RBI Updates: RBI tightens remittance norms

RBI, by issuing Circular RBI/2017-18/204 A.P. (DIR Series) Circular No. 32 on 19th June, 2018, tightens the remittance norms under Liberalized Remittance Scheme.

The RBI has tightened norms for Liberalised Remittance Scheme (LRS) by making quoting of permanent account number (PAN) mandatory even for transactions below USD 25,000.

Under the LRS, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year for any permissible current or capital account transaction or a combination of both.

Individuals can avail of foreign exchange facility for the purposes within the limit of USD 2,50,000 only.

Further, in the context of remittances allowed under LRS for maintenance of close relatives, it has been decided, in consultation with government, to align the definition of 'relative' with the definition given in Companies Act, 2013 instead of Companies Act, 1956, it added.

Copy of such Circular can be accessed below.

SEBI Updates: Outcome of SEBI's Board meeting

SEBI had its board meeting on 21st June, 2018 to discuss many important issues.

Following are few of important decisions taken by SEBI in its meeting dated 21st June, 2018

1. Review of SEBI (SAST) Regulations, 2011

It has been decided to grant additional time for upward revision of open offer price till one working day before the commencement of the tendering period

2. Replacing SEBI (Buy-back of Securities) Regulations, 1998 with new SEBI (Buy-back of Securities) Regulations, 2018

The Board has approved reframing a new set of SEBI (Buy-back of Securities) Regulations, 2018 (“new Buyback Regulations”) in lieu of the extant Buyback Regulations, 1998 to be in consistent with Section 68 and Section 70 of Companies Act, 2013

3. New SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018

The Board approved the proposed SEBI (Issue of Capital and Disclosure Requirements) Regulations, (“ICDR Regulations”) 2018 after considering the recommendation of the Primary Market Advisory Committee (PMAC) and the public comments on the Consultation Paper.

Some of important changes which are proposed in new ICDR, 2018

• Threshold for submission of draft letter of offer to SEBI in case of rights issues to be increased to Rs. 10 Crores from Rs. 50 Lakhs.
• Shortfall of up to 10% in minimum promoters’ contribution may be met by institutional investors
• For a company to be eligible to make a fast track rights issue, it should not have any audit qualifications or adverse opinion.
• Minimum Anchor investor size to be reduced to Rs. 2 Crore from the existing Rs. 10 Crore.
• The shareholding threshold for identifying promoter group has been revised from 10 percent to 20 percent.

4. Role of Sub-broker vis-a-vis Authorized Person

The Board considered and approved the proposal to discontinue the category of Sub-Brokers as Market Intermediaries. No fresh registration shall be granted as Sub-Brokers. Registered Sub-Brokers shall migrate to Authorised Persons or Trading Members as the case may be and Sub-Brokers, who do not choose to migrate, shall be deemed to have surrendered their registration as Sub-Broker.

5. Establishment of National Centre for Financial Education (NCFE)

The Board approved the establishment of National Centre for Financial Education (NCFE) to undertake financial education activities in terms of the National Strategy for Financial Education (NSFE) as approved by the Sub-Committee of Financial Stability and Development Council (FSDC-SC)

You can find below the complete outcome of SEBI's board meeting dated 21st June, 2018

GST Updates: Common Enrollment Number for transporters

GST: Transporters can now use common enrollment number across multiple states

To help the logistics industry comply with e-way bill requirements with ease, the Finance Ministry has notified new rules for transporters running businesses in multiple States.

The Central Goods and Services Tax (Sixth Amendment) Rules, 2018, which came into effect on June 19, prescribes: “A transporter who is registered in more than one State or Union Territory having the same Permanent Account Number, may apply for a unique common enrolment number by submitting the details in FORM GST ENR-02 using any one of his Goods and Services Tax Identification Numbers, and upon validation of the details furnished, a unique common enrolment number shall be generated and communicated to the said transporter.”

But it comes with a caveat that if the transporter has obtained a unique common enrolment number (UEN), he will not be eligible to use any of the GSTINs.

Transporters are required to submit the final report after the e-way bill is generated.

The report indicates that tax-paid goods have been delivered, and now can be used for verification in the tax assessment of buyers. Under the new rules, transporters will be given extended time not exceeding three days for recording of the final report.

Ease of Compliance

Generation of e-way bills by a transporter registered in multiple States was seen as an arduous task, as the transporter was required to login with the respective GSTINs in various States to generate the bills.

You can find copy of such notifications below.

Source: The Hindu Business Line

MCA Update: MCA notified significant beneficial ownership rules

Ministry of Corporate Affairs (MCA) issued a notification notifying the Companies (Significant Beneficial Owners) Rules, 2018 with effect from 13th June, 2018.

This step is taken by MCA after notifying Section 90 of Companies Act, 2013 with effect from 13th June, 2018. Section 90 deals with "significant beneficial owner".

These rules are in respect to provide for significant beneficial ownership aimed at tracking the real beneficiaries of shares as often benami holdings are found in shell companies. The new section (Section 90) that was inserted in the Companies Act is also part of the global fight against money laundering and came at the behest of Paris based Financial Action Task Force with countries such as the UK already incorporating the provisions. 

This section and the rules provide for maintaining of a register of “beneficial owners”. MCA has set the limit at 10% to whom such rules will be applicable, thereby increasing the ambit of the provisions to cover a larger base of shareholders, who may be warehousing the shares for someone else.

These rules provide for mandatory disclosure within a stipulated period and once the rules are notified there will be a rush of filings as shares in most companies are not widely held. A failure to disclose beneficial ownership can result in a fine of up to Rs 50,000 with a daily penalty of Rs 1,000, if the failure to comply with the rules continues. The Companies Act also allows the Centre to investigate cases of beneficial ownership.

The copy of rules can be found below.

Income Tax Updates: Cost Inflation Index is 280 for FY 2018-19

Central Board of Direct Taxes (CBDT) has notified the cost inflation index (CII) at 280 for FY 2018-19. By issuing a notification dated 13th June, 2018, CBDT has added an entry for FY 2018-19 for Cost Inflation Index at 280.

CBDT further clarifies that this changes will come into force with effect from 01st day of April, 2019 and shall apply to AY 2019-20 and subsequent years.

You can find below the copy of Notification issued by CBDT.