KrayMan Complire Consultare

Newsletter – Jan / Feb 2015 India professional updates

KrayMan Consultants LLP

This Newsletter provides information of general nature and is not meant to be a substitute for professional advice in any manner

Newsletter – Jan/Feb 2015

Setting up of business in India

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Government launches 11 services on single window eBiz portal, required for starting business in India (especially to help foreign companies, link: www.ebiz.gov.in) •

MCA (Ministry of Corporate Affairs) services -

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DGFT (Director General of Foreign Trade) services -

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Reporting of advance foreign remittance Reporting of foreign collaboration under allotment (FC-GPR)/ transfer (FC-TRS) of shares (PS: Forms FC-GPR and FC-TRS may continue to be filed manually as per current norms)

Income-tax -

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Import-Export Code

RBI services -

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Issue of DIN (Directors Identification No.) Company name availability Certificate of Incorporation Certificate of Commencement of business

Issue of PAN (Permanent Account No.) / TAN (Tax Deduction a/c no.) Filing of tax returns

Social security registration -

Employer’s registration under provident fund and state insurance regulations Newsletter – Jan / Feb 2015

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Direct Tax •

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India Union Budget on 28 February and Railway Budget on 26 February -

India Union Budget for coming fiscal year to be presented on 28 February (Saturday) in the Parliament

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Parliament to have special sitting on Saturday (holiday) for Finance Minister to present the Budget which will be preceded by the Railway Budget on 26 February

Government accepts order of Mumbai High Court in case of Vodafone (re: transfer pricing adjustment in case of issue of shares at premium) -

Government accepts order of Mumbai High Court in case of Vodafone India Services Pvt. Ltd., wherein Court has held, premium on issue of shares was a capital account transaction not giving rise to income, hence not liable to transfer pricing adjustment

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Move likely to bring more clarity for taxpayers, facilitating tax compliance and reducing litigation

CDBT (Central Board of Direct Taxes) clarifies re: quantum of tax-disallowance for failure to withhold tax at source on payment to non-resident -

Quantum of disallowance to be not the gross payment, but limited to portion representing ‘sum chargeable to tax’ as per section 195 of Income-tax Act Newsletter – Jan/Feb 2015

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Direct Tax •

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TARC (Tax Administration Reforms Commission set up by Government) submits 4th and final report to Finance Minister, covering last 3 of its 12 terms of reference as below -

To review existing mechanism and recommend appropriate means including staff resources for forecasting, analyzing and monitoring of revenue targets

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To review existing policy and recommend measures for research inputs to tax governance

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To review existing mechanism and recommend measures to enhance predictive analysis to detect / prevent tax and economic offences

Interest for delay in furnishing tax return where tax is paid before due date -

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CBDT clarifies, no interest-levy for delay in furnishing tax return if tax is paid before due date of filing tax return (in furtherance to Supreme Court decision in case of Pranoy Roy & Anr / 2008)

CBDT clarifies regarding applicability of section 143(1D) of Income-tax Act -

Processing of returns for refunds cannot be undertaken wherein the case has been selected for scrutiny

Newsletter – Jan / Feb 2015

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Indirect Tax Customs / Excise •

CBEC (Central Board of Excise / Customs) dispenses with requirement of producing separate packing list in customs -

Background: As per existing procedure, an importer / exporter is required to submit a commercial invoice as well as packing list along with customs declaration form viz. bill of entry / shipping bill

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Both documents are important, as commercial invoice shows value of the goods whereas packing list facilitates examination of goods for ascertaining correctness of duty and quantity

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However, there are many identical fields in commercial invoice and packing list, such as description of goods, marks and numbers, quantity, weight, etc.

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Amendment: As measure of simplification, in case importer/exporter submits a commercial invoice cum packing list that contains above mentioned information, a separate packing list should not be insisted upon by customs authorities. However, option given to the importer/exporter to do so

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In other words, a commercial invoice cum packing list (with details of marks and numbers) to suffice but if importer/exporter desires to give a separate packing list for any reason, he may continue to do so Newsletter – Jan / Feb 2015

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Indirect Tax Customs / Excise (contd.) •

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Re-export of goods imported under genuine mistake -

Background: Currently, procedure for allowing re-export of goods imported under bonafide (genuine) mistake at customs stations is time consuming and difficult. Given the numerous instances of wrong shipments on daily basis, Government simplifies the procedure

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To expedite decision-making in such cases, Government decides, permission for re-export may be granted on merit by the concerned officer as per the adjudication powers

Summons to be issued by tax office to top management of companies only in grave cases -

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Summons not to be issued to senior management officials of large companies or public-sector undertakings, unless there is indication of their involvement in decision-making processes which have led to loss of revenue for Government

Excise duty on diesel -

New method provided for calculation of basic excise duty on branded high speed diesel from 30 Jan 2015: 14% ad valorem plus Rs. 5.00 perlitre, or, 10.25 per litre, whichever is lower

Newsletter – Jan / Feb 2015

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Indirect Tax Sales tax / Delhi Value Added Tax (VAT) •

Extension of due date for filing VAT Return for quarter ended 31 Dec 2014 -

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Due date for filing online as well as hard copy VAT return in forms DVAT - 16, DVAT – 17, DVAT - 48 for the quarter ended 31 Dec 2014, extended to 15 Feb 2015

Extension of due date for filing reconciliation return for financial year (FY) 2013-14 -

Due date for filing online reconciliation return in form 9 extended to 31 March 2015 (from 5 February 2015)

Newsletter – Jan / Feb 2015

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Tax Rulings Direct-tax •

Success fee charged for fund raising services by non-resident is taxable as fee for technical services and requires withholding of tax at source – Supreme Court in case of GVK Industries Ltd.

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Section 234E (fee for late filing of withholding tax returns) is constitutionally valid – Bombay High Court in case of Rashmikant Kundalia

Indirect-tax •

Official liquidator is a dealer liable to pay sales tax – Supreme Court in case of Hindustan Urban Infrastructure Ltd

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There is no provision in the foreign trade policy which bars an Indian subsidiary of a foreign holding company from availing the benefit of Serve From India Scheme (SFIS) - Delhi High Court in case of Yum Restaurants (India) Pvt. Ltd.

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Processing and supplying of photographs is liable to sales tax - Supreme Court in case of M/s. Pro Lab & Others

Newsletter – Jan / Feb 2015

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Company law •

Committee to monitor implementation of Corporate Social Responsibility (CSR) policies -

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High level committee set up to monitor compliance of CSR provisions by companies and suggest measures on behalf of Government to companies for evaluation of their CSR initiatives

Amendment in definition of small companies -

Background: Currently ‘small companies’ are entitled to certain relaxations as per company law (such as relaxation in requirement for board meetings, certification etc.).

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A company qualifies as small company if its paid up capital is not more than Rs.50 lakh or turnover is not more than Rs. 2 crore

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Definition of small company made more strict, to fulfill both the above conditions (re: paid up capital as well as turnover) to qualify as small company

Import of goods into India: Withdrawal of requirement for submitting Form A-1 -

Requirement of submitting request in Form A-1 to AD Category –I Banks for making payments towards imports, dispensed with. Bank may obtain requisite details from importers and satisfy itself about genuniness of the transactions before effecting the remittance

Newsletter – Jan / Feb 2015

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Company law •

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Government notifies rules for Indian accounting standards, which shall be mandatory for certain companies from accounting periods beginning on or after 1 April 2016 -

Indian accounting standards which are converged with global reporting standards (IFRS), may be followed by companies voluntarily for accounting periods beginning 1st April 2015

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Government notifies categories of companies to comply with Indian accounting standards for accounting periods beginning on or after 1st April 2016

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Determining criteria for categorization: Listing of equity / debt securities on stock-exchange, net-worth limits, group companies, etc.

Extension of time limit for filing notice of appointment of cost auditor -

Government extends time limit for filing notice of appointment of cost auditor in form CRA-2 upto 31 March 2015

Newsletter – Jan / Feb 2015

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Regulatory •

Mobile handsets with duplicate / fake identity numbers prohibited from import -

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GSM mobile handsets with duplicate / fake IMEI (international mobile equipment identity) & CDMA mobile handsets with duplicate / fake ESN/MEID (electronic serial number / mobile equipment identifier) added to list of prohibited items for import

RBI exempts core investment companies from becoming members of Credit information Companies (CIC) -

Background: As per RBI’s circular in 2010, all NBFCs (non-banking finance companies) were required to provide current and historical data on borrowers to CICs

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RBI now exempts NBFCs which are registered as CICs and those not having any customer interface from providing data on borrowers to CICs.

Remittance of salary outside India to employees on deputation -

Background: Foreign / Indian expatriate employed by foreign company outside India on deputation to office/ branch/ subsidiary/ joint venture in India of such foreign company, may receive the whole salary payable to him by credit to his bank account outside India

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Group company in India of a foreign company included in the above list by RBI

Newsletter – Jan / Feb 2015

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Regulatory •

RBI prescribes guidelines on private placement of non-convertible debentures by NBFCs (maturity more than 1 year) -

Planning and periodicity of private placement to be decided by policy approved by board of directors of NBFC

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Minimum subscription per investor: Rs. 20,000

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Private placement to be in 2 categories, (i) those with maximum subscription of less than Rs. 1 crore, and (ii) those with a minimum subscription of Rs. 1 crore and above per investor

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An NBFC (excluding core investment companies) to issue debentures only for deployment of funds on its own balance sheet and not to facilitate resource requests of group entities / parent company / associates

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Extension of loans against security of its own debentures (issued either by way of private placement or public issue) by NBFC not allowed

Newsletter – Jan / Feb 2015

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Regulatory •

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Import-Export code (IEC) -

New system of online applications for IEC to start from 1 Feb 2015 onwards

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Facility of filing manual application to continue for applicants who do not have access to net banking facility with 10 notified banks

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Only one IEC to be issued against a single PAN. Multiple IECs issued against a single PAN to be deactivated after 31 Mar 2015

Entry of banks into insurance sector -

Banks which satisfy the eligibility criteria as on 31 March of previous year, may apply to RBI for undertaking insurance business with risk participation

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Only 1 entity in a group may undertake insurance distribution in either of the two modes i.e. broking or corporate agency mode

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There should be an ‘arms length’ relationship between the bank and insurance outfit

Newsletter – Jan / Feb 2015

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About Us Who We Are:

We are an Accounting firm of Business Consultants, Chartered Accountants & Company Secreteries providing services in areas of Book-keeping, Audit, Payroll, Tax, Regulatory, Consultancy and Outsourcing matters. Our Focus: To provide high quality services to our clients and believe in upholding high standards of honesty and integrity in what we do

What We Do: The path for any business from start-up through growth to success is accompanied by the need to adhere with ever-increasing complex and detailed functional and statutory requirements. We make all efforts to be the ideal partner and consultant for our clients in this journey, by delivering quality across a wide range of service areas

Our Clientele: We have been providing services to a proud mix of Multinational companies, Indian companies, Expatriates, High Net Worth Individuals, Not-For-Profit entities, etc. Our multinational client-set includes companies belonging to Japan, Singapore, Thailand, Germany, UK etc. We advise & also hand-hold foreign companies set-up operations in India & cater to their compliance requirements right from inception to regular day-to-day operations Newsletter – Jan / Feb 2015

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Our Services


Accounting / Book-keeping




Book-keeping, Preparation and Compilation of financial statements, Accounting reconciliations and Consolidations, Accounting system implementation, Development of Accounting policies and Procedures Manual, Forecasting and Projections, Financial analysis of reports, Cash flow management.




Advice on Regulatory matters, Assistance in obtaining Clarifications and Approvals from Reserve Bank of India (RBI) and other Statutory Authorities, Company Law Compliance, Compliance with Exchange Control Regulations and Import-Export Code norms.




Audit / Assurance




Payroll processing Salary structuring, Development of Employee manual and Employment contracts, Monthly payroll processing and generation of salary slips, Withholding Tax (TDS) Compliance on Salaries and Issue of TDS Certificate, Liaison with bankers.




Taxation Corporate, Individual & International Taxation, Direct & Indirect tax compliance, Return Filing, Tax Advisory, Tax Audit, Dispute Resolution, Transfer Pricing.

Company law / Entry-into-India Entry-into-India strategies for foreign entities, Setting up of Companies, Branch office, Liaison office, etc. in India, Company / LLP incorporation, Maintenance of secretarial records, Filing of necessary forms .

Statutory Audit, Internal Audit, Review of financial statements, Internal control reviews, Reporting requirements, Drafting of Management letters, Physical Inventory, Certification, Attestation, Consolidations.




Regulatory

Transaction advisory Business structuring, Valuations, Corporate Finance, Due diligence, Tax planning.




Outsourcing Virtual Finance Co-ordinator / Controller, Book-keeping, Tax compliance, Management representation, Other finance and administration procedures, Legal Process Outsourcing

Newsletter – Jan / Feb 2015

Contact Us

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CA Manan Agarwal [email protected] CA Kratika Agarwal [email protected]

KrayMan Consultants LLP 1170A, 11th Floor, Tower B1 Spaze i-Tech Park Sector 49, Sohna Road Gurgaon – 122001 (India)

T: +91 124 4309418 Web: www.krayman.com Affiliation: Manan Agarwal & Associates Chartered Accountants

Newsletter – Jan / Feb 2015