268 / 2021
Quote of the day
Glossophobia is the number one fear after death. What is this exotic sounding phobia ? It is nothing but the fear of public speaking stemming from the fear of being rejected or embarrassed. Though the reference is to public speaking indicating a large gathering, it could also be a small group of friends, family, colleagues, countrymen. At times it could even be the fear of speaking to a senior, a person in authority or power or strong influence where you feel tongue-tied and suffer being judged or ridiculed. The reasons may be plenty but the cure is to confront the phobia by actually stepping forward and speaking.
This requires practice, practice and more practice until your thoughts, words and gestures are in perfect harmony. Until you feel you are a singer in an orchestra. Until you feel you are a painter, an artist. Yes until you deliver a performance as an artist rather than a speech. Performance with a Roar and Dance. Wait a minute, why did I say roar and dance ? That’s because that’s the title of a 30 minute speech, nay performance, that I witnessed a few weeks ago by a champion public speaker Fursey Gotuaco. Allow me to take you into the world of Fursey !!Speeches are like paintings. Speaker is like an artist who paints with different paint brushes, who roars and dances. The question is
Can we have in our voice the texture, colour & blend of a paint ?
How to create colour and texture through voice and draw focus of the audience to our speech ?
How to create the image of scale on a virtual screen ….small, medium, large by coming close to the screen or moving away, away, away from it signalling through hands and body gestures ?
Imagine dropping a pebble in a proverbial pool of water….1,2,3,4,5…how the ripples are formed from near to far. In different settings you may have to use different voices – whisper to catch attention, formal soft talk to a small gathering, a loud resonant voice before a large audience.
You and I have all tools within us to speak in a resonant voice. All of us are painters with different tools in our kit, with paint brushes of varied sizes and makes. We need to be aware of our painting abilities – for a speaker to be able to paint with his hands and vocal chords.
Lets resolve that “Today I will speak with a vibrant, rich, round, resonant voice” !
Coming to usage of hands, they speak along with the words, sometimes without them also. Hand gestures like a dancer’s movements speak a thousand emotions. Therefore choosing the right movement is very critical to an expression of a public speaker. A specific message could require gracious movements like a gentle dance. Curvaceous waving hands at times. A profitable idea could be reflected through a skyward looking firm hand. An inverted thumb for a dip in profits. A new policy launch could see the expansion through open, upward turned palms. Hand gestures are powerful tools that convey a variety of messages and any inappropriate usage could ruin the same. No wonder learning to use the hands effectively rather than hide it in the pocket or clasp it or fidget with it is an integral lesson in public speaking. Fundamentally determine how many crayons you have in your box ? How many you use ?
Again what matters is the appropriate scale, texture and colour of the painting because quintessentially “Speech is a work of Art”. Every element must be in proper dimension. A small idea should not be delivered in a loud voice nor a big idea in a small voice. Short and long pauses too are critical characters in the performance of a Speech. Most speakers begin with a strong voice at the opening of a sentence but lose out at the end. The key is to build and maintain intensity till the end, like a Rapper ! Appropriate voice, body language and hand gestures must be assiduously rehearsed and re-rehearsed until they blend in harmony and are completely internalised by the speaker. Then and only then the final outcome will be a synchronised symphony of sorts.
Fursey concluded ….Paint with emphasis, with pause, repetition, contrast in voice moving from 1 to 5, switch numbers if required, match with gestures for scale, neither understated nor overdone, maintain intensity in voice and grow it if the speech requires. Remember you are an artist with different paint brushes of every type. You are born with an instrument that you hardly understand. Now that you have, use it well, speak from your heart. Finally OWN YOUR SPEECH – ROAR & DANCE !!
Fursey left us all awe-struck, mesmerised and floored with the timbre in his voice, twinkle in his eyes and the various dance-like hand movements. Wow how much he could convey in 30 minutes in the imaginary stage of a zoom window ….the expanse, the depth and the excitement he created was incredible.
Perhaps my words fail to create the magic I experienced but even if I have got you a little bit interested, do explore the world of public speaking through the senses of an Artist. Now with which senses would you want to read the regulatory updates for September, 2021 ? Here again, however unromantic the law may be, our approach should be through the senses of a discerning artist. This 268th issue of Samhita presents to you several changes announced during September, 2021 – transformational ones by SEBI, informational ones pushed by IT, GST and MCA. Add to this an insightful article by our regular contributor, senior Company Secretary and industry veteran Ramaswami Kalidas titled “Enforcement of Transparency & Disclosure requirements through SEBI regulations – A study”.
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Enforcement of Transparency and disclosure requirements through SEBI Regulations - A Study
CS. Ramaswamy Kalidas, an eminent Company Secretary has written an insightful article titled “Enforcement of Transparency and disclosure requirements through SEBI Regulations-A Study”. With an approximate of 15 minutes read time, he has cherry picked specific provisions and provided a critical analysis.
Extended due date for filing form CRA-4
Pursuant to existing Rules, every Cost auditor is required to submit to the Board a Cost Audit Report within 180 days from closure of the financial year and the company is required file the Cost Audit Report in Form CRA-4 within 30 days of receipt of the Report.
In view of the pandemic situation, MCA vide Circular dated 27.09.2021 has given Cost Auditors a blanket extension upto 31.10.2021 to submit the Cost Audit Report to the Board of Directors of the company. Consequently, companies shall have time uptill 30.11.2021 for filing form CRA-4.
Companies that hold their AGM as per the extension granted, shall file Form CRA-4 within 30 days of receipt of the Report consequent to such extension.
Extended period for holding AGM till 30th November
MCA has directed ROCs to issue orders extending the timeline for holding AGM for the FY 2020-21 by 2 months i.e. to 30.11.2021 from the existing requirement of 30.09.2021. It has also been clarified that a separate application for extension of timeline for holding AGM in Form GNL-2 is not required to be filed.
All ROCs across the country have issued orders accordingly extending the AGM time to 30.11.2021.
Submission of reports in XBRL mode by Debt issuers
BSE vide notice dated 15.09.2021, instructed all debt issuers to submit Credit rating, Interest Payment, Redemption payment and Default History Information disclosures in XBRL mode only and Debt issuers shall file Record date details in both XBRL mode and in PDF mode.
It was also clarified that disclosures to be made in XBRL mode only will not be considered as valid submission if submitted through PDFs.
Applicable LODR disclosures for NCSLC’s
SEBI vide notification dated 07.09.2021 notified the SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2021. The amendment covers the disclosure requirements for Non-Convertible Securities Listed Companies (NCSLC). Key highlights of the amendments are as follows:
High Value Debt Listed Entities – to include non-convertible debt listed entities having outstanding NCDs > Rs. 500 Crs.
Corporate Governance framework – shall now be applicable to High Value Debt Listed Entities on a ‘comply or explain’ basis till 31.03.2023.
Definition of IDs – an explanation has been added to the definition of IDs in connection with High Value Debt Listed Entities which specifies the that in case of body corporates the non-executive directors and in case of trusts the non-employee trustees shall be treated as IDs.
Approval and submission of standalone financials – required to be submitted quarterly as against the current half yearly requirement.
Atleast 2 working days prior notice to Stock Exchange - of board meetings for consideration of financial results.
Website disclosure requirements - for High Value Debt Listed Entities are made at par with Equity Listed Entities.
IEPF related provisions made applicable - for unclaimed debt securities and interest for the same.
Amendments approved in SEBI Meeting
Vide Press Release dated 28.09.2021, SEBI has communicated the decisions taken at it’s meeting. Highlights of the Press Release include:
Review of regulatory provisions on Related Party Transactions - The Board considered and approved the amendments to SEBI (LODR) Regulations, 2015, in relation to related party transactions (RPTs). Key amendments are as follows:
Definition of related party has been amended
Prior shareholders approval shall be required for material RPTs having threshold of Rs.1,000 Crs or 10% of the consolidated annual turnover of the entity, whichever is lower
Additional matters on which the approval of Audit Committee shall be required
The amendments shall come into force on 01.04.2022.
Approval for framework of Social Stock Exchange
Approval for review of certain provisions related to Superior Voting Rights Shares Framework
Approval for Investor Charter for Securities Market
Approval for framework for Gold Exchange and SEBI (Vault Managers) Regulations, 2021
Approval for amendment to SEBI (Alternative Investment Funds) Regulations, 2012
Approval for introduction of Silver Exchange Traded Funds in India
Inclusion of Cost Accountants for share reconciliation audit under SEBI (D&P) Regulations, 2018
Extension of FTP 2015-2020 till March, 2022
ITR filing due date - extended
The due date of furnishing of Return of Income for the Assessment Year 2021-22, which was 31st July, 2021 under sub-section (1) of section 139 of the Act, was extended to 30th September, 2021 vide Circular No.9/2021 dated 20.05.2021 and is hereby further extended to 31st December, 2021.
The CBDT has also extended the ITR filing deadline for companies till February 15, 2022 from November 30, 2021.
The due date for filing the tax audit report and transfer pricing certificate has been extended to January 15, 2022 and January 31, 2022, respectively, from the existing deadline of October 31 and November 30, respectively.
Clarification on carry forward of losses
CBDT issues clarification regarding carry forward of losses in case of change in shareholding due to strategic disinvestment vide press release and Notification No. 105/2021-Income Tax Dated 10.09.2021:
In order to facilitate the strategic disinvestment, it has been decided that Section 79 of the Income-tax Act, 1961, shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment. Accordingly, loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company. The above relaxation shall cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold, directly or through its subsidiary or subsidiaries, fifty-one per cent of the voting power of the erstwhile public sector company.
Authentication by Electronic Verification Code
For easing the process of authentication of electronic records in faceless assessment proceedings, the Government has amended Income-tax Rules, 1962 (‘the Rules’) vide notification no G.S.R. 616(E) dated 6th September, 2021. The amended Rules provides that electronic records submitted through registered account of the taxpayers in the Income-tax Department’s portal shall be deemed to have been authenticated by the taxpayer by Electronic Verification Code (EVC) by logging into the registered account in the Income Tax Portal.
Applicability of rates under safe harbour rules
The Central Board of Direct Taxes CBDT has extended the applicability of rates under safe harbour rules used as a dispute resolution mechanism for transfer pricing issues for assessment year 2021-22 and which will be effective from April 1, 2021. During Asst.Yr. 2020-21 the rates were maintained as previous years due to Covid19 pandemic.
Scope of intermediary
Clarification has been provided on doubts related to scope of “intermediary” as per Sec 2(13) of IGST Act. The basic requirements for the concept of intermediary services have now been listed which are as follows:
There should be minimum of 3 parties
There should be 2 distinct supplies – Main supply between 2 principals and an ancillary supply which is the service of facilitating or arranging the main supply between the two principals
A person involved in supply of main supply on principal to principal basis to another person cannot be considered as supplier of intermediary service.
Intermediary should have a character of an agent, broker or any other similar person
Intermediary does not include a person who supplies such goods or services or both or securities on his own account
Sub-contracting for a service is not an intermediary service
Please also refer to the illustrations provided in the above circular.
Exemption of certain registered persons from the requirement Aadhar authentication
CBIC has amended Notification No. 03/2021–Central Tax dated February 23, 2021, to exempt certain registered persons listed below from the requirement of authentication or furnishing proof of possession of Aadhaar number as required under Rule 25(6A)
Not a citizen of India; or
Department or establishment of the Central Government or State Government; or
Local authority; or
Statutory body; or
Public Sector Undertaking; or
Person applying for registration under the provisions of sub-section (9) of section 25 of the said Act
Now vide this Notification, the above persons, if already registered, are being exempted from compliance with the requirement of authentication or furnishing proof of possession of the Aadhaar number as required under Rule 25(6A).
Clarifications under various heads
Certain issues have been clarified which are summarised below:
W.e.f. 01.01.2021, in case of debit notes, the date of issuance of debit note (not the date of underlying invoice) shall determine the relevant financial year for the purpose of section 16(4) of the CGST Act.
The availment of ITC on debit notes in respect of amended provision shall be applicable from 01.01.2021. Accordingly, for availment of ITC on or after 01.01.2021, in respect of debit notes issued either prior to or after 01.01.2021, the eligibility for availment of ITC will be governed by the amended provision of section 16(4), whereas any ITC availed prior to 01.01.2021, in respect of debit notes, shall be governed under the provisions of section 16(4), as it existed before the said amendment on 01.01.2021
There is no need to carry the physical copy of tax invoice in cases where invoice has been generated by the supplier in the manner prescribed under rule 48(4) of the CGST Rules (E-invoice) and production of the Quick Response (QR) code having an embedded Invoice Reference Number (IRN) electronically, for verification by the proper officer, would suffice.
Only those goods which are actually subjected to export duty i.e., on which some export duty has to be paid at the time of export, will be covered under the restriction imposed under section 54(3) from availment of refund of accumulated ITC.
Clarification w.r.t export of services
Clarification relating to export of services-condition (v) of section 2(6) of the IGST Act, 2017 has been provided.
It is clarified that a company incorporated in India and a body corporate incorporated by or under the laws of a country outside India, which is also referred to as foreign company under Companies Act, are separate persons under CGST Act, and thus are separate legal entities. Accordingly, these two separate persons would not be considered as “merely establishments of a distinct person in accordance with Explanation 1 in section 8”. So, the benefit of export of service would apply subject to other conditions being fulfilled.
Therefore, supply of services by a subsidiary/ sister concern/ group concern, etc. of a foreign company, which is incorporated in India under the Companies Act, 2013 (and thus qualifies as a ‘company’ in India as per Companies Act), to the establishments of the said foreign company located outside India (incorporated outside India), would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act 2017 for being considered as export of services, as it would not be treated as supply between merely establishments of distinct persons under Explanation 1 of section 8 of IGST Act 2017 . Similarly, the supply from a company incorporated in India to its related establishments outside India, which are incorporated under the laws outside India, would not be treated as supply to merely establishments of distinct person under Explanation 1 of section 8 of IGST Act 2017. Such supplies, therefore, would qualify as ‘export of services’, subject to fulfilment of other conditions as provided under sub-section (6) of section 2 of IGST Act.
CGST 8th Amendment Rules
Central Tax dated 24th September, 2021 CGST 8th Amendment Rules have been notified. The amendment relates to the following items:
Rule 10A: In case of a proprietorship concern, the Permanent Account Number of the proprietor shall also be linked with the Aadhaar number of the proprietor.
Rule 10B: Registered person is required to authenticate Aadhar number in order to be eligible for filing:
Revocation of cancellation of registration in Form REG-21
Refund application in Form RFD-01
Refund under Rule 96 of IGST paid on goods exported out of India.
Rule 45: Form GST ITC-04 shall be filed on half yearly basis for registered persons whose aggregate turnover during the immediately preceding financial year exceeds 5 crore rupees and on yearly basis for registered persons whose aggregate turnover in preceding financial year is upto 5 crores rupees.
Rule 59(6) of the CGST Rules is to be amended with effect from January 01, 2022 to provide that a registered person shall not be allowed to furnish Form GSTR-1, if he has not furnished the return in Form GSTR-3B for the preceding month.
Rule 89: Registered person can claim refund of tax paid under wrong or incorrect head, before two years from date of payment of tax under correct head.
However, for refund of tax paid under wrong head, wherein tax under correct head has been paid before date of notification no. 35/2021 dated 24-09-2021, can be claimed before expiry of two years from the date of issuance of notification no. 35/2021 i.e. before 2 years from 24-09-2021
Rule 96: For claiming refund of IGST paid on export of goods or services out of India, registered person has to undergo Aadhar authentication as requires under Rule 10B.
Rule 96C: Refund will be granted in a bank account which is in name of registered person and said account has been updated with the PAN in the bank account.