REGULATORY UPDATE

Veritas Finance Private Limited

www.veritasfin.in

SEPTEMBER2019

INTRODUCTION

Objec�ve:

Keeping up to date with Legisla�ons, Rules and Prac�ces applicable to our NBFC sector to stay compliant and be aware of repercussions, to plan consequen�al ac�ons, to add value to business and to achieve a compe��ve edge.

Period: September 2019

Coverage:

The Newsle�er would broadly cover the following applicable areas:

Par�culars

Reserve Bank of India

Securi�es and Exchange Board of India

Ministry of Corporate Affairs

Page No.

Veritas Finance Pvt Ltd

SKCL Central Square 1, South Wing, 1st Floor,

Unit # C28 – C35, CIPET Road,

Thiru Vi Ka Industrial Estate, Guindy, Chennai-600 032.

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www.veritasfin.in

Insolvency and Bankruptcy code, 2016 (IBC)

GST Updates

Govt Expands Scope of CSR Spending

Icai Issues Advisory on Auditor’s Repor�ng On Sec�on 197(16) of The Companies Act, 2013

Corporate Tax Cut for Domes�c and New Domes�c Manufacturing Companies: FM Announces

RESERVE BANK OF INDIA

Image courtesy : Reserve Bank of India (website: h�ps://rbi.org.in/)

RESERVE BANK OF INDIA

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h�ps://www.rbi.org.in/Scripts/No�fica�onUser.aspx?Id=11691&Mode=0

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SECURITIES AND EXCHANGE BOARD OF INDIA

Image courtesy : Securi�es and Exchange Board of India (website :h�ps://www.sebi.gov.in/)

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SECURITIES AND EXCHANGE BOARD OF INDIA

h�ps://www.sebi.gov.in/legal/regula�ons/sep-2019/securi�es-and-exchange-board-of-india-prohibi�on-of-insider-trading-third-amendment-regula�ons-2019_44341.html

h�p://bseindia.zeemail.in/ltrack?g=0&id=cU8JVANWDFEFDU0CAFMDVAcKVEQ=VAINBwMEUQlPXVYGUVJPDR0IeRVURlhGURBVDFscClY=&client=6404&c=0000

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MINISTRY OF CORPORATE AFFAIRS

Image courtesy : Ministry of Corporate Affairs (website h�p://www.mca.gov.in/MinistryV2/homepage.html)

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MINISTRY OF CORPORATE AFFAIRS

h�p://www.mca.gov.in/Ministry/pdf/NFRA_05092019.pdf

INSOLVENCY AND BANKRUPTCY CODE, 2016(IBC)

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INSOLVENCY AND BANKRUPTCY CODE, 2016(IBC)

A list of the provisions of the Act and the Code under which valua�ons are required to be conducted by a registered valuer are at Annexures I and II respec�vely for ready reference of the stakeholders.

Valua�on required under the provisions of the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 – Dated 16.09.2019

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GST UPDATES

• Soon, ITC claim to be restricted, unless GSTR-1 has been filed.

KEY ANNOUNCEMENTS

37th GST Council mee�ng dated – 20th September 2019

• In principle decision to prescribe reasonable restric�ons for passing of ITC by risky taxpayers including risky new taxpayers (likely be system driven based on their ac�vity).

• A Commi�ee of Officers will review simplifica�on of GSTR-9 and GSTR-9C.

• GSTR-9A waived for FY 2017-18 and FY 2018-19.

• GSTR-9 filing for businesses with turnover upto Rs 2 crores op�onal for FY 2017-18 and FY 2018-19.

• Integrated refund system with refund disbursal by single authority to be introduced from 24th September, 2019.

• Aadhar mandatory for registra�on of taxpayers under GST and it may become mandatory for claiming refunds.

• New return filing system from April 2020.

GST UPDATE

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GOVT EXPANDS SCOPE OF CSR SPENDING

ICAI ISSUES ADVISORY ON AUDITOR’S REPORTING ON SECTION 197(16) OF THE COMPANIES ACT, 2013

• CSR fund can be spent on incubators funded by the Centre or state or any state-owned companies or any agency or public sector undertaking of central or state government, and, making contribu�ons to public funded universi�es, IITs, na�onal laboratories and autonomous bodies (established under the auspices of ICAR, ICMR, CSIR, DAE, DRDO, DST, Ministry of Electronics and Informa�on Technology) engaged in conduc�ng research in science, technology, engineering and medicine aimed at promo�ng SDGs (sustainable development goals),"

• This is expected to a�ract more funds on research and development in the country

The Ins�tute of Chartered Accountants of India ( ICAI ) has issued advisory on Auditor’s repor�ng on Sec�on 197 (16) of the Companies Act, 2013. Sec�on 197(16) of the Companies Act, 2013 requires as under:

“The auditor of the company shall, in his report under sec�on 143, make a statement as to whether the remunera�on paid by the company to its directors is in accordance with the provisions of this sec�on, whether remunera�on paid to any director is in excess of the limit laid down under this sec�on and give such other details as may be prescribed”

The ICAI has said that, the aforesaid repor�ng requirement for auditors of public companies needs to be covered in auditor’s report under the Sec�on “Report on Other Legal and Regulatory Requirements”.

Accordingly, auditors of public companies are advised to comply with the aforesaid repor�ng requirements in their auditor’s reports. The ICAI has also said that, the Advisory will come into force from immediate effect.

• New provision inserted in the income tax act with effect from fiscal year 2019-20, that allows any domes�c company to pay income tax at the rate of 22% subject to condi�on they will not avail any incen�ve or exemp�ons.

• Manufacturing companies set up a�er October 1 to get op�on to pay 15% tax. Effec�ve tax rate for new manufacturing firms to be 17.01% inclusive of surcharge & tax.

• To provide relief to companies availing of concessions and benefits, a MAT relief by reducing it from 18% to 15%

• CSR 2% spending to include government, PSU incubators and public funded educa�on en��es, IITs.

• Listed companies that have announced buyback before July 5, 2019, tax on buyback of shares will not be charged

• Higher surcharge will also not apply on capital gains on sale of security including deriva�ves held by FPIs

• Enhanced surcharge will not apply to capital gains arising on equity sale or equity-oriented funds liable to STT stabilise flow of funds into capital markets

CORPORATE TAX CUT FOR DOMESTIC AND NEW DOMESTIC MANUFACTURING COMPANIES: FM ANNOUNCES