Corporate Social Responsibility , Section 135Corporate Social Responsibility (CSR) is attracting the attention of every Company and stakeholders. Company Law has made it mandatory for certain companies to spend 2% of average net profits of 3 preceding financial years. Many companies consider CSR activities as philanthropic act towards society and do not want the Government to exert pressure on them to spend compulsorily 2% of average net profits of preceding 3 financial years.
•ROC forms to be processed by respective ROC/RD/Central Government officials wef 25th March 2014
MCA has notified that w.e.f. 25.03.2014 ‘All forms under RSUB/PUCL would be marked back to respective officials of the ROC/RD/Central Government as the case may be starting midnight 25 Mar 14.
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Newsletter – April 2014
CORPORATE AND OTHER LAWS Index
The forms would be processed by the respective officials. However, “Form FTE”, “Form EES2010”, “Form EES2011”, “Refund Form”, Investor Complaint Form” and all LLP forms” would continue to be allowed for filing under RSUB/PUCL.
•MCA enables online payment of Stamp Duty for issue of certified copiesMCA has reviewed the process of issue of certified true copies of the documents filed with ROC.
With a view to identify and improve the component causing delay in issuance of certified copy, the Ministry has enabled the payment of Stamp Duty as well as court fees online throgh MCA portal.
•MCA 21 efiling services to be suspended from April 1-13The Corporate Affairs Ministry has decided to temporarily suspend, from April 1-13, e-filing service under MCA-21. This is intended to facilitate smooth transition to the new company law, sources close to the development said.The MCA-21 portal is the electronic backbone for dissemination of information to all stakeholders, including the regulator, corporates and investors.In the April 1-13 period, all the new forms are expected to be uploaded so that they can be used by the business community under the new company law regime.
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Newsletter – April 2014
CORPORATE AND OTHER LAWS Index
•Companies Rules 2014
The Ministry of Corporate Affairs notified various rules keeping in view the implementation of Companies Act 2013. These rules are notified in the Gazette and majority of them will take effect from last week of March 2014.
Some such rules are, Investors Education and Protection Fund Rules, Rules related to formation of company, Companies Prospectus and allotment of securities Rules, Companies rules for shares, debentures , Companies rules for registration of charges, Rules for declaration and payment of dividend , company management and administration, Company Accounts , Appointment and qualification of directors, Board Meetings and powers of Board, Appointment and remuneration of managerial personnel Rules etc.
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Newsletter – April 2014
INTERNATIONAL TRDAE AND FINANCE Index
•India , US to intensify cooperation in tax evasion casesIndia and the United States have decided to enhance cooperation for automatic exchange of information on tax evasion and detection of financial crimes, shoring up efforts to crackdown on blackmoney cases involving economic channels of the two countries. A team of the US Treasury officials recently met Indian Income Tax and CBDT officials for negotiating an Inter-Governmental Agreement (IGA) which will enable faster access to tax evasion related information and tax crimes by individuals and entities of the two countries.
•Indian Government to rewrite BIPAIndia has readied a new draft to negotiate bilateral investment treaties in the future, keeping taxation and intellectual property right issues out of its ambit. The new draft for bilateral investment promotion agreements (BIPA) draws on the learning from the ongoing tax dispute with British telecom firm Vodafone and an adverse ruling in an arbitration case against Australian firm White Industries two years ago.
•Multinationals rush to seal the tax pacts in advanceMultinational companies have rushed to hammer out agreements that lock in their tax liabilities in India for
the next five years through the Advance Pricing Agreement programme, putting behind their outrage over what's been perceived as the government's aggressive tax practices. More than 240 companies have signed up for APAs for the next fiscal even before the first one is signed on Monday in a bid to avoid being saddled with
demands that inevitably lead to long-drawn disputes. Newsletter – April 2014
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STATUTORY DUE DATES FOR APRIL 2014 Index
•Statutory Due Dates Calendar for April 2014
Newsletter – April 2014
Due Date Statutory Compliance
5th April 2014 Payment of Service Tax/ Excise duty
15th April 2014 Payment of Provident Fund contribution/ Profession Tax
21st April 2014 Payment of ESIC/ MVAT
25th April 2014 Filing of Service tax Return
30th April 2014 Payment of TDS
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Newsletter –April 2014
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