CORPORATE AND PROFESSIONAL UPDATE AUG 9, 2016
Tax update:
Direct Tax:
The scrap and spent solution are part of the manufacturing process and eligible for exemption u/s 10B. [The CIT vs. M/s. Orchid Chemicals & Pharmaceuticals Ltd. – 2016 (8) TMI 278 – Madras High Court]
ITAT Bangalore in the below citied case held that as assessee has failed to establish this fact that he Diamonds sold in the present year are the same Diamonds which declared by the assessee in VDIS declaration 1997 hence addition u/s 68 will be made.( Shri Ramavatar S. Mahajan Vs. The ITO, Hubli)
Delhi ITAT holds that EPFO (Employees Provident Fund Organisation governed by Employees Provident Fund Act, 1952) is liable to deduct tax u/s 192 in respect of settlement/withdrawals of accumulated balances by employees before 5 years of rendering of continuous service during AYs 2008-09 to 2013-14-[TS-422-ITAT-2016(DEL) ]
Even a motor vehicle can be treated as machinery if it is used in execution of works contract under Gujarat VAT State of Gujarat v. Yantraman Automac (P.) Ltd. [2016] 72 62 (Gujarat)
A co. preparing its final accounts on basis of a calendar year couldn’t be chosen as comparable Core Objects India (P.) Ltd. v. Income-tax Officer, Ward 11(1), Bangalore [2016] 72 53 (Bangalore – Trib.)
No interest if differential service tax is paid prior to finalization of provisional assessment
Canara Bank v. Commissioner of Central Excise & Customs (LTU) [2016] 72 52 (Bangalore – CESTAT)
Fee charged by Finance Co. for collecting EMI from bank customers would be considered for sec. 36(viii) deduction Gruh Finance Ltd. v. Assistant Commissioner Income-tax, Circle-4, Ahmedabad[2016] 72 48 (Ahmedabad – Trib.)
TDS under sec. 192 applicable to EPF Scheme prior to introduction of sec. 192A
Employees Provident Fund Organization v. Deputy Commissioner of Income-tax, (TDS), Noida [2016] 72 83 (Delhi – Trib.)
Capital goods used for generation of electricity eligible for credit even if they are installed on premises of AE OPG Metals (P.) Ltd. v. Commissioner of Central Excise, Trichy
[2016] 72 51 (Chennai – CESTAT)
No abuse of dominance by DLF in Lucknow as there were many real estate developers therein Vinay Kala and Smt. Mina Kala v. DLF Ltd. [2016] 72 41 (CCI)
Indirect Tax:
Kerala VAT dealer can claim rebate of entire tax if output tax doesn’t exceed total rebate claimed Maya Rajeev v. Commercial Tax Officer [2016] 72 61 (Kerala)
Intellectual Property Right service – taxability u/s 66A – Held that – to be categorized for service tax purpose under IPR, such right should have been registered with trade mark/patent authority. As such, there can be no provision of IPR service for tax liability on reverse charge basis. Demand set aside and Decided in favor of assessee – Chambal Fertilizers and Chemicals Ltd. Versus C.C.E., Jaipur – 2016 – CESTAT NEW DELHI
If Indian courier-agency hires foreign courier-agencies to complete delivery outside India of foreign-bound packages, then, since role of foreign agencies commences and ends beyond border of India, hence, services of foreign agencies cannot be treated as wholly/partly performed in India and cannot, therefore, be taxed in India under reverse charge under section 66A-(First Flight Couriers Ltd. v. Commissioner of Service Tax, Mumbai-II.)
GST
Constitutional amendments on GST Bill made by Rajya Sabha, rectified by Lok sabha unanimously.
FAQ on Company Law:
Query: In case a director has attended Board meetings through video conferencing mode. Will it be counted for quorum. Please advice
Answer: Yes, as per Rule 3(2)(e) & (f) of the Companies (Meetings of Board and its Powers) Rules, 2014, any director who desire, to participate may intimate his intention of participation through electronic mode at the beginning of calendar year and such declaration shall be valid for one calendar year. And in absence of any intimation, it shall be assumed that director shall attend the meeting in person.
Further, Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 provides for the matters which shall not be dealt with in a meeting through video conferencing mode or other audio visual means.
Further, as per Section 174 of the Companies Act 2013, participation of directors through video conferencing shall be counted for the purpose of quorum.
Query: We have a query regarding the regularization of Additional director in a Private Limited Company. We want to change designation of a person from additional director to Director Are we required to re appoint him as the Director in the Annual General Meeting of the Company as he is suppose to retire in the ensuing Annual General Meeting or else. Please advise us that how can we change his designation from additional director to Director?
Answer: You shall have to convene an Extra ordinary General meeting of the Company or you may regularize him in the ensuing Annual General Meeting also, for the purpose. Thereafter, you need to file Form DIR-12 and purpose selected should be “Change in Designation” and attach the copy of Resolution passed in the General Meeting of the Company with the Form.
Further, to state that Form DIR 12 is not only meant for appointment or Cessation of Director only. It is meant for Change in Designation as well.
Query: How can Board meeting of an OPC be convened?
Answer: For the purposes of holding board meetings, in case of an OPC which has only One director, It shall be deemed to sufficient compliance if the resolution is entered in the minutes of meetings maintained and such minutes be signed and dated by director as well as member, then such date shall be deemed to be the date of the board meeting for all the purposes under Companies Act, 2013.
IRDA:
The Insurance Regulatory and Development Authority of India has issued Insurance Regulatory and Development Authority of India (Listed Indian Insurance Companies) Guidelines, 2016. These guidelines shall be applicable to all insurers whose equity shares are listed on the stock exchanges and to the allotment process pursuant to the public issue. These guidelines shall be in addition to, and should be read with any other law for the time being in force, including the IRDAI (Issuance of capital by Indian Insurance Companies transacting other than Life Insurance Business) Regulations, 2015. These guidelines shall come into effect on the day of their issuance.
RBI Updates:-
- RBI permits setting up of IFSC Banking Units (IBUs). Notification No. DBR.IBD.BC. 8536/23.13.004/2015-16.
- RBI has issued a notification regarding Implementation of Accounting Standards (Ind AS) vide Notification no. RBI/2016-17/34 dated 04/08/2016.
Key Dates:
- Income tax department extends ITR-V verification deadline till 31 JAN 2016.
- 10.08.16 is last date to file ER-1,2 & 6 for Excise returns by Non SSI assesses, EOUs,& by units paying duty of more than 1Cr respectively, for July 2016.
- Excise return in form ER-1 for NON SSI assessee for the month of July: 10/08/2016
- Return by EOU in the ER-2 form for the month of July-10/08/2016
- Public Servants Annual Assets Liabilities Return Filing due date extended to 31.12.2016
- 15-08-16 is the last date for Issue of TDS certificates in form 16A for quarter ended 30-6-16 by all deductors.
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