CONTENTS · country to implement GST to reduce tax-evasion. Since then, more than 160 countries have implemented 1GST since 1954. GST is designed to bring relief to the tax payers

CONTENTSMESSAGE FROM THE PRESIDENT 3

ARTICLES

GST – Boon or Bane 4

Tax Deduction at Source Under GST Regime 9

RectificationofMistakesapparentfromRecord 13

StatutoryProvisionsonDocumentsandNoticesUnderGST 15

KNOWLEDGE UPDATE 8, 14, 17, 20

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INVITATION FOR CONTRIBUTING AN ARTICLE

August 2018 | Student Professionals Today3

DearStudents,

At the very beginning, letme conveymy best wishes to all of you on thepropitiousoccasionof72ndIndependenceDay,IndiaisgoingtocelebrateonAugust15,2018.

Friends,IndependenceDayholdsgreatsignificanceforallofus,asitisthedaywhenourTricolourIndianNationalFlagwasraisedattheRedFortinDelhi.ThecelebrationofthisdaynotonlycommemoratethefreedomofIndiathatwehaveachievedfromBritishRule,butitalsoarticulatestherichsagaofouraccomplishmentsyearafteryearanddecadeafterdecade.Weshouldconsiderourselvesprivilegedthatourforefathershavegivenusalandofpeaceandjoywherewecanexerciseourrightswithoutfearandcontributeourworthinouridentifiabledevelopmentandinthedevelopmentoftheentirenation.

Ourcountryismakingrapidstridesinthefieldoftechnology,education,sports,financeandvariousotherfieldswhichwerealmost impossiblebefore freedom. India isoneamong thecountries rich innuclearpowerandisnowconsideredasoneofthefastestgrowingeconomiesoftheworld.Wearegoingaheadbyactivelyparticipatinginglobalactivities,beitgovernance,technology,economy,policy,sportsandalike.

Yes,wearesovereignandrelishcompletefreedominlargestdemocracyintheworld,howeverweshouldnottakeourselvesfreeofresponsibilitiestowardsourcountry.Beingresponsiblecitizensofthecountry,weshouldbealwaysreadytoabidebytherulesandregulationsandfollowapremierstructureofgoodgovernance in the interestofentirenation.Asastudentandapreciousstakeholderof the Institute,aPremierNationalBody in the field ofGovernance, you have an added responsibility of ensuring bestpracticesofcomplianceandgovernancethroughyourprofessionalservicetotheNation.

ConsideringthemomentousroleofourprofessionalcommuneinassistingthenationtowardsasuccessfulattainmentoftheFreedom from Corruption, Terrorism, Castiesm, Communalism and Dirt,theInstituteisstandingshouldertoshoulderinbuildingthecapacityofitsprofessionalsinthecontemporaryperspectivesofGoodGovernance.

Intheprecedingmonth,theorganizationofGoldenJubileeYear–19thAllIndiaStudents’Conference,openingof75thStudyCenter,ObservationofStudentMonthwithvariedactivitiesofinclusivedevelopmentof our students, Webcast for Students on Pre-Exam Test, New Syllabus and Prevention of SexualHarassment atWork Place and alike, features our endeavors in enabling our students to act as theprofessionalcatalystinreapingthegloryoftheInstituteandIndiaatglobalplatform.

Friends,inlastfiftyyears,theInstitutehavebeenaproudpartnerinthesplendiddevelopmentofthenationandIamsurethatwithourproficiencyandexpertise,wewouldkeepservingthenationforanefficacioustransformationtowardsaNewIndiaontheproudcarnivalof75thyearofIndependencein2022.

Lastbutnottheleast,‘Let’s take decision to value our Nation, not to forget the sacrifices, who gave us the freedom, now it’s our turn for reformation’.

HappyIndependenceDay!CS Makarand Lele

President,ICSI

MESSAGE FROM THE PRESIDENT

tks Hkjk ugha gS Hkkoks ls ftles cgrh jl/kkjA og ân; ugha gS iRFkj gS] ftles Lons’k dk I;kj ughaA


Kajol Amar Punjabi – Student, CS Professional Programme

Email ID : [email protected]

GST – Boon or Bane

In this article, author attempts to give an overview of GST, one of the biggest tax reform of the country. It is attempted to analyse the GST law on the parameters of ascertaining whether GST stands a boon or bane. The article concludes that an endeavour is being made to make GST truly a boon.

I. Introduction

The Constitution (One Hundred and TwentySecond Amendment) Bill, officially knownas the Constitution (One Hundred and First(Amendment) Act, 2016, introduced a nationalGoodsandServicesTax(‘GST’)inIndiafrom1stofJuly2017.GSTisasingletaxonthesupplyofgoodsandservices,rightfromthemanufacturerto the end consumer. GST would bring in aneffectiveandsimpletaxsystemtoensureefficientindirecttaxadministration.Itwillbringingreatertransparency and strengthen monitoring, thusmakingtaxevasiondifficult.FrancewasthefirstcountrytoimplementGSTtoreducetax-evasion.Since then, more than 160 countries haveimplementedGSTsince19541.GSTisdesignedtobringrelieftothetaxpayersreelingunderthemultipleandcomplexindirecttaxsystemexistinginthecountryforsixdecades.

The Indian GST is structured for efficient taxcollection and easy inter-state movement ofgoodsetc.GSTisashift fromoriginbasedtaxtodestinationbasedtax.Destinationbasedtaxmeansthattaxwouldaccruetothetaxingauthoritywhichhas jurisdiction over the place of consumption

which isalso termedasplaceofsupply2. It is thebiggesttaxreforminthecountry.

Theneedfor implementationofGSTin Indiawasechoedovertheworld.TheInternationalMonetaryFund (IMF) observed that the long-awaited GSTshouldbeimplemented,asitwouldcreateasinglenational market, enhance the efficiency of intra-IndianmovementofgoodsandservicesandboostGDP growth3. The international pressure and theprevailingstateofaffairspromptedthegovernmenttofinallybringaboutthemostawaitedtaxreform.

Nodoubt,whetherGSTwillactuallybeaboonfortheIndianeconomywillbeprovedinthecourseoftime.InthisarticletheAuthorhasputforwardananalysisofthelawsprevailingbeforeimplementationofGSTandinordertodrawacomparisonhasputforwardananalysisofGSTinIndiavis-à-vislawsprevailingbeforeitsimplementationinPartIIofthearticle.

GST has been implemented in many countriesaroundtheglobewhichhasbeendiscussedinPartIIIofthearticle.Butnotallcountriesareexpectedto see the same impact of GST on its economy.Whether ithasapositiveoranegative impacton

1. Reserve Bank of India, Goods and Services Tax: A Game Changer, Annual Report 2017, 20, 23 (2017).

2. Central Board of Excise & Customs, Frequently Asked Questions (FAQs) On Goods And Services Tax (GST), (March 2017 31), https://cbec-gst.gov.in/pdf/new-faq-on-gst-second-edition.pdf.

3. International Monetary Fund, Article IV Consultation – Press Release; Staff Report; And Statement By The Executive Director For India, 16/75, March 2016.


theIndianEconomyistobeevaluatedandthusananalysisisprovidedinPartIVofthearticle.

Well, it is for the reader to decide and form anopinion on effectiveness of GST the Author hasexpressed an opinion in Part V which concludesthearticle.

II. GST regime vis-à-vis Pre GST Regime

BeforedrawingaconclusionastowhetherGSTisa boon or bane for India, a comparison betweenthepreandpostGSTscenarioisrequired.Thesecomparisonarefollows–

Legislation -Previously,therewereseparatelawsfor separate levy. For instance, Central ExciseAct, 1944, respective State VAT laws etc. WhileunderGST,nodoubt thereareseparate lawsbutallof themarebasedonthesameprinciples.Forinstance,thedefinitionof‘supply’undersection7oftheCGSTActwouldbeapplicabletoIGST,SGSTandUTGSTActsaswell.Thetaxableevent,pointof taxation, timeofsupply identical inall theGSTlaws.

Concurrent Power - Pre-GST,therewasnosuchpower tobothCentreandStateonsamesubjecttaxmatter.WithGST on board, bothCentre andState are vested with the concurrent power tomakelawswithrespecttogoodsandservicestax,asproposedinarticle246AoftheConstitution.Theintra-state tradenowcomesunder the jurisdictionof both centre and state; while inter-state tradeand commerce is “exclusively” under centralgovernmentjurisdiction

Cascading -Theissueofcascadingoftaxeswasoneofthemajorissueswhichcalledforanurgentreformintheindirecttaxregimeinthecountry.Thisissue of cascading has been resolved to a greatextentbytheintroductionofGST,asthetaxisleviedonlyonsupplyofgoodsandduetotheeliminationof other taxes like VAT andCST, input tax creditwould be available to the person who has paidGSTexceptthefinalcustomer.ThoughcascadingeffectremainsonimportedgoodsasIGSTisleviedafterbasiccustomduty,andalsoduetodefinitionof ‘transaction value’ as per section15 (2) of the

CGSTActincludesanytaxes,fees,chargesleviedunder any law other than GST law4. This bringsintolightthetruththat,thoughtheevilofcascadingof taxeshasbeen removed, it remains toexist insomeareas.

Rate of Tax - In the pre GST regime, due tothe applicability of taxes of different nature ona single transaction, there were multiple ratesof taxundermultiple laws.This issuehasbeendiscussed in detail in the “Report of the TaskForce on GST” that was submitted to the 13thFinanceCommission.TheReportrecommendsabroadbasefortheGST,andacombinedCentreand State revenue neutral rate of 12 per cent.Abroadbaseandmoderaterate isanessentialfeature of a good tax system.Multiplicity of taxratesisalsotobeavoided.WhileunderGST,theratesoftaxwillremainuniformunderalltheActs,asdecidedbytheGSTCouncil.

Exclusion of Certain Items - Certain itemsnamely petroleum crude, motor spirit, aviationturbine fuel, high speed diesel, natural gas,alcohol for human consumption, electricity andrealestatesectorhavenotbeencoveredunderthe penumbra of GST. Inclusion of electricityunder GST has not been envisaged ever sincetheFirstDiscussionPaperwaspublishedin2009on GST. Neither the Empowered Committee,nor theParliamentaryStandingCommitteeeverrecommendedinclusionofelectricityunderGST.In the case of alcohol, the States have beenconsistently opposing the inclusion of alcoholunderGST.EvenintheFirstDiscussionPaper,ithadbeenrecommendedthatalcoholbeexcludedfromGST.Statesretainthepowerstolevyexcisedutyaswellassalestaxonalcohol.Centrehasnopowersvis-à-visalcohol.

Compliances – The major shift to filling severalreturns in place of one return has made itthe compliances difficult under GST. Also thetechnologicalhandicapshavecome in thewayofcompliances. There is lack of infrastructure withthe traders.When therearemultiple ratesof tax,theassessee tries to fit hisgoods/serviceswithin


4. Central Goods and Services Tax Act, 2017.



thedefinitionofthatgoods/serviceswhichattractalowerrateoftax.AclassicexampleofthisisthecaseofCCE v.Connaught Plaza Restaurant (P) Ltd.5.Asicecreamwaschargedwithahigherrateoftaxas compared to dairy products, theRespondentsclaimedthattheirproductnamelythesoftserveicecreamfellundertheheadingofdairyproductsandnot icecream.TheCourtallowed theappealandheldthatthenatureoftheproductandthegeneralperceptionoftheconsumersshouldbeconsideredfordecidingtheheadingforlevyofexcise.

III. Indirect Taxation Around the World

AsthescopeofthisarticleisrestrictedtoGST,thestudy indirect taxationsystemaroundtheworld isrestrictedonly toGSToralikecomponentsof thesystem.

Canada – Canada imposes a 5 per cent federalvalue-added tax called the goods and servicestax (GST), which applies to the supply of mostgoods and services in Canada and to imports ofmostgoodsintoCanada.FiveCanadianprovinces(Ontario, Nova Scotia, New Brunswick, PrinceEdward Island, andNewfoundlandandLabrador)haveharmonized theirprovincial sales taxeswiththefederalGSTtomakeasingleharmonizedsalestax (HST), which applies to most supplies withintheseprovinces.Thegeneral rule is that ifgoodsare delivered or made available to a recipientoutsideCanada, then thesupply is considered tobemadeoutsideCanadaandthesaleisgenerallynot subject to GST/HST. If goods are deliveredormadeavailable to the recipientwithinCanada,then the supply is generally considered to bemade inCanadaand the sale is subject toGST/HST6.TheratesofGSTapplicableinCanadadifferfromprovincetoprovince.TherateofGSTis5percent.ThemaximumHST is 15 per centwhich isapplicableinfourprovinces7.ThedualGST(CGST-SGST)model in India is similar to theGST-QSTmodelimplementedtheprovinceofQuebec.

France-TheVATadoptedinFranceasasubstituteforturnovertaxationiscurrentlyreceivingthemostattentionasapotentialsourceofnewrevenue.Thetaxisleviednormallyatarateof20percentonthevalue of total sales including the tax element (25per cent on luxury articles, 10 per cent onmanyrawmaterials, 6 per cent on some foodstuffs, 12per cent on construction, 5 to 12.5 per cent onvariousservices,andnotaxonexports),butcreditis given for value-added tax paid on purchasedinputs.Theperformingofcertainservicesissubjecttoaseparateservices tax, in lieuofVAT.Thetaxis paid by those who perform the services, buttheynormallybillitseparatelyontheinvoicetothecustomer.Thenormalrateis8.5percent,witha12percentrateoncertaincategories8.

United Kingdom - United Kingdom follows VATsystemofindirecttaxationongoodsandservices.VATisleviedonmostgoodsandservicesprovidedbyregisteredbusinessesintheUKandsomegoodsandservices imported fromoutside theEuropeanUnion.TherearethreeratesofVATinUKnamelythestandardrate,reducedrateandzerorate.ThestandardrateofVATincreasedto20percenton4January2011(from17.5percent)9.

Australia - In Australia, GST is a broad salestax of 10 percent on most goods and servicestransactions10. It isavalueaddedtax,notasalestax,inthatitisrefundedtoallpartiesinthechainofproductionotherthanthefinalconsumer.Financialsupplies;Saleof residentialpremises;Residentialrent; Precious metals; School tuckshops andcanteensifsuppliedbynon-profitbody,Fundraisingeventsconductedbycharitiesareexempted.

IV. GST – The Journey So Far

Implementinganewtax,encompassingbothgoodsand services, to be implemented by the Centre,29States and 2UnionTerritories, in a large and

5. 2012 (286) E.L.T. 321 (S.C.).

6. Excise Tax Act

7. Government of Canada, Taxes, Duties and Fees (GST/HST) Regulations, viewed 7 March 2018, http://laws-lois.justice.gc.ca/eng/regulations/SOR-91-34/index.html

8. Otto Eckstein, Comparison of European and United States Tax Structures and Growth Implications, The Role of Direct and Indirect Taxes in the Federal Reserve System, Princeton University Press, pp. p. 217 - 293

9. Government of UK, Businesses and charging VAT, viewed 7 March 2018, https://www.gov.uk/vat-businesses/vat-rates

10. A New Tax System (Goods and Services Tax) Act, 1999.


complex federalsystem,viaaConstitution (101stAmendment) Act 2016, following the passage ofConstitution122ndAmendmentBillrequiringbroadpoliticalconsensus,affectingmillionsoftaxpayingentities, and marshalling the latest technology touse and improve tax implementation capability,is perhaps unprecedented in modern global taxhistory. This unprecedented move has beendebatedanddiscussedalloverthecountry.

The Economic Report of the President ofFebruary 2018, among other economic reformsmade certain observations on the growth ofIndianeconomy.TheintroductioninJuly2017ofa single, countrywide sales tax replaced a vastnumberofdifferentstateandlocaltaxrates,andhas created short-term uncertainty,” the reportnoted11. Thus the uncertainty emerging in Indiadue toGST has caught the attention of peopleevenoutsideIndia.

The implementation of the pan-India GST isexpectedtohelpcreateasinglenationalmarketandenhance the efficiency of intra-Indian movementof goodsandservices12.Thiswas theobservationmadebyIMFinitsrecent2018reporttitledIndia-Financialsectorassessmentprogram.

A major difficulty faced by auditors and alliedprofessionalswas due to the fact thatGST lawcame into effect from 1st July 2017 which isafter 3 months of the Financial Year 2017-18commencement date which is 1st April 2017.Duetowhichtheaccountingandthecalculationsinvolved had both the pre GST and the GSTlaw taken into consideration. For instance, inthepreGSTregimemanufacturers included theamount paid towards Central Sales Tax in thecostofproductionbecausetheydidnotgetanyinput tax credit for the same. Whereas underGST,manufacturersdidnotaddtheamountpaidtowards IGSTas theywereentitled to input tax

credit.Thismadethecalculationsandthesystemmorecomplex.AnidealsolutionwastohaveGSTimplemented from thebeginningof thefinancialyearsothatauniformitycouldbemaintained.

Due to themultiple slabs, it has become difficultfor traderstodeterminewhichgoodsget taxedatwhich rate. Reducing the number of slabs wouldalsobehelpful as itwould reduce thecomplexityofthesystem.

The inclusion of real estate sector, petroleumproducts has been on the to-do list of the GSTCouncil since a very long time. The idea of onenationonetaxissaidtobeameredelusionasnotbringingvariousgoodsandserviceswithinitsambitwas not envisaged. Keeping natural gas out oftheGSTiscausinghardshipsandhavingadverseimpact on the producers as it is increasing theircosts.

In a case before the BombayHighCourt,Abicor & Binzel Technoweld Pvt. Ltd. v Union of India13 provisionalregistrationnumberundertheCGSTAct,2017andtheMaharashtraGoodsandServicesTaxAct,2017wasgrantedbutthepetitionerwasunableto access its online profile on the GST network.Among other grievances raised by the petitionerwasoneofnotbeingabletoclaiminputtaxcredit.TheCourtmadethefollowingobservationsduringthecourseofthejudgment:

“A tax like Goods and Services Tax was highly publicised and termed as popular. We had yet not seen a celebration of new tax regime, but that has followed with great hue and cry. These celebrations mean nothing. The special sessions of Parliament or special or extraordinary meetings of Council would mean nothing to the assessees unless they obtain easy access to the website and portals. The regime is not tax friendly.(Emphasissupplied)”14

V. Conclusion

Itmightbearguedthatayear’stimeisnotsufficienttodrawaconclusionandforma judgmentontheeffectiveness of GST, but we need to consider


11. President Donald J. Trump, 2018, Economic Report of the President Together with The Annual Report of the Council of Economic Advisers, viewed 7 March 2018, https://www.whitehouse.gov/wp-content/uploads/2018/02/ERP_2018_Final-FINAL.pdf

12. International Monetary Fund, Detailed Assessment of Observance of the Basel Core Principles For Effective Banking Supervision, 18/4, January 2018.

13. Writ Petition (L) No. 2230 OF 2018.

14. Ibid.


CASE LAWErstwhile Companies Act, 1956 Official liquidator does not have jurisdiction to adjudicate the claim of the secured creditor permitted to stand outside the liquidation proceeding.Theofficial liquidator doesnothave jurisdictiontoascertainoradjudicatetheclaimofasecuredcreditorwhohasbeenpermittedbytheCompanyJudgetostandoutsidetheliquidationproceedingwithlibertytopursuetheremedyasperstatutoryrights available under the State FinancialCorporationsAct,subjectonly to theconditionsimposedbythecourt–Laxmi Fibres Ltd.v.A P Industrial Dev. Corpn. Ltd. CANo.5805of2005&CANos.5803and5804of2005dated7thAugust2015.

Companies Act, 2013Where the scheme has complied with the legal requirements on amalgamation, it is liable to be sanctioned.Allotment of shares at a premiumand creditedas fully paid up by the transferee-company ina scheme of amalgamation with two privatecompanies is no ground for non-sanctioningof the scheme by the Tribunal and if schemecomplies with legal requirements, it has to besanctioned. [Ritemed Pharma Retail (P.) Ltd. v.Official Liquidator, (NCLAT) CA (AT) No.60 of2018dated3rdMay2018]

Refusal to register transfer of shares can be permitted on the ground of violation of law or any other sufficient cause and conflict of interest can also be a cause.Where the appellant-company takes specificgrounds in the appeal raising questions oflaw regarding its right to refuse registration oftransfer of shares on sufficient ground and theappeal being a statutory appeal under section10FoftheCompaniesAct,1956,theHighCourtshouldhaveconsidered thesameamongotherquestionsoflaw.[Mackintosh Burn Ltd.v.Sarkar & Chowdhury Enterprises (P.) Ltd.,(SC)CANos.3322-3323of2018,27thMarch2018].

KNOWLEDGE UPDATEthe fact that thisreformhadbeen inmakingforadecadeandahalf15.

There is general perception that human beingsresist change.WhenGST came into effect smalltradersreiteratedthisperception,theyopposedthisreformonvariousgroundswithoutappreciatingthebenefits.Technologicalhandicapwasamajorissueand probably still remains to be, while increasedcompliances had a corresponding increase intheneedof appointingprofessionals for theworkwhichinturnincreasedtheoverheads.Thetradersclaimed that they have not benefitted from GSTas much as they have suffered the burden ofoverheadsandcompliances.

AftertheintroductionofGST,severalIndianstateshave lost theirautonomy inpublicpolicyowing toareduction intheir taxrevenuebecausetheGSTsubsumesstatetaxessuchasthevalueaddedtax(VAT,sales tax,and luxury tax.For this insecuritythe Central Government decided to compensatethe States by providing for 14 percent nominalgrowtheveryyearforaperiodoffiveyears.

DuetotheexclusionofpetrolandpetroleumproductsfromtheambitofGST,thereisabreakinthevaluechain across and this has resulted in abundantinconsistencyandincreaseinpricesfortraders.

Whileontheotherhandonemustnot ignorethatoneofthemostprimitiveandimportantsectorsinthecountrynamelythetextileandclothingsectorisnowfullypartofthetaxnet.Previously,somepartsofthevaluechain,especiallyfabrics,wereoutsidethetaxnet,leadingtoinformalisationandevasion.

Under the GST, there is seamless flow andavailability of a common set of data to both theCentre and states, making tax collections moreeffective.Notwithstandingthebenefits,Indiaasthefastestgrowingeconomy in theworlddeservesasystemwhichifnotflawless,thenisatleastneartobeingperfect.

Asitissaidthatit’snevertoolate,thechangeshavebeenmadeandarestillbeingmadeandanendeavourismadetomakeGSTtrulyaboonasenvisaged.

nnn

15. The idea of goods and services tax (GST) was first mooted in India in the year 2000.



Applicability

Section51oftheCentralGoodsandServicesTaxAct, 2017 (‘CGSTAct’) provides for deduction ofTDS in certain circumstances andmandates fourspecified recipients fordeductionof taxatsourceundertheGST.

n Department or establishment of Central orStateGovernment[Section51(1)(a)]

n LocalAuthority[Section51(b)]

n Governmentagencies[Section51(1)(c)]

n Notified persons/category of persons[Section51(1)(d)]

Local Authority

‘LocalAuthority’isdefinedinclause(69)ofsection2ofCGSTActandmeansthefollowing:-

n “Panchayat “as defined in clause (d) ofarticle243ofConstitution.

n “Muncipality” as defined in clause (e) ofarticle243PofConstitution.

n Muncipal committee, a Zilla Parishad, aDistrict Board, and any other authoritylegalentitledto,orentrustedbythecentralGovernmentor any stateGovernmentwithcontrolormanagementofamunicipaloralocalfund.

n CantonmentBoardasdefinedinsection3oftheCantonmentAct2006.

n Regional council or a District CouncilconstitutedundertheSixthScheduletotheConstitution.

n DevelopmentBoardconstitutedunderarticle371oftheconstitution;or

n Regional Council constituted under article371Aoftheconstitution;

Notified Persons

Following are the Notified persons/category ofpersons:

n AnauthorityorboardoranyotherbodysetupbyanActofParliamentoraStateLegislatureorestablishedbyanyGovernment,with51%or more participation by way of equity orcontrol.

n Society established by the CentralGovernment or State Government or local authorityunder thesociety registrationAct,1860

n Publicsectorundertaking.

Rate of Tax and Threshold Limit

The tax would be deducted at 2 per cent of thepaymentmadetosupplierofthetaxablegoodsorservices, if the total value of such supply, undera contract, exceeds Rs.2.5 lakh. The TDS iscalculated on the value excluding CGST, SGST,UTGST, IGSTandCess indicated in the invoice).TheTDSisapplicableeveniftheindividualsupplies

Tax Deduction at Source Under GST Regime

Girishkumar P G – CMA, Accounts Officer, BSNL Palakkad


Tax deduction at source (TDS) is a tax collection system wherein the tax liability is paid in part by the recipient of the goods or service at the time of making payment to the supplier. Similar to TDS under the Income-tax Act 1961,it is also a mechanism to prevent tax evasion and introduces checks and balances and ensures regular cash flow to the Government. In this article, the author explains mechanism of tax deduction at source under the GST regime


may be less than Rs.2.5 lakh, but total value ofsupplyunderacontract ismorethanRs.2.5 lakh.If the value of the contract is more than Rs.2.5lakhandpayment ismade in installmentsof lessthanRs.2.5 lakh, in suchcasealsoTDS is tobedeductedat2percentagainsteachpayment.

Requirement of Registration for TDS Deductor

A person who is liable to deduct TDS has tocompulsorily register and there is no thresholdlimit for this. The registration under theGST canbeobtainedwithoutPANandbyusingtheexistingtaxdeductionandcollectionaccountnumber(TAN)issuedundertheIncome-taxAct.

The registration application for tax deductor canbefiledelectronicallybysubmittingadulysignedapplication inFormGSTREG-07. In theplaceofPAN, such persons will indicate their TAN in theregistration application. Obtaining TAN issuedundertheIncome-taxActismandatory.

Forregistrationastaxdeductor,theapplicantmusthavethefollowing:

n ValidTAN

n Validmobilenumber

n Valide-mailID

n Prescribeddocumentsandinformationonallmandatoryfieldsasrequiredforregistration

n Placeofbusiness

n Authorizedsignatorywithvaliddetails

Theregistrationapplicationoftheapplicantwillthenbe processed and approved by the relevant taxofficerafterwhichhewillbeissuedtheregistrationcertificatecontainingthenumber.

Time-limit for Payment

Thedeductorshallberequiredtopaytheamountdeductedas the taxwithin 10daysafter the endof themonth inwhichsuchdeduction ismade. ItshallbepaidtotheCentralGovernmentforCGST/IGSTandStateGovernmentforSGST/UTGST.

Filing of TDS Return

ThepersondeductingtaxisrequiredtofileaTDS

returninformGSTR-7within10daysfromtheendof themonth.Whilefiling the return thedeductedamountwillbereflectedinelectronicledgerofthedeductee.

TDS Certificate

SimilartoIncome-taxAct,underGSTalsothepersondeductingtaxhastoissuetheTDScertificatetothedeductee.GSTR-7AistheformforTDScertificateanditistobeissuedtotheconcernedpersonwithin5 days of depositing the tax to the government.FailuretodosowillmakethepersonliabletopayalatefeeofRs.100perdayuptoamaximumofRs.5000.TheTDScertificatecontainsthefollowing:

n Contractvalue

n Rateofdeduction

n Amountdeducted

n AmountpaidtotheappropriateGovernment

n Suchparticularsasmaybeprescribedinthisbehalf

Refund of TDS

Ifanyexcessamount isdeductedandpaidtothegovernment, a refund can be claimed. However,if the deducted amount is already added to theelectroniccash ledgerof thesupplier, theamountsoadded cannot begot backasa refundby thedeductor. Deductee can claim a refund of taxsubjecttorefundprovisionsoftheAct.

Circumstances When TDS Not to Be Deducted at Sources Under GST

TDSisnottobedeductedifthelocationofsupplierandplaceofsupplybotharesamebutitisdifferentfromthatoftherecipient.Ifthelocationofsupplieraswell as the place of supply are in Kerala andthelocationofrecipientisinTamilnadu.Thesupplywould be considered as intra-State supply andCentraltaxandStatetaxwouldbelevied.Insuchcases, transferofTDS(Central tax+State taxofTamilNaduState)tothecashledgerofthesupplier(Centraltax+StatetaxofKeralaState)wouldbedifficult.SoTDSwouldnotbededucted.Thiswouldbeclearerasperthefollowingchart.



SUPPLIER Mr. X. KERALA

PLACES OF SUPPLY

KERALA

PLACES OF RECEIPEINT TAMIL NADU

INTER STATE SUPPLY

Mr. Y. KERALA Mr. Z.TAMIL NADU TDS REQUIRED

INTRA STATE SUPPLY INTRA STATE SUPPLY

TDS REQUIRED NO TDS REQUIRED

In the above chart the place of supplier X isKerala. When he supplies goods or service inKerala it becomes an intra-state supply. Whenhesupplies toMr.Y the recipient inKerala, theTDS is applicable whereas when he suppliesto Mr.Z, the recipient in Tamilnadu, the TDS isnotapplicablesincethe locationofsupplierandplaceofsupplybotharesamebut it isdifferentfromthatof therecipient. Inthethird instanceifMr. X supplies toTamilnadu, it will be an inter-statesupplyattractingTDS.

Penalty

n IfTDSisnotdeducted,interestistobepaidalongwiththeTDSamount;elsetheamountshall be determined and recovered as perthelaw

n If TDS certificate is not issued or delayedbeyond the prescribed period of 5 days,latefeeofRs.100istobechargedperdaysubject toamaximumofRs.5000 is tobecharged.

n If TDS is deducted but not paid to theGovernment or paid later than 10th of the

succeedingmonth,interesttobepaidalongwiththeTDSamount;elsetheamountshallbedeterminedandrecoveredasperthelaw.

n IfTDS returnsare filedafter theduedate,latefeeofRs.100istobechargedforeveryday during which such failure continues,subjecttoamaximumamountofRs.5000.

Illustration

n Public sector undertaking (PSU) made acontractwithABforthetotalcontractvalueofRs.10lakh.Afterthecompletionofworks,ABissuedinvoiceforRs.11.8lakh(Rs.10lakhplusGSTat18percent).Whilemakingpayment to thevendor/contractor, thePSUhastodeductRs.20,000asTDS(taxat2percentonRs.10lakhexcludingGST)underGST,inadditiontoTDSdeductedaspertheIncome-tax Act. The TDS deducted underIncome-taxActwillbereflectedinformForm26ASwhileTDSunderGSTwillbereflectedinelectronicledgerofthevendorwhichmaybe adjusted against payment of other taxliabilityunderGST.

n Suppose Government Department makespaymenton15thOctober,thetaxdeductedunderGSThastoberemittedonorbefore10thNovember.PSUhastofilereturnonorbefore10thNovember(againstthedeductiondone inOctoberand itspayment)andhasto issue TDS certificate on or before 15thNovember to thevendor/contractor.TDS isapplicable even if the PSU is making partpaymentoflessthanRs.2.5LakhsincetotalcontractvalueismorethanRs.2.5lakh.

n Wherethetaxdeductorfailstodeductthetaxinaccordancewithprovisionofsection51(1)oftheCGSTActordeductsanamountwhichislesstheamountrequiredtobedeductedunderthe section or if he fails to pay the amountdeductedastaxtoGovernmentundersection51(2), he shall be liable to pay a penalty ofRs.10000oranamountequivalenttothetaxevadedorthetaxnotdeductedundersection51orshortdeductedordeductedbutnotpaidtotheGovernment.



Provisions Regarding Issue of Show Cause Notice (SCN)

n Section 73 of the CGSTAct, provides forissueofshowcausenoticefordemandoftheamountnotpaidorshortpaidorerroneouslyrefunded,orinputtaxcredithasbeenwronglyavailed or utilized for any reason exceptother than fraud or willful misstatementor suppression of facts to evade tax. Thenoticeforpaymentoftaxalongwithinterestpayableandpenaltytobeissuedatleast3months prior to the time limit specified forissuance of order. Statement to be issuedfordemand for subsequentperiod if noticefor previous period on similar grounds hasbeen issued. No notice shall be served ifentireamountalongwithinterestispaidonownascertainmentby theparty.PenaltyofRs.10000or10percentoftaxwhicheverishighermaybeimposed.

n Order tobe issuedwithin3years from thedate of due date for furnishing of annualreturnforthesubjectfinancialyear.

n Wherenon-paymentorshortpaymentoftaxisduetoreasonoffraud,willfulmisstatementor suppression of facts, demand for tax,interestandpenaltyequaltothetaxamounthas to bemade. Issueof notice at least 6months prior to the time limit specified forissueoforder.

n No notice shall be served if entire amountalong with interest and penalty equivalentto 15 per cent of tax is paid on ownascertainmentbytheparty.

n Evenafterissuanceofnotice,optiontopaytax,interestandpenaltyequivalentto25percentoftaxamountwithin30daysofissueofnotice.

n The time limit fororder is5years from theduedate of furnishing ofAnnualReturn orwithin5yearsoferroneousfound.

Points At a Glance

n ATDSdeductorhastocompulsorilyregisterwithoutanythresholdlimit

n TANalreadyissuedbyITdepartmentcanbeusedwhileapplyingforGSTregistration

n No tax deduction is required wherethelocationofsupplierandplaceofsupplyisdifferentfromtheStateoftheregistrationoftherecipient

n Thetaxwouldbedeductedat2percentofthepaymentmadetosupplierofthetaxablegoodsorservices,i.e.,1percentCGST+1percentSGST/UTGSor2percentIGST

n TDSisapplicableifthetotalvalueofsupplyof goods or service, under a contract,exceedsRs.2.5lakh

n TDS is calculated on the value excludingCGST, SGST, UTGST, IGST and Cessindicatedintheinvoice

n TDS is deducted at the time of makingpaymenttothevendor

n DeductorsneedtoremitsuchTDScollectedbythe10thdayofthemonthsucceedingthemonthinwhichTDSwascollected

n DeductorsrequiretofileaTDSreturninformGSTR-7within10daysfromtheendofthemonth

n Deductors require to issue TDS certificateinformGSTR-7Atothededucteeswithin5daysofdepositingthetaxtothegovernment

n IfthedeductorissuesTDScertificatewithin5 days of remittance, the deductor has topayalatefeeofRs.100perdayfromthe6thdayuntilthedayhefurnishesthecertificatesubjecttothemaximumlatefeeofRs.5000

n Rateofinterestfordelayedpaymentisupto18percentperyear,theexactrateofinterestpayableisyettobenotified

n The refund to the deductor or the deducteearising on account of excess or erroneousdeduction shall be dealt with in accordancewiththeprovisionsofSection54,providedthatnorefundtothedeductorshallbegranted,iftheamountdeductedhasbeencreditedtotheelectroniccashledgerofthedeductee.

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Neha Somani – ACA, B.COM


Rectification of Mistakes apparent from Record

In this article the author explains provisions of section 161 of the CGST Act, 2017 which deals with rectification of mistakes or errors apparent on the face of record.

What is ‘Mistake Apparent from Record’

The phrase ‘mistake apparent from record’ hasnot been defined under the CGSTAct. It meansanobviousmistake.Therearedetailedprovisionsprovided for this concept under section 154 ofIncome-taxAct, 1961.The ‘termmistake’ in legalperspective can be understood to mean thefollowing:

n Misreadingaclearprovisionisamistake

n ApplicationofawrongprovisionofAct

n Applyinganinapplicableprovision

n Overlookingamandatoryprovision

n Non-following of decision of jurisdictionalHighCourt

Theterm‘record’canbeunderstoodtomeanrecordof the case comprising the whole proceedingsincluding documents and materials produced bythepartiesandtakenonrecordbytheauthorities,which were available at the time of passing oforder which is the subject matter of rectificationproceeding.

ExampleRamIndustrieshadalreadypaidataxofINR31.40lakh.Copiesofpaymentchallanofthesameweresubmittedtoassessingofficer.WhilecalculatingthedemandofRamIndustries,AssessingofficergaveacreditofINR29lakhspayment.ThisisamistakeapparentfromrecordandproceedingsforcorrectingthispaymentfromRs.29lakhtoRs.31.40lakhwill

constitute proceedings of rectification of mistakeapparentfromrecord.

Rectification of Apparent Mistakes from Record

Section 161 deals with rectification of mistakeor errors apparent from record. It provides thattheauthoritywhohas issuedanydecision,order,summon,noticeoranycertificatemay rectifyanymistakeapparentfromrecord insuchdocuments.Suchrectificationbysuchauthoritycanbedone:

n Suo-motobysuchauthority

n On bringing to notice of such authority byGSTofficial

n Onbringingtonoticebytheaffectedperson.

Time Limit for Rectification of any Mistake/Error Apparent from Record

Rectification of any mistake/error apparent fromrecordcanbedonewithinaperiodofthreemonthsofissuanceofsuchdocument(anydecision,order,summon, notice or any certificate) by authority. Itmaybenotedthatatimelimitofthreemonthsisallowedfortheaffectedpersontobringtoattentionany such error or mistake. This time limit doesnot apply to a CGST/SGST officer from bringingit to the attention to the issuing authority or formakingvoluntarily rectification.However, no suchrectification is permitted after 6 months from thedateofitsissuance.


Maximum Period Allowed for Rectification of Mistake

Anyrectificationdoneasperprovisionsofsection161canbedonewithinmaximumperiodof sixmonthsfromthedateof issueofsuchdocument.However,thisperiodofsixmonthswillnotbeapplicablewherethe rectification ispurely in thenatureof correctionofaclerical,arithmeticalerrorormistakearisingfromanyaccidentalsliporomission.

Rectification Effecting Increase of Liability of Taxpayer

Incaseswheretheresultofmakingthecorrectionresults in increasing the liability or reducing the

refundofataxableperson,itcanbedoneonlyafterfollowing the principles of natural justice.Withoutgivingnoticetoaffectedpersonandwithoutgivinghimanopportunityofhearing,nosuchrectificationcanbeeffected.

Substantive Rectification in Document while Rectifying Error

Whilecorrectinganymistakeundersection161,norectificationcanbemadeinthesubstantiveportionof the document. In the garb of correcting themistake, the competent authority cannot changehisopinioninrespectofthematteralreadydecidedbyhim.

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Rectification of Mistakes apparent from Record

KNOWLEDGE UPDATEINSOLVENCY AND BANKRUPTCY LAW

IBBI Amends the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016InsolvencyandBankruptcyBoardofIndia(IBBI)has notified the Insolvency and BankruptcyBoard of India (Insolvency Resolution Processfor Corporate Persons) (Third Amendment)Regulations, 2018. The following are salientamendmentstotheregulations:

nWhereverthecorporatedebtorhasclassesofcreditorshavingatleasttencreditorsintheclass,the interim resolution professional shall offer achoiceofthreeinsolvencyprofessionalstoactastheauthorisedrepresentativeofcreditorsineachclass.

nAnapplicationforwithdrawalofanapplicationadmitted under section 7, 9 or 10 of theCode(for closure of corporate insolvency resolutionprocess) may be submitted to the interimresolution professional or the resolutionprofessional,asthecasemaybe,beforeissueofinvitationforexpressionofinterest.

n Whererateof interesthasnotbeenagreedtobetween theparties incaseofcreditors inaclass,thevotingshareofsuchacreditorshallbe

inproportiontothefinancialdebtthatincludesaninterestattherateofeightpercentperannum.

n Where the appointment of resolutionprofessional is delayed, the interim resolutionprofessional shall perform the functions of theresolutionprofessionalfromthefortiethdayoftheinsolvencycommencementdate tilla resolutionprofessionalisappointed.

nAmeetingoftheCoCshallbecalledbygivingnotlessthanfivedays’noticeinwritingtoeveryparticipant.TheCoCmay,however, reduce thenoticeperiodfromfivedaystosuchotherperiodofnotlessthanforty-eighthourswherethereisanyauthorisedrepresentativeandtotwenty-fourhoursinallothercases.

n Theresolutionprofessionalshallformanopinionwhetherthecorporatedebtorhasbeensubjectedtocertaintransactions(preferentialtransactions,undervaluedtransactions,extortionatetransactionsorfraudulenttransactions)by75thday.

n The resolution professional shall publish aninvitation forexpressionof interest (EoI)by the75th day from the insolvency commencementdate.

n The resolution professional shall issue theinformationmemorandum,theevaluationmatrixand the request for resolution plans (RFRP),withinfivedaysofissueoftheprovisionallisttotheprospectiveresolutionapplicantsandallowatleast30daysforsubmissionofresolutionplans.


Statutory Provisions on Documents and Notices Under GST

Dr. Sanjiv Agarwal – FCA, FCS


In this article, the author delves into the provisions of section 169 of the Centre Goods and Services Tax Act, 2017 which prescribes methods for service of notice, etc. in certain circumstances.

Methods of Service of Documents

Variousmethodsofserviceofanydecision,notice,order,summonoranyothercommunicationundertheCentralGoodsandServices taxAct, 2017orRules made thereunder have been prescribed insection169,whichareasfollows:

nBy giving or tendering it directly or through amessenger or courier to the addressee or thetaxablepersonortohismanagerortopersondulyauthorized or an advocate or a tax practitionerholdingauthoritytoappearintheproceedingonbehalf of the taxpayer or to a person regularlyemployedbyhiminconnectionwiththebusiness,ortoanyadultmemberoffamilyresidingwiththetaxpayer.

nByregisteredpostorspeedpostorcourierwithacknowledgementdue,tothepersonforwhomitisintendedorhisauthorisedagent,ifanyathislastknownplaceofbusinessorresidence.

nBy sending a communication to his e-mailaddress,providedatthetimeofregistrationorasamendedfromtimetotime.

nBymakingitavailableoncommonportal.

nBypublication inanewspapercirculating in thelocality of taxpayeror theperson towhom it isissuedislastknowntohaveresided,carriedonbusinessorpersonallyworkedforgain.

nIfnoneoftheaboveispracticable,byaffixingitinsomeconspicuousplaceonhislastknownplaceofbusinessorresidenceaddress.

nIfsuchaffixingisalsonotpracticable,byaffixingacopythereofonthenoticeboardoftheofficerwhohaspassedsuchdecisionororderorissuedsuchsummonsornotice.

The meaning of terms such as authorisedrepresentative,commonportal,taxpractitioneretcshallbegovernedbythedefinitionsprovidedintheActorrules,asthecasemaybe.

Erstwhile Case Law on Service of Notice

Forserviceof showcausenoticesororders,etc,following judicialpronouncementsundererstwhilelawarerelevant:

nInSaradha Travelsv.CST,(2014)47GST334/[2015] 37 STR 433, it was held that pastingadjudicationorderonpremisesofassesseeundera Mahazar before two independent witnesses,when assessee was not available in premisesandpremiseswasalsolocked,isavalidserviceunder section 37(1)(b) of Central Excise Act,1944.

nIn Saral Wire Craft Pvt. Ltd. v. CC,CE & ST [2015] 322 ELT 192/ 51 GST 697, whereadjudication order was served on kitchen boyof theassessee, itwasheld tobenotaproperservice.Aspersection37CoftheCentralExciseAct,1944,noticemustbeserved to thepersonforwhom it is intendedorhisauthorizedagentunder proof of acknowledgment. It is the basicprinciple of law long settled that if themannerofdoingaparticularactisprescribedunderanystatute, the act must be done in that manneror not at all. The judgment lays down the pre-requisiteforissuanceofnotice.Anynoticeissuedinviolationofsection37Cisnotvalid.Itisworthmentioning that section 37C has been madeapplicabletoservicetaxalsobyvirtueofsection83oftheFinanceAct,1994.Hence,theprinciplelaiddowninthejudgmentshallmutatismutandisapplytonoticeservedinservicetaxcasesalso.


nInVentrapathi Financial Servicesv.Superintendent of Central Excise [2015]39STR956(AP),whereex parte adjudication order, show cause noticeand other communications were sent at wrongaddress and petitioner came to know onlywhenbankinformedaboutrecoveryproceedings,itwasheldthatprinciplesofnaturaljusticewereviolatedandserviceoforderwasnotintermsofstatutoryprovisions and as such impugned order was setaside.Adjudication proceedings were ordered tobecompletedafreshwithinthreemonths.

nIn CST v. Sunil Haribhau Pote [2017] 80taxmann.com 366 (Bom), assessee wasengagedinmanufactureandsaleofedibleoils,thedepartmentservednoticeatcorrectaddressof assessee, but it was returned by the postalauthorities with the remark, that the addressesrefusedtoacceptthenotice.Itwasheldthattherewasnodisputeabouthisidentity,soitamountedtosufficientandadequateserviceofnotice i.e.,deemedtobeserved.

What Documents Require Service

Servicemaybe required in relation to anyof thefollowing:

n anydecision n any order n summons n notice other communication such as letter of enquiry,noticeofhearing,seekingdetailsorinformation,auditreport,recoverynoticeetc.

Thesetermshavenotbeendefinedbutshalltaketheirmeanings underGeneralClausesAct. Suchcommunicationsare required foradministrationofthe tax law under various provisions. However,noticemeansshowcausenoticeasreferredto insection28(1)ofCustomsAct,1962.

When Deemed to be Served

Every decision, order, summon, notice or anycommunication shall be deemed to have beenservedtotheaddresseeonthedateonwhichitistenderedorpublishedoracopythereofisaffixedinthemannerasprovidedinsection169(1).

Service in Case of Registered or Speed Post

Anydecision,order,summons,noticeoranyothercommunicationshallbedeemedtobeservedwheresuchcommunication issentby registeredpostorspeedpostintermsofsection169(3).Accordingly,whenanysuchcommunicationissentbyregisteredpost or speed post, it shall be deemed to havebeenreceivedbytheaddresseeattheexpiryoftheperiod normally taken by a registered/speed postletterintransitunlesscontraryisproved.Followingjudicial pronouncements can be relied upon forcommunicationssentbyspeedpostor registeredpost.

nIn Mirzapur Electrical Industries Ltd. v. CCE (2013)40STT282 (2013)35 taxmann.com15(All),sinceobjectofsendingpostby registeredpostwastokeeparecord,whichwasalsoservedby sending an article by speed post throughsame agency, ‘Registered Post’ and ‘SpeedPost’ were considered to be same modes ofservice and sending order by speed post washeld tobeavalidcompliancewithsection37Cof theCentral ExciseAct, 1944.Hence,whereassessee had not given forwarding addressingforcommunication,envelopewasreturnedbackundelivered and revenue made an attempt toserveassesseebypastingorderonfactorygate,itwasconsideredtobevalidcompliance.

nInJay Balaji Jyoti Steels Ltd.v.CESTAT,[2015]37STR673(Ori),whereorderwassentbyspeedpost,itwasheldthatpostofficereceiptforbothbyregisteredpostandbyspeedposthavetobetreatedasregisteredpostinviewofsection28oftheIndianPostOfficeAct,1898.Onlydifferencebetween the two is that charges payable arenormallyhigherfor‘speedpost’fordeliveryatanearlydate.Further,insertionof‘orbyspeedpostwithproofofdelivery’afterthewords‘sendingitbyregisteredpostwithacknowledgementdue’insection37C(1)(a)oftheCentralExciseAct,1944with effect from 10th May, 2013 is clarificatoryandproceduralamendment. It is curativesincevarious courts had held that communication ofnotices throughspeedpostwas inconsonancewithlaw.

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Statutory Provisions on Documents and Notices Under GST


COMPANY LAW

Commencement of Sections of the Companies (Amendment) Act, 2017VideSO3684(E)dated27thJuly2018,theCentralGovernmenthasenforcedSections5and6oftheCompanies(Amendment)Act,2017witheffectfrom27thJuly,2018.

Companies (Registration of Charges) (Amendment) Rules, 2018Central Government has amended the Companies(RegistrationofCharges)Rules,2014bysubstitutingthewords“shallbefiled”forthewords“andfiled”insub-rule (1) of rule 3,sub-rule (1) of rule 8 and thewords“withinaperiodofthreehundreddays”forthewords“withinthirtydays”insub-rule(1)ofrule12.

Appointment of Inspectors for Compliance of Investor Education and Protection FundCentral Government has established CentralizedScrutiny and Prosecution Mechanism (CSPM)andappointedofficersofMinistryasInspectorsforcompliance of Investor Education and ProtectionFund.

Constitution of Committee to Review the Offences under the Companies Act, 2013 CentralGovernmenthasconstitutedaCommitteetoreviewoffencesCompaniesAct,2013undertheChairmanship of Secretary, Ministry of CorporateAffairs.TheCommitteehasto examine thenatureofall‘’acts’’categorizedascompoundableoffencesviz.offencespunishablewithfineonlyorpunishablewith fine or imprisonment or both under theCompaniesAct,2013andrecommendifanyofsuch‘’acts’’maybere-categorizedas‘’acts’’whichattractcivilliabilitieswhereinthecompanyandits‘’officersin default’’ are liable for penalty; to review theprovisions relating tonon-compoundableoffencesandrecommendwhetheranysuchprovisionsneedtobere-categorizedascompoundableoffence; toexaminetheexistingmechanismoflevyofpenaltyunder theCompaniesAct, 2013and suggest anyimprovementsthereonetc.

KNOWLEDGE UPDATE

Companies (Registration Offices and Fees) (Third Amendment) Rules, 2018CentralGovernmenthasamendedtheCompanies(Registration Offices and Fees) Rules, 2014 byinsertingitem(VII)afteritem(VI)[i.e.feeforfilinge-FormDIR-3KYCunderrule12AoftheCompanies(AppointmentandQualificationofDirectors)Rules,2014] relating to Fees for Removal of Names ofCompaniesfromtheRegistrarofCompaniesundersection 248 (2) of theAct. [Note: For the current financial (2018-2019), no fee shall be chargeable till the 31st August, 2018 and fee of Rs.5000 shall be payable on or after the 1st September, 2018].

Companies (Authorised to Register) (Second Amendment) Rules, 2018VideNotificationNo.G.S.R.613(E)dated5thJuly,2018,CentralGovernmenthasnotifiedCompanies(AuthorisedtoRegister) (Amendment)Rule,2018toamendthePrincipalRules,2014bysubstitutingrule2(1),4(1)/(2)andrule5.

Companies (Appointment and Qualification of Directors) (Fourth Amendment) Rules, 2018Vide notification no. G.S.R. 615(E) dated 5thJuly, 2018, Central Government has amendedthe Companies (Appointment and Qualificationof Directors) Rules, 2014 by inserting rule 12A,which states that every individual who has beenallotted a Director Identification Number (DIN)ason31stMarchofafinancialyearasper theserulesshall,submite-formDIR-3-KYCtotheCentralGovernmentonorbefore30thApril of immediatenext financial year and accordingly inserted newform no. DIR-3-KYC. Every individual who has already been allotted a Director Identification Number (DIN) as at 31st March, 2018, shall submit e-form DIR-3 KYC on or before 31st August, 2018.

Companies (Acceptance of Deposits) (Amendment) Rules, 2018Vide notification no. G.S.R. 612(E) dated 5thJuly, 2018, Central Government has amendedthe Companies (Acceptance of Deposits) Rules,2014bysubstitutingFormsDPT-1andDPT-3andinsertingsecondprovisoinsub-rule(1)ofrule4.


New

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ICSI Notification No. 01 of 2018Introduction of New Syllabus for the Executive and

Professional Programmes of the CompanySecretaryship Course

T he Council of the Institute of Company Secretaries of India in exercise of the powers vested under clause (a) of sub-section (2) of Section 15 of the Company Secretaries Act, 1980, as amended by the Company Secretaries (Amendment)

Act, 2006 approved the new syllabus (Syllabus 2017) for the Executive and Professional Programmes of the Company Secretaryship Course.

The New Syllabus shall comprise of Eight papers at Executive Programme and Nine papers at Professional Programmes including one Paper to be opted by the students out of eight elective papers namely, (i) Banking – Law & Practice; (ii) Insurance- Law & Practice; (iii) Intellectual Property Rights- Laws and Practices; (iv) Forensic Audit; v) Direct Tax Laws & Practice; vi) Labour Laws & Practice; vii) Valuations & Business Modelling and viii) Insolvency- Law and Practice.

The nomenclature of eight papers of the Executive Programme & nine papers of Professional Programme including electives under the new syllabus are as under:

Executive Programme Professional ProgrammeModule – 1 Module-11. Jurisprudence, Interpretation & General Laws 1. Governance, Risk Management, Compliances and Ethics2. Company Law 2. Advanced Tax Laws3. Setting up of Business Entities and Closure 3. Drafting, Pleadings and Appearances4. Tax LawsModule – 2 Module – 25. Corporate & Management Accounting 4. Secretarial Audit, Compliance Management and Due Diligence6.Securities Laws & Capital Markets 5. Corporate Restructuring, Insolvency, Liquidation & Winding-up

7.Economic, Business and Commercial Laws 6. Resolution of Corporate Disputes, Non-Compliances & Remedies

8. Financial and Strategic ManagementModule – 37.Corporate Funding & Listings in Stock Exchanges8. Multidisciplinary Case Studies (The examination for this paper will be open book examination)9. Electives 1 paper out of below 8 papers9.1 Banking – Law & Practice9.2 Insurance– Law & Practice9.3 Intellectual Property Rights– Laws and Practices9.4 Forensic Audit9.5 Direct Tax Law & Practice9.6 Labour Laws & Practice9.7 Valuations & Business Modelling9.8 Insolvency – Law and Practice

(The examination for this paper will be open book examination)

The Scheme of Paper-wise exemption for switchover from Old Syllabus to New Syllabus is as under:

SCHEME OF PAPERWISE EXEMPTION FOR SWITCHOVER FROM OLD SYLLABUS TO NEW SYLLABUS

EXECUTIVE PROGRAMMEExisting Syllabus (2012) Paper-wise Exemption under New Syllabus (2017)

MODULE 1Company Law Module 1; Paper 2- Company Law

Cost and Management Accounting Module 2, Paper 5- Corporate and Management Accounting

Economic and Commercial Laws Module 2; Paper 7- Economic, Business and Commercial Laws

Tax Laws and Practice Module 1; Paper 4- Tax Laws


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Company Accounts and Auditing Practices Module 2, Paper 5- Corporate and Management Accounting

Capital Markets and Securities Laws Module 2; Paper 6- Securities Laws & Capital Markets

Industrial, Labour and General Laws Module 1; Paper 1- Jurisprudence, Interpretation and General Laws

PROFESSIONAL PROGRAMMEMODULE 1

Advanced Company Law and Practice Module 2; Paper 6 - Resolution of Corporate Disputes, Non-Compliances &Remedies

Secretarial Audit, Compliance Management and Due Diligence Module 2; Paper 4 - Secretarial Audit, Compliance Manage-ment and Due Diligence

Corporate Restructuring, Valuation and Insolvency Module 2; Paper 5 - Corporate Restructuring, Insolvency, Liqui-dations &Winding-up

MODULE 2Information Technology and Systems Audit No Exemption

Financial, Treasury and Forex Management Module-3, Paper- 7- Corporate Funding & Listings in Stock Exchanges

Ethics, Governance and Sustainability Module 1; Paper 1- Governance, Risk Management, Compli-ances and Ethics

MODULE 3Advanced Tax Laws and Practice Module 1; Paper 2 - Advanced Tax Laws

Drafting, Appearances and Pleadings Module 1; Paper 3 - Drafting, Pleadings and Appearances

Elective Subjects Module 3; Paper 9 - Elective paper

The objective of the course is to develop a cadre of Company Secretaries by imparting professional knowledge and training considered pre-requisite for functioning of a Company Secretary- whether in employment or in practice. The syllabus for the examination as set out gives the broad framework within which questions may be asked. The questions may not be necessarily restricted to specific wordings or nomenclature of any terms and legislative enactments contained therein. The field of business being in a constant flux, the candidates are expected to be thoroughly conversant with the latest developments in different areas, amendments to the laws or the corresponding provisions of any statutory modification or re-enactment thereof and judicial pronouncements related and relevant to the stated course contents. The Candidates are expected to keep track of and have intelligent grasp of the latest developments in the relevant areas that have taken place up to six months preceding the date of examination.

Each paper at the Executive and Professional Programme Examination will be of three hours duration and will carry 100 marks. The examination for the Paper 16: Multidisciplinary Case Studies and Paper 17: Elective Paper will be open book examination.

Further, students registered under Executive and Professional syllabus (2017) shall have to successfully complete a Pre-Examination Test to become eligible to enrol and appear in the Executive and Professional Examinations.

Applicability of New Syllabus for the Executive Programme Candidates

1. The first examination of the Executive Programme under the new syllabus shall be held in December, 20182. Candidates registered effective from 1st March, 2018 shall be examined under the new syllabus.3. Candidates registered prior to 1st March, 2018 shall be allowed to appear in the Executive Program Examination under

the old syllabus upto and including December, 2019.4. Candidates registered prior to 1st March, 2018 will be permitted to appear in the Executive Program Examination under

the new syllabus if they so opt.5. The last examination of the Executive Programme under the old syllabus shall be held in December, 20196. From and including June 2020, Executive Programme Examination shall be held under the new syllabus only.

Applicability of New Syllabus for the Professional Programme Students

1. The first examination of the Professional Programme under the new syllabus shall be held in June, 2019.2. Candidates registered effective from 1st September, 2018 shall be examined under new syllabus. 3. Candidates registered prior to 1st September, 2018 will be permitted to appear in the Professional Programme Examination

under the old syllabus upto and including June 2020.4. Candidates registered prior to 1st September, 2018 will be permitted to appear in the Professional Programme Examination

under the new syllabus if they so opt.5. The last examination of the Professional Programme under the old syllabus shall be held in June, 2020.6. From and including December 2020, Professional Programme Examination shall be held under the new syllabus only.

Detailed Syllabus for Executive and Professional Programme of ICSI Syllabus (2017) isas under :

Executive Programme Professional ProgrammeModule – 1 Module-11.Jurisprudence, Interpretation & General Laws 1. Governance, Risk Management, Compliances and Ethics

2. Company Law 2. Advanced Tax Laws

3. Setting up of Business Entities and Closure 3. Drafting, Pleadings and Appearances

4. Tax Laws

Module – 2 Module – 25. Corporate & Management Accounting 4. Secretarial Audit, Compliance Management and Due Diligence

6.Securities Laws & Capital Markets 5. Corporate Restructuring, Insolvency, Liquidation & Winding-up

7.Economic, Business and Commercial Laws 6. Resolution of Corporate Disputes, Non-Compliances & Remedies

8. Financial and Strategic Management

Module – 37. Corporate Funding & Listings in Stock Exchanges

8. Multidisciplinary Case Studies (The examination for this paper will be open book examination)

9. Electives 1 paper out of below 8 papers9.1 Banking – Law & Practice9.2 Insurance– Law & Practice9.3 Intellectual Property Rights– Laws and Practices9.4 Forensic Audit9.5 Direct Tax Law & Practice9.6 Labour Laws & Practice9.7 Valuations & Business Modelling9.8 Insolvency – Law and Practice

(The examination for this paper will be open book examination)

Papers under Executive ProgrammeExecutive Programme

Module 1Paper 1

Jurisprudence, Interpretation and General Laws (Max Marks 100)

ObjectiveTo provide understanding and working knowledge of sources of law, Constitution, legislative environment, interpretation of statutes and general laws.

Detailed Contents1. Sources of Law: Meaning of Law and its Significance; Relevance of Law to Civil Society; Jurisprudence & Legal Theory;

Schools of Law propounded by Austin, Dean Roscoe Pound, Salmond, Kelsen and Bentham; Statutes, Subordinate Legislation, Custom, Common Law, Precedent, Stare decisis.

2. Constitution of India: Broad Framework of the Constitution of India; Fundamental Rights, Directive Principles of State Policy and Fundamental Duties; Legislative framework and Powers of Union and States; Judicial framework; Executive/Administrative

Detailed Syllabus for Executive and Professional Programmes of ICSI Syllabus (2017)

SCHEME OF SYLLABUS

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