Tuesday, 31 October, 2017

Vistra India Update 338

October 16 - October 31, 2017

INCOME TAX

Transfer Pricing Documentation and Country-by-Country Reporting

In keeping with India’s commitment to implement the recommendations of 2015 Final Report on Action 13, titled “Transfer Pricing Documentation and Country – by - Country Reporting”, identified under the OECD Base Erosion and Profit Shifting (BEPS) Project, section 286 of the Income - tax Act, 1961 was inserted vide Finance Act, 2016, providing for furnishing of a Country – by - Country report in respect of an international group by its constituent or parent entity. Section 92D of the Act was also amended vide Finance Act, 2016 to provide for keeping and maintaining of Master File by every constituent entity of an international group, which was to be furnished as per rules prescribed in this regard. Consequent to the aforesaid amendments to the Act, the Central Government has notified rules 10DA, 10DB and Form nos. 3CEBA to 3CEBE in the Income - tax Rules, 1962, laying down the guidelines for maintaining and furnishing of transfer pricing documentation in the Master File and Country – by - Country report as detailed below

Condition

Form to be filed

Due date of filing

Remarks

1

2

3

4

Master file

 

 

(i) If the consolidated group revenue of the international group for the accounting year, exceeds Rs. 500 crore and

 

(ii) the aggregate value of international transactions,-

 

(A) during the accounting year, as per the books of accounts, exceeds Rs. 50 crore or

(B) in respect of purchase, sale, transfer, lease or use of intangible property during the accounting year, as per the books of accounts, exceeds Rs. 10 crore

Form No. 3CEAA

On or before the due date for furnishing the return of income as specified in sub-section (1) of section 139. For the accounting year 2016-17 it may be furnished at any time on or before the 31st March 2018.

(i) Part A of Form No. 3CEAA shall be furnished by every person, being a constituent entity of an international group, whether or not the conditions as provided in sub-rule (1) are satisfied.

 

(ii) Part B of Form No. 3CEAA shall be furnished by a person, being a constituent entity of an international group, in those cases where the conditions as provided in sub-rule (1) are satisfied.

Where there are more than one constituent entities resident in India of an international group then the report  may be furnished by that constituent entity which has been designated by the international group to furnish the said report or information

Form No. 3CEAA

On or before the due date for furnishing the return of income as specified in sub-section (1) of section 139. For the accounting year 2016-17 it may be furnished at any time on or before the 31st March 2018.

 

Form 3CEAB

At least thirty days before the due date of filing Form No. 3CEAA

 

Condition

Form to be filed

Due date of filing

Remarks

1

2

3

4

Country by Country report

 

 

 

 

Every constituent entity resident in India if its parent entity is not resident in India

Form No. 3CEAC

At least two months prior to the due date for furnishing Form 3CEAD.  Form 3CEAD has to be filed on or before the due date of filing the return of income as specified in sub section (1) of section 139

 

Every parent entity or the alternate reporting entity, as the case may be, resident in India and having consolidated group revenue of the international group for the accounting year exceeds Rs. 5500 crore

Form No. 3CEAD

On or before the due date for furnishing the return of income as specified in sub-section (1) of section 139. For accounting year 2016-17 it may be furnished at any time on or before the 31st March, 2018.

 

A constituent entity of an international group, resident in India of Parent entity not resident India where the provisions of section 286(4) are applicable

Form No. 3CEAD

On or before the due date for furnishing the return of income as specified in sub-section (1) of section 139. For accounting year 2016-17 it may be furnished at any time on or before the 31st March, 2018.

 

Where there are more than one constituent entities resident in India of an international group then the report  may be furnished by that constituent entity which has been designated by the international group to furnish the said report or information

Form No. 3CEAD

On or before the due date for furnishing the return of income as specified in sub-section (1) of section 139. For accounting year 2016-17 it may be furnished at any time on or before the 31st March, 2018.

 

 

Form No. 3CEAE

Due date of filing has not been specified


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Clarification related to guidelines for establishing 'Place of Effective Management' (PoEM) in India

The concept of 'Place of Effective Management' (PoEM) for deciding residency status of a company other than an Indian company was introduced in the Income tax Act. 1961 (the Act) which has become effective from 1st April. 2017, i.e., Assessment Year 2017-18 onwards

Representations have been received from the stakeholders wherein concerns have been raised that as per the extant guidelines PoEM may be triggered in cases of certain multinational companies with regional headquarter structure merely on the ground that certain employees having multi-country responsibility or oversight over the operations in other countries of the region are working from India. And consequently their income from operations outside India may be taxed in India

In view of the above, the Central Government has now clarified that so long as the Regional Headquarter operates for subsidiaries/group companies in a region within the general and objective principles of global policy of the group laid down by the parent entity in the field of Payroll functions, Accounting, HR functions, IT infrastructure and network platforms, Supply chain functions, Routine banking operational procedures and not being specific to any entity or group of entities per se, it would, in itself, not constitute a case of Board of Directors of companies standing aside and such activities of Regional Headquarter in India alone will not be a basis for establishment of PoEM for such subsidiaries/group  companies. It is also clarified that the provisions of General Anti-Avoidance Rule contained in Chapter X-A of the Income-tax Act, 1961 may get triggered in such cases where the above clarification is found to be used for abusive/ aggressive tax planning

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COMPANY LAW

Companies (Registered Valuers and Valuation) Rules, 2017

The Ministry of Corporate Affairs (MCA) has notified the provisions section 247 of the Companies Act, 2017 and the Companies (Registered Valuers and Valuation) Rules, 2017 with effect from 18 October, 2017. Section 247 of the Act requires that where a valuation is to be made of any property, stocks, shares, debentures, securities or goodwill or any assets or net worth of a company or its liabilities under the provisions of the Act, the same shall be valued by a person having the requisite qualifications, experience, registered as a valuer and member of a registered valuers organization, in the manner prescribed in the Rules. The notified Rules lay down the criteria for individuals, partnership entities and companies to be eligible to be registered as valuers under the Act. Apart from this, the Rules contain other aspects pertaining to registered valuers and valuation viz, Process for registration as valuers, Recognition of registered valuer organizations, Valuation standards, Transitional arrangement. The MCA has also delegated its power u/s section 247 of the Companies Act, 2013 to Insolvency and Bankruptcy Board of India. The MCA has also issued an order providing clarity with respect eligibility of the valuer as required under section 247 of the Companies Act, 2017.

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Relaxation of additional fee and extension of last date of filing of AOC-4 and AOC-4(XBRL) (both IndAS and non-IndAS) under the Companies Act, 2013

The Ministry of Corporate Affairs has extended the due date for filing Form AOC 4 and AOC 4 (XBLR) both for non IndAS and non IndAS financials for FY 2016-17 without payment of additional duties. The revised date for filing the forms is 28th November 2017 and 31st March 2018 for Non IndAS and IndAS financials respectively

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GOODS AND SERVICES TAX

Waiver of late fees for late filing of Form GSTR 3B for August and September 2017

The Central Government has waived off the late fee payable for late filing of Form GSTR – 3B for the month of August and September 2017.

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Extension of due dates for filing GST Returns

The Central Government has extended the due date for filing of various periodical GST returns as detailed below.

Forms

Original Due date

Revised Due date

FORM GST-ITC-01

31st October 2017

30th November 2017

FORM GSTR-2 and FORM GSTR-3 for the month of July, 2017

31st October 2017 &

10th November 2017

30th November 2017 &

11th December 2017

Form GST – REG - 26

NA

31st December 2017

Form GSTR – TRAN – 1 Under Rule 177 and 120 of CGST Rules 2017

31st October 2017

30th November 2017


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CUSTOMS

Publishing of rate of exchange for conversion of the foreign currency

The Central Board of Excise and Customs (CBEC) vide Notification No. 96 to 98 /2017 - Customs (N.T.) notified the rate of exchange for conversion of the foreign currency into Indian currency or vice versa for Export and Import of goods, with effect from 19th, 25th and 28th of October 2017 respectively

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LABOUR LAWS

Frequently Asked Questions (FAQs) on Inspection Policy issued by Employees’ Provident Fund Organization (EPFO)

Employee’s Provident Fund Organization(EPFO) vide its circular dated 26th June 2014 formulated the Inspection policy for ensuring more accountability, transparency and minimizing frequent inspections of same provident fund units. In this context, the EPFO has now issued FAQs on its inspection policy covering the following topics

  1. Regulations under which the establishments can be inspected
  2. Establishments exempted from inspections
  3. Different types of inspection
  4. Different criteria under which the establishments can be selected for inspection
  5. Selection of establishments for inspection
  6. Frequency of inspection
  7. Viewing of inspection reports
  8. Action to be taken against establishment violating the provisions of the Act

Click here to view the circular

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