Vistra India Update 401

INCOME TAX

1.    CBDT notifies Cost Inflation Index for FY 2020-21

CBDT has notified ‘301’ as Cost Inflation Index for FY 2020-21.

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COMPANY LAW

 2.   Companies (Share Capital and Debenture) Amendment Rules, 2020

 Ministry of Corporate Affairs has amended Companies (Share Capital and Debenture) Rules, 2015 to provide:

1. Increase in the time limit to issue Sweat Equity shares (within the limit of 15% of paid share capital) to 10 years (from 5 years) by eligible startup company
    
2. In respect of adequacy of Debenture Redemption Reserve and investment or deposits, that a company shall before the 30th day of April in each year, in respect of debentures issued, invest or deposit, as the case may be, not be less than fifteen percent of the number of its debentures maturing during the year, ending on the 31st day of March of the next year in any one or more methods of investments or deposits.

Provided that the amount remaining invested or deposited, as the case may be, shall not at any time fall below fifteen percent of the amount of the debentures maturing during the year ending on 31st day of March of that year.

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3.   Clarification of Passing Ordinary and Special Resolutions

In view of current circumstances prevailing on account COVID-19 and the requirement to follow social distancing and lockdown norms, Ministry of Corporate Affairs (MCA) has extended the time limit to allow Companies to conduct EGM through video or other audio visual means or transact items through postal ballots in accordance with framework up to 30th September 2020 subject to fulfilment certain requirements.

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GOODS AND SERVICES TAX

4.   Clarification on Refund Related Issues

The CBIC vide Circular No. 139/09/2020-GST dated 10th June,2020 has issued clarifications regarding  issues relating to refund of accumulated ITC in respect of invoices whose details are not reflected in the FORM GSTR-2A of the applicant.

The department had issued Circular No.135/05/2020–GST dated the 31st March, 2020 clarifying that the refund of accumulated ITC shall be restricted to the ITC as per those invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant.  Based on this Circular the department had rejected the refund application of refund of accumulated ITC in respect of ITC availed on Imports, ISD invoices, RCM etc.

Representations were received on the above to clarify the Circular issued on 31^st March 2020.  Based on the representation, the department has clarified that the refund of ITC availed on the invoices / documents relating to imports, ISD invoices and the inward supplies liable to Reverse Charge (RCM supplies) etc. shall be available for refund and the previous circular issued on 31^st March 2020 was only to restrict the invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant.

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5.   Clarification in respect of levy of GST on Director’s Remuneration

The CBIC vide Circular No. 140/10/2020-GST dated 10th June, 2020 has issued clarifications on levy of GST on Director's remuneration paid by companies to their directors.

The issue of remuneration to directors has been examined & clarified under following two different categories as below:

1. Leviability of GST on remuneration paid by companies to the independent directors or those directors who are not the employee of the said company.
   
   It is clarified that the remuneration paid to independent directors, or those directors, by whatever name called, who are not employees of the said company, is taxable in hands of the company, on reverse charge basis.
    
2. Leviability of GST on remuneration paid by companies to the directors, who are also an employee of the said company.

It is clarified that the Director's remuneration which are declared as 'Salaries' in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of his employment.

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CUSTOMS

6.   Publishing of rate of exchange for conversion of the foreign currency

The Central Board of Excise and Customs (CBEC) vide Notification No. 49/2020 - 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 5^th of June 2020.

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