Reconciliation of GST

First Achievement of Zappy

It gives me immense pleasure to inform that I have been conferred as Indian Achievers’ Award for Business Excellence by Indian Achievers’ Forum at 46th National Summit on Startups and Women Entrepreneurship. This is the first achievement of Zappy at it’s young age of 3 years. This achievement being a stepping stone, we would maintain and improve our high quality service standards in timely manner.

Reconciliation of GST invoices vs GSTR-2A is a challenge to all GST practitioners. In this edition we will be discussing about the Reconciliation of GST article provided by CS Renu Wadekar, Practicing Company Secretary from Gandhinagar, Gujarat. Our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST.

Saranya Deivasigamani,
CEO

Reconciliation of GST

Goods & Service Tax (GST) returns and process has been designed in order to harmonise the data filed by the supplier with those of the recipients by allowing the recipients to avail Input Tax Credits only when the tax is paid and returns filed by the supplier. This will infuse a pressure from the recipient to the supplier for payment of tax and returns in time so they can avail their credit in time.

To ensure that all the available input tax credit are in place, the reconciliation process will help the recipient. The reconciliation process will make sure that no sales or purchases are omitted or wrongly reported in the GST returns.

The taxpayers must reconcile their data on a regular basis with that of the vendors to claim eligible Input Tax Credit (ITC). The process of reconciliation is simple, but can be time-consuming, especially when there are more vendors and more invoices to reconciles. The taxpayers are required to continuously keep an eye on any discrepancy or mismatches that may affect the ITC claim.

In this article we will see 5 simple steps involved in Reconciliation Process.

1. First ever step in the process is to comply with the GST provisions by filing all required returns periodically. Even if the due date for a particular GST return is missed, it should be filed along with the interest or the late fees as applicable. As long as the GST returns are not filed, matching and reconciliation process will not take off. The taxpayers need to update their books of accounts and align the tax returns accordingly. Unless and until all the GST returns are filed, the taxpayers won’t be able to claim adequate ITC.

2. To Reconcile GST invoices, the taxpayers must list down all the invoices from their books of accounts probably in an excel sheet clearly mentioning: GSTIN of supplier, Name of Supplier, Date of Invoice, Invoice Number, Invoice Type, Place of Supply, Rate, Taxable Value, Invoice Value, Tax Amount (separately for CGST, SGST, IGST and Cess). Furthermore, the taxpayers shall download GSTR 2A from GST portal which will provide all the above mentioned details in excel or JSON format (which can later be converted to excel).

The taxpayers shall run a quick search among these 2 excels and identify the mismatches and correct the relevant entries in the books of accounts. They should also amend these details in the coming GST return filing period. GST laws do not allow for revision of tax returns filed in the previous periods. However, it does allow for filing of the corrected entries via an amendment return in the next periodic return. These amendment entries should be filed in GSTR 1 & GSTR 3B, accordingly.

The taxpayers should make sure that the purchase register is matched with books of accounts, GSTR 2A and GSTR 3B details. When there are any mismatch in GSTR 2A and the books of accounts of the taxpayers, they should approach the supplier and follow up with them to pay the tax and submit their returns in time. It is important to streamline the books of accounts, the GSTR-3B return, and GSTR-2A form to fully avail the ITC on the relevant purchases; otherwise, the taxpayer will lose ITC claim and will end up paying extra taxes.

3. The congruity between the books of accounts and the GST returns is crucial for claiming ITC. The taxpayer will be eligible to claim ITC of only to the extent of the GST paid and returns submitted by the vendor. Additionally, taxpayers while claiming ITC on purchases should keep a check on taxes paid under the reverse charge mechanism. However, a taxpayer can only avail credit of taxes paid under reverse charge mechanism only if the goods and/or services are used or will be used for purpose of business.

4. Communication is the key, especially amongst the vendors and customers. This coordination results in uniform reporting of the details in the GST returns. Chances of mismatches, omission or incorrect entries are reduced when the suppliers’ and the recipients’ synchronize their details and then file GST returns. It is also very important to identify the non-compliant vendors, interact with them, and resolve the queries then and there; this will help the recipients maximise ITC. There are advanced reconciliation software can help reduce this communication gap between the suppliers and the recipients. This software enables the users to send a reconciliation mismatch report to the vendors or suppliers to resolve any issue arising out of it.

5. Lastly, the taxpayers should report all the rectified sale or purchase transactions of the year, in the September returns. September return is the last chance for the taxpayers to report and correct all differences filed in tax returns of the Financial Year.

Any taxpayer who has not claimed ITC in the preceding months can avail the same in the subsequent months, but not later than the filing of annual return i.e. GSTR -9 or filing of GST returns for September month of the subsequent financial year, whichever is earlier. Any amendments or changes to the previously filed returns can be done within the same timeline.

GST reconciliation is a recurring event, it must be performed periodically to claim maximum credit and to avoid mismatches on a larger scale. The taxpayers shall communicate the queries with their recipients or vendors at the earliest and file error-free returns.

Renu Wadekar,
Practicing Company Secretary

Legal Terms

Ad coelum

To the Sky.—Ad coelum doctrine relates to the common law rule that a landlord owns everything below and above the land, up to the sky and below the earth to its core.

MCA Updates

Relaxation of fees payable on CRA-4upto 31-12-2018.
Due date for NFRA-1 shall be 30 days from the date of deployment of the form in MCA portal.
Forms that are revised— INC-20, MSC-1, MGT-1, MGT-3, INC-5, FC-1, FC-2, FC-3, STK-2, 23D,4, 23ACA-XBRL, CG-1, Form 66, DIR-5 , GNL-1, GNL-3, ADT-3, MR-1, MR-2, and CSR.

SEBI Updates

RBI Updates

Income Tax Updates

GST Updates

No major updates.

UIN Entities Under GST

Complete your last Compliance

Do not forget the last compliance for the year with ROC, MGT-7. File it in time and avoid penalties. Non-compliance is a costly risk now-a-days so remind your clients about their obligations.

In this Edition, UIN Entities under GST has been detailed following with our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST.

Saranya Deivasigamani,
CEO

UIN Entities Under GST

Though, the GST universally applies to all business entities in India, however there are certain bodies and individuals, which enjoy exemption from complying with the Goods and Services Tax. GST Unique Identification Number (UIN) is a special category of GST registration, given to foreign diplomatic missions and agencies, which are not liable to pay any taxes in the Indian terrain and hence does not fall in the purview of GST. Any sort of indirect or direct tax collected from such bodies is returned back to them.

As per Entry no. 59 of Notification no. 12/2017 Central Tax (Rate) Dated 28-6-2017 Services provided by foreign diplomatic missions (Located in India) to any Person is exempt. But Service received by foreign diplomatic missions is not exempt , however FDM can take refund of GST paid.

Eligibility to obtain UIN

GST UIN applies to any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations [Privileges and Immunities] Act, 1947, Consulate or Embassy of foreign countries and any other persons notified by the Commissioner. GST UIN enables such special bodies and individuals to claim refund of the GST, which they paid while receiving inward supplies.

The following organizations can apply for a UIN:

A specialized agency of the United Nations Organization
A Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947,
Consulate or Embassy of foreign countries
Any other person or class of persons as notified by the Commissioner

Purpose of a UIN

The organizations listed above will be granted a Unique Identification Number (UIN). This allows the body to receive tax refund on inward supplies of goods and services (purchases).

Format of UIN

GST UIN is a 15 digit alpha-numeric code, which helps to identify the exclusive identity of a GST exempted person or an entity.

Difference between GSTIN and UIN

GSTIN and UIN are two different types of identification numbers under GST.

Goods and Services Tax Identification Number (GSTIN) is allotted to regular taxpayers who are required to collect GST and file GST returns

UIN is allotted to only the above-mentioned organization.

Registration process

The organization must apply for UIN in FORM GST REG- 13.

If the GST officer is satisfied, he will assign a UIN and issue a certificate in FORM GST REG-06 within 3 working days from the date of the submission of the application.

Forms and Returns

Every UIN holder must file GSTR-11 by 28th of next month in order to claim refund of the taxes paid on his inward supplies. GSTR-11 will contain details of such supplies of taxable goods and/or services.

GSTR-11 will contain details of such supplies of taxable goods and/or services.

A UIN holder will not be allowed to add or modify any details in GSTR-11. The Information will be auto-populated information from seller’s GSTR-1 (sales).

Obligation of Seller

The taxable supplier (normal registered taxpayer under GST) while supplying to a UIN organization must:

Mention the UIN on the invoices
Treat such sales as supplies to another registered person (B2B)
Invoices should be uploaded in the same manner as for normal B2B sales.

Provide correct ”Place of Supply” for every invoice on which refund is applied for.

For example, Embassies registered in New Delhi providing hotel service consumed in the State of Maharashtra should mention the place of supply as Maharashtra. As place of supply determines the chargeability of CGST/SGST or IGST tax on an invoice, the supplier has to clearly mention the state where the activity is taking place. Wrong reporting of invoice level data in GSTR-11 or in the statement of invoice submitted may lead to delay in processing / rejection of refund claims.

Last day for claiming a refund on purchases by a UIN holder

As mentioned before, refunds can be claimed only through GSTR-11. The return must be filed within 6 months from the last day of the quarter in which supply was received.

For example, consider a UIN holder that received purchases on 10th October 2017.

A UIN holder will not be allowed to add or modify any details in GSTR-11. The Information will be auto-populated information from seller’s GSTR-1 (sales).

The last day of the quarter of receiving the supplies is 31st December 2017.

The deadline to claim the refund is 6 months from then, 30th June 2018.

Beyond the 6 month deadline, the refund will lapse.

Therefore, as a professional, we should advise our clients regarding their statement of invoice and remind on submitting the returns and forms in time.

Legal Term

A posteriori

An argument derived from subsequent event.

MCA Updates

No major updates.

SEBI Updates

Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 [last amended on September 11, 2018].

RBI Updates

External Commercial Borrowings (ECB) Policy – Review of Minimum Average Maturity and Hedging Provisions.

Income Tax Updates

No major updates.

GST Updates

No major updates.

NFRA

Festive Season ahead!

Hope you are all enjoying your Navratri and getting ready for Diwali. Wish you all a happy festival season and happy holidays. Have a proper balance of professional—personal life that you spend time in enjoying filing ROC returns, Navratri and Diwali all in it’s own time.

There is a new authority from 1st October, 2018 called as NFRA. We will see about this authority in detail in this edition following with the our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST.

Saranya Deivasigamani,
CEO

NFRA

The CG, by notification, constituted a National Financial Reporting Authority (“NFRA” or “the Authority”) to provide for matters relating to accounting and auditing standards under the Companies Act, 2013. This constitution came into effect from 1st October 2018.

First let us know what is NFRA. NFRA is a body proposed in Companies Act 2013 for the establishment and enforcement of accounting and auditing standards and oversight of the work of auditors. The Centre has appointed former IAS officer Rangachari Sridharan as chairperson of NFRA.

The Authority is constituted as per section 132 of the Companies Act, which consists of 15 sub-sections. Sub-sections 1 and 12 has been come into effect from 1st October 2018 which is constitution of NFRA and its head office shall be at New Delhi.

The Authority will consist of one post of Chairperson, three posts of full-time Members and one post of Secretary for NFRA.

The decision aims at establishment of NFRA as an independent regulator for the auditing profession which is one of the key changes brought in by the Companies Act, 2013. The inclusion of the provision in the Act was on the specific recommendations of the Standing Committee on Finance (in its 21st report).

This decision will strengthen the quality of audit, regularise the audit standards and enhance the audit profession. The decision is expected to result in improved foreign/domestic investments, enhancement of economic growth, supporting the globalisation of business by meeting international practices, and assist in further development of audit profession.

Jurisdiction:

The jurisdiction of NFRA for investigation of CA and their firms under section 132 of the Act would extend to listed companies and large unlisted public companies, the thresholds for which shall be prescribed in the Rules. The CG can also refer such other entities for investigation where public interest would be involved.

Apart from setting the rules and regulations governing the audit sector, the NFRA will have the power to debar erring auditors or audit firm for up to 10 years and impose significant fines on them.

According to Section 132 of the Companies Act, 2013, the NFRA will have powers to impose a fine of not less than ₹1 lakh, but the amount can extend up to five times of the fees received in case of individuals. The government has to set the rules that will stipulate the jurisdiction of the NFRA. Specifically, it has to set a limit on the size of an unlisted company that comes under the purview of the NFRA.

The inherent regulatory role of ICAI as provided for in the CA Act, 1949 shall continue in respect of its members in general and specifically with respect to audits pertaining to private limited companies, and public unlisted companies below the threshold limit to be notified in the rules.

The Quality Review Board (QRB) will also continue quality audit in respect of private limited companies, public unlisted companies below prescribed threshold and also with respect to audit of those companies that may be delegated to QRB by NFRA. Further, ICAI shall continue to play its advisory role with respect to accounting and auditing standards and policies by making its recommendations to NFRA.

Background:

The need for establishing NFRA has arisen on account of the need felt across various jurisdictions in the world, in the wake of accounting scams, to establish independent regulators, independent from those it regulates, for enforcement of auditing standards and ensuring the quality of audits to strengthen the independence of audit firms, quality of audits and, therefore, enhance investor and public confidence in financial disclosures of companies. However, the idea for an NFRA came following the Satyam scam in 2009, following which the Standing Committee on Finance recommended the creation of an audit regulator. The International Forum of Independent Audit Regulators (IFIAR) was set up in 2006, and now it has more than 52 independent audit regulators worldwide as members.

Extraction of Section 132 of the Companies Act, 2013

(1) The Central Government may, by notification, constitute a National Financial Reporting Authority to provide for matters relating to accounting and auditing standards under this Act.

(2) Notwithstanding anything contained in any other law for the time being in force, the National Financial Reporting Authority shall—

(a) make recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or class of companies or their auditors, as the case may be;

(b) monitor and enforce the compliance with accounting standards and auditing standards in such manner as may be prescribed;

(c) oversee the quality of service of the professions associated with ensuring compliance with such standards, and suggest measures required for improvement in quality of service and such other related matters as may be prescribed; and

(d) perform such other functions relating to clauses (a), (b) and (c) as may be prescribed.

(3) The National Financial Reporting Authority shall consist of a chairperson, who shall be a person of eminence and having expertise in accountancy, auditing, finance or law to be appointed by the Central Government and such other members not exceeding fifteen consisting of part-time and full-time members as may be prescribed:

Provided that the terms and conditions and the manner of appointment of the chairperson and members shall be such as may be prescribed:

Provided further that the chairperson and members shall make a declaration to the Central Government in the prescribed form regarding no conflict of interest or lack of independence in respect of his or their appointment:

Provided also that the chairperson and members, who are in full-time employment with National Financial Reporting Authority shall not be associated with any audit firm (including related consultancy firms) during the course of their appointment and two years after ceasing to hold such appointment.

(4) Notwithstanding anything contained in any other law for the time being in force, the National Financial Reporting Authority shall—

(a) have the power to investigate, either suo motu or on a reference made to it by the Central Government, for such class of bodies corporate or persons, in such manner as may be prescribed into the matters of professional or other misconduct committed by any member or firm of chartered accountants, registered under the Chartered Accountants Act, 1949:

Provided that no other institute or body shall initiate or continue any proceedings in such matters of misconduct where the National Financial Reporting Authority has initiated an investigation under this section;

(b) have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters, namely:—

(i) discovery and production of books of account and other documents, at such place and at such time as may be specified by the National Financial Reporting Authority;

(ii) summoning and enforcing the attendance of persons and examining them on oath;

(iii) inspection of any books, registers and other documents of any person referred to in clause (b) at any place;

(iv) issuing commissions for examination of witnesses or documents;

(A) imposing penalty of—

(I) not less than one lakh rupees, but which may extend to five times of the fees received, in case of individuals; and

(II) not less than ten lakh rupees, but which may extend to ten times of the fees received, in case of firms;

(B) debarring the member or the firm from engaging himself or itself from practice as member of the Institute of Chartered Accountant of India referred to in clause (e) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 for a minimum period of six months or for such higher period not exceeding ten years as may be decided by the National Financial Reporting Authority.

Explanation.—For the purposes of his sub-section, the expression “professional or other misconduct” shall have the same meaning assigned to it under section 22 of the Chartered Accountants Act, 1949.

(5) Any person aggrieved by any order of the National Financial Reporting Authority issued under clause (c) of sub-section (4), may prefer an appeal before the Appellate Authority constituted under sub-section (6) in such manner as may be prescribed.

(6) The Central Government may, by notification, constitute, with effect from such date as may be specified therein, an Appellate Authority consisting of a chairperson and not more then two other members, to be appointed by the Central Government, for hearing appeals arising out of the orders of the National Financial Reporting Authority.

(7) The qualifications for appointment of the chairperson and members of the Appellate Authority, the manner of selection, the terms and conditions of their service and the requirement of the supporting staff and procedure (including places of hearing the appeals, form and manner in which the appeals shall be filed) to be followed by the Appellate Authority shall be such as may be prescribed.

(8) The fee for filing the appeal shall be such as may be prescribed.

(9) The officer authorised by the Appellate Authority shall prepare in such form and at such time as may be prescribed its annual report giving a full account of its activities and forward a copy thereof to the Central Government and the Central Government shall cause the annual report to be laid before each House of Parliament.

(10) The National Financial Reporting Authority shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings in such manner as may be prescribed.

(11) The Central Government may appoint a secretary and such other employees as it may consider necessary for the efficient performance of functions by the National Financial Reporting Authority under this Act and the terms and conditions of service of the secretary and employees shall be such as may be prescribed.

(12) The head office of the National Financial Reporting Authority shall be at New Delhi and the National Financial Reporting Authority may, meet at such other places in India as it deems fit.

(13) The National Financial Reporting Authority shall cause to be maintained such books of account and other books in relation to its accounts in such form and in such manner as the Central Government may, in consultation with the Comptroller and Auditor-General of India prescribe.

(14) The accounts of the National Financial Reporting Authority shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him and such accounts as certified by the Comptroller and Auditor-General of India together with the audit report thereon shall be forwarded annually to the Central Government by the National Financial Reporting Authority.

(15) The National Financial Reporting Authority shall prepare in such form and at such time for each financial year as may be prescribed its annual report giving a full account of its activities during the financial year and forward a copy thereof to the Central Government and the Central Government shall cause the annual report and the audit report given by the Comptroller and Auditor-General of India to be laid before each House of Parliament.

Thus, as an audit professional, we have to be cautious about the standards and promptness that we follow while auditing.

Legal Term

Ad-hoc

Latin meaning “for this purpose only”. Thus, an adhoc committee is formed for a specific purpose, usually appointed to solve a particular problem.

MCA Updates

Forms revised—SPICe w.e.f. 16th OCT, 2018, URC-1 w.e.f. 5th JUL 2018, DIR-12 w.e.f. 4th OCT, 2018. LLP incorporation forms, RUN-LLP, FiLLiP, Addendum to FiLLiP, Form 17, Form 18 and Form 5 w.e.f 2nd OCT 2018.
Amendments in Schedule III to the Companies Act, 2013.
Re-constitution of High level Committee on Corporate Social Responsibility-2018.
Commencement of Sec 132 (1) & (2) and constitution of NFRA Dated 01.10.2018.
Companies (Registered Valuers and Valuation) Third Amendment Rules, 2018.

SEBI Updates

Amendments made in number of SEBI Regulations including: SEBI (SAST), SEBI (ILSDISR), SEBI (ILNCRPS), (ILDS), SEBI (DP), Securities Contracts, (SECC), SEBI (CRA), SEBI (Employees Service, etc

RBI Updates

The Electronic Trading Platforms (Reserve Bank) Directions, 2018
External Commercial Borrowings (ECB) Policy – Liberalisation .

Income Tax Updates

Constituted of the National Committee for Promotion of Social and Economic Welfare.
Nature of acquisition in respect of Section 112A (1) (a) shall not apply in certain transactions.
Section 80D notified for AY 2019-20

GST Updates

Advisory for Taxpayers to file Refund for Multiple Tax period .

SCHEDULE V

3 Years of ZAPPY NEWS

We hope that 3 years of Zappy News provided you various insights about our industry. We promise to provide you valid updates that will help you improve your knowledge bank and excel in the field. This month we are going to see about the amendments in Section 196 & 197 of the Companies Act, 2013 which came into effect from 12th September 2018.

The article will follow with the our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST.

Saranya Deivasigamani,
CEO

Section 196 & 197 of the Companies Act, 2013

We all know that as per Section 197 (1) of the Companies Act, the total managerial remuneration payable by a public company, to its directors, managing director and whole-time director, and its manager in respect of any financial year shall not exceed 11% of the net profits of that company. Provided that the company may, authorise the payment of remuneration exceeding 11%. of the net profits of the company, subject to the provisions of Schedule V. Now MCA has brought in some amendments to the Schedule V along with commencement of Section 66 to 70 of the Companies Act from 12.09.2018.

As per the amendments, now the company need not knock at the doors of the Central Government for approval on remuneration of Directors and KMPs.

The detailed amendments of the act are as follows:

U/S	Earlier Provisions	Amendments
196 (3) (a)		Inserted: “Provided further that where no such special resolution is passed but votes cast in favour of the motion exceed the votes, if any, cast against the motion and the Central Government is satisfied, on an application made by the Board, that such appointment is most beneficial to the company, the appointment of the person who has attained the age of seventy years may be made.
196 (4)	Subject to the provisions of section 197 and Schedule V, a managing director, whole-time director or manager shall be appointed and the terms and conditions of such appointment and remuneration payable be approved by the Board of Directors at a meeting which shall be subject to approval by a resolution at the next general meeting of the company and by the Central Government in case such appointment is at variance to the conditions specified in that Schedule:	The words “in that Schedule: “ has been substituted as: “Specified in Part I of that Schedule“
197 (1)	The company in general meeting may, with the approval of the Central Government, authorise the payment of remuneration exceeding eleven per cent. of the net profits of the company, subject to the provisions of Schedule V.	The words “approval of the Central Government” has been omitted.
197 (1)	Except with the approval of the company in general meeting.	Inserted the words “By a special resolution. Provided also that, where the company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, shall be obtained by the company before obtaining the approval in the general meeting.”
197 (3)	Notwithstanding anything contained in sub-sections (1) and (2), but subject to the provisions of Schedule V, if, in any financial year, a company has no profits or its profits are inadequate, the company shall not pay to its directors, including any managing or whole-time director or manager, by way of remuneration any sum exclusive of any fees payable to directors under sub-section (5) hereunder except in accordance with the provisions of Schedule V and if it is not able to comply with such provisions, with the previous approval of the Central Government.	The words “and if it is not able to comply with such provisions, with the previous approval of the Central Government.” has been omitted.
197 (9)	If any director draws or receives, directly or indirectly, by way of remuneration any such sums in excess of the limit prescribed by this section or without the prior sanction of the Central Government, where it is required, he shall refund such sums to the company and until such sum is refunded, hold it in trust for the company.	The subsection was substituted as: “If any director draws or receives, directly or indirectly, by way of remuneration any such sums in excess of the limit prescribed by this section or without approval required under this section, he shall refund such sums to the company, within two years or such lesser period as may be allowed by the company, and until such sum is refunded, hold it in trust for the company.”
197 (10)	The company shall not waive the recovery of any sum refundable to it under sub-section (9) unless permitted by the Central Government.	The words “permitted by the Central Government” has been substituted as: “approved by the company by special resolution within two years from the date the sum becomes refundable.” Inserted “Provided that where the company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, shall be obtained by the company before obtaining approval of such waiver.”
197 (11)	In cases where Schedule V is applicable on grounds of no profits or inadequate profits, any provision relating to the remuneration of any director which purports to increase or has the effect of increasing the amount thereof, whether the provision be contained in the company‘s memorandum or articles, or in an agreement entered into by it, or in any resolution passed by the company in general meeting or its Board, shall not have any effect unless such increase is in accordance with the conditions specified in that Schedule and if such conditions are not being complied, the approval of the Central Government had been obtained.	The words “and if such conditions are not being complied, the approval of the Central Government had been obtained..” has been omitted.
197 (16)		Inserted the subsection: “The auditor of the company shall, in his report under section 143, make a statement as to whether the remuneration paid by the company to its directors is in accordance with the provisions of this section, whether remuneration paid to any director is in excess of the limit laid down under this section and give such other details as may be prescribed.”
197 (17)		Inserted the subsection: “On and from the commencement of the Companies (Amendment) Act, 2017, any application made to the Central Government under the provisions of this section [as it stood before such commencement], which is pending with that Government shall abate, and the company shall, within one year of such commencement, obtain the approval in accordance with the provisions of this section, as so amended”

Along with these amendments, there are modifications in the e-Form MR-2 which has to be filed in carefully complying with all relevant provisions that are amended. Point we have to be careful is when a Company had defaulted in payment of dues to any secured creditors.

Legal Term

Libel

A published false statement that is damaging to a person’s reputation; a written defamation.

MCA Updates

Commencement of Section 66 to 70 of the Companies Act and Amendment of Schedule V from 12.09.2018.
Companies (Prospectus and allotment of securities) 3rd Amendment Rules 2018 dated 10.09.2018.
Companies (Registration Offices and Fees) fourth Amendment Rules, 2018 dated 21.08.2018.
Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2018 dated 21.08.2018.

SEBI Updates

Master Circular for Commodity Derivatives Market.
Extension of Trading hours of Securities Lending and Borrowing (SLB) Segment.
Amendment to SEBI Circular No. CIR/IMD/FPIC/CIR/P/2018/64 dated April 10, 2018 on Know Your Client Requirements for Foreign Portfolio Investors (FPIs).
Electronic book mechanism for issuance of securities on private placement basis – Clarifications.
Streamlining the process of public issue under the SEBI (Issue and Listing of Debt Securities) Regulations, 2008, SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013, SEBI (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 and SEBI (Issue and Listing of Debt Securities by Municipalities) Regulations, 2015

RBI Updates

No major updates.

Income Tax Updates

Notification No. 42/2018 [F. No. 370142/05/2018-TPL] / SO 4213(E) – Determination of Fair Market Value for Inventories.
Clarification on the immunity provided u/s 270AA of the Income-tax Act, 1961.
Order under section 119 of the Income-tax Act, 1961.
Amendment to para 10 of the Circular No. 3 of 2018 dated 11.07.2018.

GST Updates

Facility to download GSTR-2A in excel is now available.
Advisory for Taxpayers to file Refund for Multiple Tax period.