Corporate Update: dated 31.08.2019Knowledge Sharing initiative..................
1. Ministry of Finance
v
Good news for Sugar Sector
(28.08.2019):
·
Cabinet approves Sugar export policy for evacuation of surplus
stocks during sugar season 2019-20
·
About 60 lakh tons sugar to be exported this financial year.
·
The lump sum export subsidy will be provided for expenses on
marketing costs including handling, upgrading and other processing costs, costs
of international and internal transport and freight charges on export.
v
Cabinet approves proposal for Review
of FDI policy on various sectors (28.08.2019).
·
upto 26% FDI in digital news and currrent affairs
·
Single brand retailers with over 51% FDI have to
locally source 30% of the value sold.
·
100% FDI allowed under automatic route for sale of
coal.
Major Impact and Benefits from FDI Policy Reform:
a) The changes
in FDI policy will result in making India a more attractive FDI destination,
leading to benefits of increased investments, employment and growth.
b) In the coal
sector, for sale of coal, 100% FDI under automatic route for coal
mining,activities including associated processing infrastructure will attract
international players to create an efficient and competitive coal market.
c) Further,
manufacturing through contract contributes equally to the objective of Make in
India. FDI now being permitted under automatic route in contract manufacturing
will be a big boost to Manufacturing sector in India.
d) Easing local
sourcing norms for FDI in Single Brand Retail Trading (SBRT) was announced in
Union Budget Speech of Finance Minister. This will lead to greater flexibility
and ease of operations for SBRT entities, besides creating a level playing
field for companies with higher exports in a base year. In addition, permitting
online sales prior to opening of brick and mortar stores brings policy in sync
with current market practices. Online sales will also lead to creation of jobs
in logistics, digital payments, customer care, training and product skilling.
e) The
amendments to the FDI Policy are meant to liberalize and simplify the FDI
policy to provide ease of doing business in the country, leading to larger FDI inflows
and thereby contributing to growth of investment, income and employment.
v
CBDT Clarification (28.08.2019):
CBDT clarifies differential regime between domestic investors
(including AIF category III) and FPIs existed even prior to General Budget 2019
and was not creation of the Finance (No. 2) Act, 2019
CBDT
has stated that in case of Foreign Institutional Investors (FPIs), Income Tax
Act, 1961 (the Act) contains special provisions [section 115AD read with
section 2(14) of the Act] for taxation of income from derivatives. Under this
regime, income of FPIs arising from derivatives was treated as capital gains
and liable for special rate of tax as per section 115AD of the Act. However,
income arising from derivatives for the domestic investors including
Alternative Investment Funds (AIFs) category-III as well as for foreign
investors who are not FPIs, has always been treated as business income and not
as capital gains, and taxed at applicable normal income tax rates. The
differential regime therefore already existed for FPIs through Section 115 AD.
v
Motor Vehicles Amendment Act 2019
(28.08.2019)
-
Enhanced Penalties Under Amended Motor Vehicles Act to Become
Applicable from September, 2019
-
Centre has Notified Some Provisions of the Act
-
brief of the provisions that have been notified today, and would
be applicable from the 1st of September : http://164.100.117.97/WriteReadData/userfiles/MVA.pdf
v
Clarification on applicability of Tax
Deduction at Source on cash withdrawals
· In order to discourage cash transactions and move towards
less cash economy, the Finance (No. 2) Act, 2019 has inserted a new section
194N in the Income-tax Act,1961 (the ‘Act’), to provide for levy of tax
deduction at source (TDS) @2% on cash payments in excess of one crore rupees in
aggregate made during the year, by a banking company or cooperative bank or
post office, to any person from one or more accounts maintained with it by the
recipient. The above section shall come into effect from 1st September, 2019.
·
any cash withdrawal prior to 1st September, 2019 will not
be subjected to the TDS under section 194N of the Act.
·
calculation of amount of cash withdrawal for triggering
deduction under section 194N of the Act shall be counted from 1st April, 2019.
·
if a person has already withdrawn Rs. 1 crore or more in
cash upto 31st August, 2019 from one or more accounts maintained with a banking
company or a cooperative bank or a post office, the two per cent TDS shall
apply on all subsequent cash withdrawals.
v Start-up Cell for redressal of grievances
CBDT
constitutes Start-up Cell for redressal of grievances related to Start-Ups
Key Point:
a) withdrawal of ‘Angel Tax’
provisions for Start-ups and their investors.
b) a dedicated cell would be set up
under a Member of CBDT for addressing the specific problems of Start-ups.
c) The Cell will work towards
redressal of grievances and mitigate tax-related issues in case of Start-up
entities with respect to administration of the Income-tax Act, 1961.
d) Start-up entities can approach the
Cell for speedy resolution of their grievances.
v Certain New Notifications:
1.
Income–tax (Fifth Amendment) Rules,
2019.
Applicable w.e.f. 1st day of September, 2019.
2.
Arbitration
and Conciliation (Amendment) Act, 2019
·
In the exercise of the powers conferred by sub-section (2)
of section 1 of the Arbitration and Conciliation (Amendment) Act, 2019 (33 of
2019), the Central Government hereby appoints the 30th August, 2019 as the date
on which the provisions of the following sections of the said Act shall come
into force:—
(1)
section 1;
(2)
section 4 to section 9 [both inclusive];
(3)
section 11 to section 13 [both inclusive];
(4)
section 15.
·
GST
Update
In
the notification of the Government of India, in the Ministry of Finance
(Department of Revenue), No.03/2019-
Central Tax (Rate), dated the 29th March, 2019, published in the Gazette of
India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R.
250 (E), dated the 29th March, 2019 :
(a)
at page 42, in line 31, for “FORM GST ITC- 03” read “FORM GST DRC- 03”; and
(b)
at page 47, in line 10, for “FORM GST ITC- 03” read “FORM GST DRC- 03”.
·
SEBI
(Securities Exchange Board of India)
Handling of Clients’ Securities by Trading
Members/Clearing Members
In order to protect clients’ funds
and securities, The Securities Contracts (Regulation) Act, 1956 and Securities
and Exchange Board of India (Stock-Brokers) Regulations, 1992 specifies that the
stock broker shall segregate securities or moneys of the client or clients or
shall not use the securities or moneys of a client or clients for self or for
any other client.
Key Point:
·
Please refer to SEBI Circular No.
CIR/HO/MIRSD/DOP/CIR/P/2019/75dated June 20, 2019 regarding the captioned
subject.
Link:
·
Effective deadline for implementation of guidelines prescribed
in clause 5 and clause 8 of the this SEBI circular shall be extended by one
month.
Source of the Circular:
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