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SPN Missive of October 2013


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Here we are with the Thirtieth successive issue of our monthly ‘Missive’.
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SPN Missive of October 2013

  1. 1. MISSIVE Volume XXX October 2013
  2. 2. Index Dear Patron H ere we are with the Thirtieth successive issue of our monthly ‘Missive’. We trust you will enjoy reading this Missive, even while soaking in the contents. We would very much appreciate your feedback which consistently helps us in improving and upgrading the contents. Thanks and regards, Knowledge Management Team Topics Direct Tax Transfer Pricing Service Tax Value Added Tax Customs FEMA Company Law Transactions that made headlines Page No 1 3 4 6 6 8 10 11 Never hold your head high with pride or ego, even the winner of a gold medal gets his medal only when he puts his head down!!!
  3. 3. DIRECT TAX ANL SINGAPORE PTE. LTD V. DY. DIT (2013) 37 131 (Mumbai-Trib) VIKAS OBEROI V. DY. CIT (2013) 37 46 (Mumbai - Trib.) Business income of NR isn’t taxable if its dependent agent is remunerated on ALP basis and is charged to tax Where share application money is returned without any allotment of shares, such refund cannot be classified as loan or advance under section 2(22)(e), unless mala fide intentions of assessee are proved     Although the share application money is one kind of advance given with the intention to obtain the allotment of shares, yet such advance is innately different from the normal loan or advance specified in 2(22)(e); In the instant case, the refund of the amount was made for commercial reasons and also in the best interests of the prospective share applicants. Further, it was self-explanatory that the assessee being a 'beneficial shareholder', derived no benefit whatsoever, when the impugned 'share application money' was finally returned without any allotment of shares for commercial reasons; Therefore, the share application money might have been an advance but it was not advance which was referred to in section 2(22)(e). Such advances, when returned without any allotment or part allotment of shares to the applicants, would not take a nature of the loan merely because the same was repaid or returned or refunded in the same year or later on after keeping the money for some time with the company; As the original intention of payment of share application money was towards the allotment of shares of any kind, the same couldn’t be deemed as 'loan or advance', unless the mala fide intentions were proved by the AO with evidence. 1 The Tribunal held in favour of the assessee as under:    Income in respect of voyages which had been considered as chargeable to tax in India as per Article 7 of the India-Singapore DTAA was the amount on which the assessee paid commission, etc., to CMA, which was its AE and also a dependent agent The receipt in the hands of the CMA had been determined at ALP under due process of law; Where the AE also constitutes a PE and was remunerated on ALP, then nothing further was left to attribute to the PE. Thus, it was held that income in respect of voyages couldn’t be included in the hands of the assessee ITO, TDS V. KENDLE INDIA (P.) LTD (2013) 37 140 (Delhi - Trib.) Where assessee made remittance for procurement of commercial information for onward transmission to its principal, remittance made was not for availing technical services and did not amount to royalty In the instant case the assessee had entered into a master clinical services agreement with its principal 'BHAG' for clinical trials. Assessee had arrangement with CSPL to provide information on clinical trial test undertaken by CTU of University of Kelmia, Sri Lanka. It applied for issue of certificate for non-deduction of tax on remittances made to CSPL which had no PE in India. The AO held that remittance for
  4. 4. clinical services was in nature of royalty and was liable to be taxed in India. On appeal, the CIT (A) reversed the order of AO. not provided in the law (Sandik Asia 280 ITR 643 (SC), not correct and should be reconsidered) The Tribunal held in favour of the assessee as under: The question before the Supreme Court was whether interest is payable by the Revenue to the assessee if the aggregate of installments of Advance Tax/TDS paid exceeds the assessed tax? The assessee relied upon Sandvik Asia   The services in question were services for supply of information which assessee was not using for any technical know-how but it was working as a conduit for supply of this information further to its principal; Thus, the remittance made by the assessee was not for availing of technical services and did not amount to royalty and therefore was not liable for withholding taxes. Protocol to India-Australia DTAA – ‘Force of attraction’ concept removed; PE redefined The protocol amending the agreement between the Government of India and Australia, signed on the December 16, 2011, has been notified on September 20, 2013 and is effective from April 2, 2013. Now Force of attraction' concept is removed from Article 7(1) with insertion of new Article 7(1). As per the new clause, the business profits of the enterprise may be taxed in the other State but only so much of them as are attributable to that PE. Threshold limit for establishing Service PE has been increased to 183 days. Earlier treaty did not provide for any threshold limit for establishing construction PE. However, the protocol provides for threshold limit of 183 days and 90 days on use of substantial equipment and on activities in connection with exploration of natural resources. CIT v. Gujarat Flouro Chemicals (SC) SLP (C) No. 11406 of 2008 Order dt. 18th Sep’13 Section 244A: The department is not obliged to pay interest on interest as that is 2 Limited vs. CIT 280 ITR 643 where it was held that the assessee was entitled to be compensated by the Revenue for delay in paying to it the amounts admittedly due. In Sandvik Asia 280 ITR 643 (SC) the Supreme Court held that if the department delays paying interest on the refunded amount, the assessee is entitled to interest on interest. Subsequently, in CIT vs. Gujarat Flouro Chemicals, a view was expressed that Sandvik Asia 280 ITR 643 (SC) did not lay down the correct law and ought to be reconsidered. The matter was referred to a larger Bench. HELD by the larger Bench: The judgment in Sandvik Asia 280 ITR 643 (SC) has been misquoted and misinterpreted by the assessees and also by the Revenue. Their view that in Sandvik case this Court had directed the Revenue to pay interest on the statutory interest in case of delay in the payment and that the Revenue is obliged to pay an interest on interest in the event of its failure to refund the interest payable within the statutory period is not correct. In Sandvik Asia, the Court was considering the issue whether an assessee who is made to wait for refund of interest for decades be compensated for the great prejudice caused to it due to the delay in its payment after the lapse of statutory period. In the facts of that case, this Court came to the conclusion that there was an inordinate delay on the part of the Revenue in refunding certain amount which included the statutory interest and therefore, directed the Revenue to pay compensation for the same but not an
  5. 5. interest on interest. S. 244A provides for interest on refunds under various contingencies. It is clarified that it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest. Citicorp Finance (India) Ltd vs. ACIT (ITAT Mumbai) ITA 8532/Mum/2011 dt. 13th Sep’13 TDS Credit must be given even if TDS Certificate is not available/ entry is not shown in Form 26AS The assessee claimed credit for TDS which was denied by the AO on the ground that the claim did not match the entries shown in Form No. 26AS and that there was a discrepancy. On appeal, the CIT(A) held that the assessee would be entitiled to credit to the extent shown in the computer system of the department. On further appeal by the assessee to the Tribunal HELD:   The AO is not justified in denying credit for TDS on the ground that the TDS is not reflected in the computer generated Form 26AS. In Yashpal Sahwney 293 ITR 539 the Bombay High Court has noted the difficulty faced by taxpayers in the matter of credit of TDS and held that even if the deductor had not issued a TDS certificate, still the claim of the assessee has to be considered on the basis of the evidence produced for deduction of tax at source. The Revenue is empowered to recover tax from the person responsible if he had not deducted tax at source or after deducting failed to deposit with Central Government. The Delhi High Court has in Court On Its Own Motion Vs. CIT 352 ITR 273 directed the department to ensure that credit is given to the assessee even where the 3  deductor had failed to upload the correct details in Form 26AS on the basis of evidence produced before the department. Therefore, the department is required to give credit for TDS once valid TDS certificate had been produced or even where the deductor had not issued TDS certificates on the basis of evidence produced by assessee regarding deduction of tax at source and on the basis of indemnity bond. TRANSFER PRICING Vodafone India Service Private Limited Recently the Bombay High Court (HC) in the case of Vodafone India Service Private Limited (taxpayer), dismissed the writ petition of the taxpayer by ruling that the TPO had jurisdiction to identify and determine arm’s length price of transactions not referred to him by the AO nor reported by the taxpayer in the Transfer Pricing Accountant’s Report. The taxpayer claimed that the TPO did not have jurisdiction to determine ALP of transactions relating to sale of call centre business and assignment of call options and thereafter filed a writ petition before the HC to quash the transfer pricing adjustment of INR 8,500 crores (USD 1330 Million) made by the TPO. The HC held that the taxpayer has more than one alternate remedy available under the Indian Tax Law (ITL). Therefore, the remedy provided by the statute should be availed of and not by way of a writ petition to the HC. The HC has purely decided on the jurisdiction of the TPO and maintainability of the writ and
  6. 6. has not discussed on the merits of the transfer pricing issues involved in the writ petition. IJM (India) Infrastructure Ltd Vs ACIT [ITA No 1814/Hyderabad/2012, A.Y 2008-09] The Hyderabad Bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of IJM (India) Infrastructure Ltd (taxpayer) has held that transactions between the taxpayer and its related parties having Permanent Establishment in India are transactions between two 'resident' entities and cannot be termed as 'international transaction'. The Tribunal also held that the transactions between the taxpayer and its joint venture with the group entity cannot be characterised as international transactions. Brief Facts During the year the taxpayer secured subcontracts form its domestic related parties one being a PE in India and the other being a joint venture. The taxpayer contended that the PE has a place of business in India by virtue of its registration under the provisions of the companies Act and also the control and management of its branch affairs are situated in India. Further the joint venture was formed in India and was assessed to tax in the status of AOP. The Tribunal accordingly held in favor of the Assessee that no Transfer Pricing provisions were applicable for the said year. Tellabs India Private Ltd vs. ACIT (ITAT Bangalore) The Bangalore Income-tax Appellate Tribunal in the case of Tellabs India Private Ltd (Taxpayer) held that assignment of a contract 4 to the Taxpayer by an Associated Enterprise (AE) is an international transaction to which the transfer pricing provisions shall apply and the consideration received should be determined at Arm’s Length Price. The taxpayers AE, a Denmark based Company secured a contract which was to be performed both outside (Off shore) and in India (On shore). The onshore component of the contract was thereafter assigned by the AE to the taxpayer. The assignment agreement between the AE and the Taxpayer had all the ingredients of an international transaction within the meaning of tax law. Thus it was an agreement between two or more AEs where one of the parties to the transaction is a nonresident. The transaction relates to provision of services or a transaction that had a bearing on profits, income, losses or assets. Therefore, the price paid for such transaction had to be determined in accordance with arm’s length principles. Press Release Changes made in the Final Safe Harbour Rules A press release issued on 18th September 2013 by the Government of India finalized the Safe Harbour Rules after considering comments of various stake holders and making necessary modifications to the draft rules which were released on 14.08.2013. SERVICE TAX Amendment Notification in Mega-Exemption
  7. 7. Notification no. 25/2012 has been amended and following additional services are being declared as exempted from service tax: Any services provided by(i) the National Skill Development Corporation set up by the Government of India; (ii) a Sector Skill Council approved by the National Skill Development Corporation; (iii) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation; (iv) a training partner approved by the National Skill Development Corporation or the Sector Skill Council in relation to (a) the National Skill Development Programme implemented by the National Skill Development Corporation; or (b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or (c) any other Scheme implemented by the National Skill Development Corporation. Notification no. 13/2013-ST. Dated: 10.09.2013 Ad-hoc Exemption Order for taxable services provided by the Hotel or Restaurant in the flood affected State of Uttarakhand In order to provide support to ensure sustenance for the local population in the state of Uttarakhand, Central Government exempts the following taxable service from the whole of service tax provided to any person in the State of Uttarakhand, namely: i. Services by way of renting of a room in a hotel, inn, guest house, club, campsite or other commercial place meant for residential or lodging purposes; 5 ii. Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess. Further, this exemption order shall be applicable for the abovementioned taxable services provided during the period 17th September, 2013 to 31st March, 2014. Exemption order 01/2013-ST. Dated: 17.09.2013 Central Excise Amendment in Notification no. 12/2012, dated 17.03.2012 In the said notification, wherein certain goods were exempted from excise duty, entry no. 327 (goods specified in List 9 for the manufacture of rotor blades for wind operated electricity generators) has been amended to include manufacture of intermediates, parts and subparts of rotor blades, for wind operated electricity generators. Notification no. 27/2013. Dated: 12.09.2013 Amendment in CENVAT Credit Rules In rule 3 of the CENVAT Credit Rules, 2004, for sub-rule (5A), the following sub-rule shall be substituted“ (5A) (a) If the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely:(i) for computers and computer peripherals: for each quarter in the first year @ 10% for each quarter in the second year @ 8%
  8. 8. for each quarter in the third year @ 5% for each quarter in the fourth and fifth year @ 1% Notification II/VAT/2012/part 16.09.2013 (ii) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter: Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value. (b) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value.” Notification No. 12 /2013-CE (NT). Dated: 27.09.2013 Amnesty scheme VALUE ADDED TAX Information online in Form DP-1 Form DP-1 shall be submitted online by all the dealers latest by 16/10/2013. Notification No.F.3(352)/Policy/VAT/2013/751762. Dated: 09.09.2013 Withdrawal of privilege of VAT refund The privilege of VAT refund has been withdrawn in respect of the High Commission of the Islamic Republic of Pakistan, New Delhi for its official purchases as well as for personal purchases of its diplomats, till further order. Notification No.F.5(54)/Policy-II/VAT/201213/769-781. Dated: 16.09.2013 Filing of stock statement The date for filing of Stock Statement in Form Stock-1 online for the stock available on 31st March, 2013 has been extended to 5th October 2013 for all the dealers. 6 No.F.7(433)/PolicyFile/782-794. Dated: Delhi Tax Compliance Achievement Scheme,2013 has been announced, under which a person may make a declaration of the tax dues to the designated authority on or before the 31st day of January 2014 so as to avoid obligations of interest and penalty. Notification No.F.3(16) / Fin. (Rev-I) /2013- 14/ dsVI /786. Dated: 20.09.2013 CUSTOMS Amendment in Notification No. 12/2012Customs dated 17.03.2012 The said notification, which states customs duty rate on various items, has been amended so as to include sugar beet seeds on which customs duty will be payable at the rate of 5%. Notification No. 43 /2013-Customs. Dated: 13.09.2013 Revision of customs duty rate on articles of gold and silver jewellery and goldsmiths and silversmiths ware Import duty leviable on articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal and articles of goldsmiths’ or silversmiths’ wares and parts thereof, of precious metal or of metal clad with precious metal, falling under headings 7113 and 7114 respectively of the First Schedule to the Customs Tariff Act, 1975 has been increased from 10% to 15%. Notification 17.09.2013 No. 44/2013-Customs. Amendment Notification No. Customs (N.T.), dated 3.08.2001 Dated: 36/2001-
  9. 9. Tariff value on the following goods has been revised: 2 71 or 98 TABLE-1 S. No. Description of goods (1) Chapter/ heading/ subheading/ tariff item (2) 1 1511 10 00 2 1511 90 10 Crude Palm Oil RBD Palm Oil Others – Palm Oil Crude Palmolein RBD Palmolein Others – Palmolein Crude Soyabean Oil Brass Scrap (all grades) Poppy seeds 3 1511 90 90 4 1511 10 00 5 1511 90 20 6 1511 90 90 7 1507 10 00 8 7404 00 22 9 1207 91 00 (3) Tariff value US $ (Per Metric Tonne) (4) 809 862 836 966 Tariff value (US $ Per Metric Tons ) (3) (4) 1 080280 Areca nuts 1870 (i.e. change) ” no 3860 2556 Notification No. 102/2013-CUSTOMS (N. T.). Dated: 30.09.2013 Recent Case Laws: Description goods (1) Chapter / heading / subheading / tariff item (2) (3) (4) 1 71 or 98 Gold, in any form, in respect of which the benefit of entries at serial number 321 and 323 of the Notification No. 12/2012-Customs 436 per 10 grams 7 Descriptio n of goods (1) Chapte r/ headin g/ subheadin g/tariff item (2) 886 885 702 per kilogr am TABLE-3 S. No. 883 TABLE-2 S. No . dated 17.03.2012 is availed Silver, in any form, in respect of which the benefit of entries at serial number 322 and 324 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed of Tariff value (US $) Whether sales tax or service tax is applicability on hire charges received on transfer of right to use goods Recently in the case of State of Andhra Pradesh v/s RashtriyaIspat Nigam Limited., Honorable Supreme Court has observed that when the effective control of the goods remains in the hands of the transferor only, despite of it being used by the transferee, then hire charges received in lieu of the goods used, is not leviable to sales tax. Goods are merely given to the transferee for specific use, but transferee cannot use them as per his own will, which implies that the effective control and possession remains in the
  10. 10. hands of the transferor only. Further, goods being in the custody of the transferee do not militate against possession. The essential condition of section 5E of the Andhra Pradesh general Sales Tax Act for levy of sales tax involves transfer of right to use, but here the right to use goods is not transferred and hence sales tax is not leviable on hire charges. However, as per Section 66E of the Finance Act, 1994, as amended declared Service includes when there is transfer of goods by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods. Hence service tax will be levied by virtue of such transaction falling in the declared service. FEMA A.P. (DIR Series) Circular No. 31 dated September 4, 2013 External Commercial Borrowings (ECB) from the foreign equity holder On a review, subject to the conditions prescribed in the circular, it has been decided to permit eligible borrowers to avail of ECB under the approval route from their foreign equity holder company with minimum average maturity of 7 years for general corporate purposes. A.P. (DIR Series) Circular No. 39 dated September 6, 2013 Export and Import of Currency As per Regulation (2) of Foreign Exchange Management (Export and Import of Currency) (Amendment) Regulations, 2009, notified vide 8 Notification No. FEMA 195/RB-2009 dated July 7, 2009, any person resident in India may take outside India or having gone out of India on a temporary visit, may bring into India (other than to and from Nepal and Bhutan) currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.7,500 per person. As a measure of enhanced flexibility any person resident in India, may take outside India (other than to Nepal and Bhutan) currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.10,000 (Rupees ten thousand only) per person; and who had gone out of India on a temporary visit, may bring into India at the time of his return from any place outside India (other than from Nepal and Bhutan), currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.10,000 (Rupees ten thousand only) per person. A.P. (DIR Series) Circular No. 42 dated September 12, 2013 Foreign Investment in India – Guidelines for calculation of total foreign investment in Indian companies, transfer of ownership and control of Indian companies and downstream investment by Indian companies On a review of the policy, condition (d) in Para 6 (ii) of Annex to A.P. (DIR Series) Circular No.1 dated July 04, 2013, as regards downstream investments by an Indian company which is not owned and/or controlled by resident entity/ties, has been amended. The amendment is that now Downstream investments through internal accruals are permissible by an Indian company, subject to
  11. 11. the provisions of clause 6(i) and as also elaborated in the Circular as against Downstream investments through internal accruals being permissible by an Indian company engaged only in activity of investing in the capital of another Indian company/ies, subject to the provisions of the above circular. A.P. (DIR Series) Circular No. 43 dated September 13, 2013 Export of Goods and ServicesSimplification and Revision of Declaration Form for Exports of Goods/Softwares The existing form used for declaration of exports of Goods/Softwares has been simplified and a common form called “Export Declaration Form” (EDF) has been devised to declare all types of export of goods from NonEDI ports and a common “SOFTEX Form” to declare single as well as bulk software exports. The EDF will replace the existing GR/PP form used for declaration of export of Goods. The procedure relating to the exports of goods through EDI ports will remain the same and SDF form will be applicable as hitherto. Under the revised procedure, the exporters will have to declare all the export transactions, including those less than US$25000, in the form as applicable. A.P. (DIR Series) Circular No. 44 dated September 13, 2013 Foreign Direct Investment (FDI) in India – Review of FDI policy – definition for control and sector specific conditions This circular defines the revised definition of the term ‘Control’ as under: 'Control' shall include the right to appoint a majority of the directors or to control the 9 management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements. It also lists that the government of Himachal Pradesh and Karnataka have given their consent to implement the FDI policy on Multi Brand Retail Trading in Himachal Pradesh and Karnataka respectively. Further, the extant policy on FDI caps and routes for various sectors has since been reviewed. Accordingly, in order to bring uniformity in the sectoral classification position for FDI as notified under the Consolidated FDI Policy Circular with the FEMA Regulations, Annex B of Schedule 1 to Notification No. FEMA. 20/2000-RB dated 3rd May 2000, has been suitably revised and the updated list is given at the Annex. A.P. (DIR Series) Circular No. 48 dated September 18, 2013 External Commercial Borrowings (ECB) Policy – Liberalisation of definition of Infrastructure Sector This Circular contains the expanded definition for infrastructure sector for the purpose of availing ECB. A.P. (DIR Series) Circular No. 53 dated September 24, 2013 Trade Credits for Import into India As per the extant guidelines, AD Category - I banks may approve availing of trade credit not exceeding USD 20 million up to a maximum period of five years (from the date of shipment) for companies in the infrastructure sector, subject to certain terms and conditions
  12. 12. stipulated therein. It is also stipulated that AD Category - I banks are not permitted to issue Letters of Credit/guarantees/Letter of Undertaking (LoU) /Letter of Comfort (LoC) in favour of overseas supplier, bank and financial institution for the extended period beyond three years. No roll-over/extension is permitted beyond the permissible period. On a review, with immediate effect, it has been decided to allow companies in all sectors to avail of trade credit not exceeding USD 20 million up to a maximum period of five years for import of capital goods as classified by Director General of Foreign Trade (DGFT). It has also been decided to relax the ab-initio contract period of 15 (fifteen) months for all trade credits to 6 (six) months. It has been decided, on a review, to discontinue the facility of allowing eligible borrowers to raise ECB at a higher all-in-cost to refinance / reschedule an existing ECB effective from October 01, 2013. The scheme of refinance of existing ECB by raising fresh ECB at lower all-in-cost, subject to the condition that the outstanding maturity of the original ECB is either maintained or extended, will continue as hitherto under the automatic route and approval route as the case may be. All other aspects of ECB policy shall remain unchanged. However, the AD Category - I banks are, cannot issue Letters of credit/guarantees /Letter of Undertaking (LoU) /Letter of Comfort (LoC) in favour of overseas supplier, bank and financial institution for the extended period beyond three years. COMPANY LAW All other aspects of Trade Credit policy will remain unchanged and should be complied with. The Central Government notified 98 provisions of the Companies Act, 2013, effective from the 12th day of September, 2013. A.P. (DIR Series) Circular No. 59 dated September 30, 2013 External Commercial Borrowings (ECB) Policy – Refinancing / Rescheduling of ECB As per the extant guidelines, the eligible borrowers desirous of refinancing an existing ECB can raise fresh ECB at a higher all-in-cost / reschedule an existing ECB at a higher all-incost under the approval route subject to the condition that the enhanced all-in-cost does not exceed the all-in-cost ceiling prescribed as per extant guidelines. 10 Commencement Notification Companies Act, 2013 of [Notification dated 12th September, 2013] Clarification on the Notification dated 12.09.2013 [General Circular No.15/2013 dated 13th September, 2013] The Companies Act, 2013, has been notified in the Gazette of India on 30th August, 2013, after receiving the approval from the President on 29th August, 2013. For inviting the comments/ suggestions or objections from the stakeholders or general public, a portion of the Draft Rules on 16 Chapters were placed on the
  13. 13. MCA website on 9th September, 2013. Out of 16 Chapters, 13 Chapters requiring specifying Forms will be soon uploaded on the website. The stakeholders expressed their difficulties in the proper implementation of some of the provisions of the 98 sections of the Companies Act, 2013 (the “said Act”) notified by the MCA on 12th September, 2013 and in order to ensure proper execution of the said Act, the following four clarifications were given: i) Sub-Section (68) of section 2:- Registrar of Companies may register those Memorandums and Articles of Association received till 11.09.2013 as per the definition clause of the ‘private company’ under the Companies Act, 1956, without referring to the definition of ‘private company’ under the “said Act”. ii) Section 102:- All Companies which have issued notices of general meeting on or after 12.09.2013, the statement to be annexed to the notice shall comply with additional requirements as prescribed in section 102 of “the said Act”. iii) Section 133:- Till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956, shall continue to apply. iv) Section 180:- In respect of requirements of special resolution under Section 180 of the “said Act” as against ordinary resolution required by the Companies Act, 1956, if notice for any such general meeting was issued prior to 12.09.2013, then such resolution may be passed in accordance with the requirement of the Companies Act, 1956. 11 Clarification on the Notification dated 12.09.2013 [General Circular No.16/2013 dated 18th September, 2013] In respect of the notification issued by MCA for the implementation of the 98 Sections of the Companies Act, 2013, on 12th September, 2013, it has been clarified by the Ministry that the provisions of the Companies Act, 1956, corresponding to the provisions of the Companies Act, 2013, will not be effective from 12th September, 2013, thereby, putting an end to the confusion regarding the application of the provisions of The Companies Act, 1956. Enforcement of Companies (Removal of Difficulties) Order, 2013 [Order dated 20th September, 2013] The Board of Company Law Administration has been authorised to exercise all the powers of the Tribunal under Sections 24, 58, and 59 with respect to the second proviso to sub-section (1) of Section 465 of the said Act, until the date is notified by the Central Government under sub-section (1) of section 434 of the Companies Act, 2013, for transfer of all matters, proceedings or cases to the Tribunal. TRANSACTIONS MADE HEADLINES   THAT Indian private firms temporarily allowed to go public overseas without the rider of local listing RBI tightens norms for companies lending against gold
  14. 14.       India Value Fund close to picking stake in Trivitron Healthcare for up to $24M Arisaig Partners ups stake in McDonald’s franchisee Westlife to 6.9% for $29M more GMR divests 74% stake in highway unit to IDFC for $35M Penguin Random House acquires ABP Group’s stake in Indian arm for $8.5M Barclays to shut wealth management services in 130 countries Unitech's Gurgaon IT SEZ sale may be delayed 12
  15. 15. Disclaimer: This publication is intended as a service to clients and associates and to provide them with details of the important Transaction updates. It has been prepared for the general guidance on matters of interest only, and does not constitute professional advice. No person shall act upon the information contained in this publication without obtaining specific professional advice. Due care has been taken while compiling the information, however, no representation (express or implied) is given as to the accuracy or completeness of the information contained in this publication. w A-380, Defence Colony, New Delhi – 110024, India.