o Audit o Direct Taxes o Indirect Taxes

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o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 S P C M & ASSOCIATES Chartered Accountants MONTHLY NEWSLETTER HOME Sincerity Professionalism & Commitment is our Motto EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA C. A. Suhas P. Bora 1211 B, Shukrawar Peth, Subhash Nagar Lane No. 4, Pune 411 002, Ph. : (020) 24479119 T elefax (020) 24486663 C. A. Pradip M. Kataria 207, Nav Maharashtra House, 43, Shaniwar Peth, Pune 400 030 Telefax : (020) 24478059/69 FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS Email : abhay. bora@spcm. co. in DISCLAIMER : Every effort has been made to ensure accuracy in the information. The publishers do not hold themselves responsible for errors that may have arisen. Please take professional advice for further implementation. All rights reserved. STRICTLY FOR PRIVATE CIRCULATION BY INVITATION

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Editorial - CA. Suhas P. Bora Dear All Wish you a lovely morning. Last month I shared with you our primary premise, the core of our belief system, namely that "the future belongs to those who live intensely in the present". In that context there are happy tidings to share. I am extremely proud to bring to your notice 17 of our students have been successful in the CA exam. This works out to a seventy percent success ratio whereas the overall success rate for the same for the Institute is only seven to eight percent for the final exam year 2015. I am immensely happy to send my greeting and good wishes along with our entire team to all successful budding stars of SPCM. The students of SPCM hold a special place in my heart. They have made us proud. I humbly recall my small contribution in the form of lectures delivered to them and I am sure such memories will also ring bells in you. Let us together celebrate this success! In our profession, it has been matter of pride that CA education lays considerable emphasis on practical training. Unfortunately, the evolving structure of the CA examinations with an excessive emphasis on rote learning through intensive coaching classes seems to have eroded the importance of this valuable input that comes with hands on training experience. The exams are perceived to be more a test of memory than test of students’ knowledge and understanding of the fundamental principles relate to our noble profession. Keeping that in mind we started the study circles for the students as well as for the partners and associates to overcome the problems faced when you learn only by rote. In our study circles we have elaborately discussed the fundamental foundational principles of our field at length and in depth.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME MONTHLY NEWSLETTER Chartered Accountants MONTHLY DUE DATES REGISTER FOR AUG 2015 EDITORIAL 6 th Aug 2015 ACT SERVICE TAX Particulars E- Payment of Service tax by Companies for July 2015 MONTHLY DUE DATES 7 th Aug 2015 INCOME TAX TDS/TCS Payment for the month of July 2015 SPCM ACTIVITIES 15 th Aug 2015 PROVIDENT FUND Provident Fund Payment for the month of July 2015 20 th Aug 2015 21 st Aug 2015 LOCAL BODY TAX ESIC 21 st Aug 2015 MVAT/CST Payment of Local Body Tax for July 2015 Employee State Insurance Corporation Payment for the month of July 2015 E-Payment of Monthly Tax & WCT TDS for July 2015 31 st Aug 2015 31 sr Aug 2015 31 st Aug 2015 MVAT/CST PROFESSION TAX LUXURY TAX INCOME TAX 31 st Aug 2015 INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA Due dates S P C M & ASSOCIATES FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS E-filling of Monthly Returns for July 2015 E-Payment of Monthly Tax for July 2015 Due date for filing of Income Tax return for AY 2015 -16 for assessee whose accounts are not required to be audited. Due date of filing annual information return u/s 285 BA for FY 2014 -15, for the specified persons & specified transactions listed in rule 114 E of the Income Tax Rules, 1962.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 MONTHLY NEWSLETTER HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES S P C M & ASSOCIATES Chartered Accountants SPCM ACTIVITIES - STUDY CIRCLE MEETINGS CONDUCTED DATE TOPICS 17/07/2015 Sec 195 of Income Tax Act, 24/07/2015 1961 and Form 15 CA & 15 CB 18/07/2015 Individual Income Tax Returns and Revised Returns 25/07/2015 Huf- Tools for Tax Planning 11/07/2015 Deduction under chapter VI A Of Income Tax Act, 1961 SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS GROUPS Partners & Qualified Assistants Students Group-I PRESENTERS Adv. Abhay Bora CHAIR PERSON CA Suhas Bora CA Pradip Kataria Mayuri Mandhane CA Chetan Parakh Students Group-III Neeraj Solanki Sandesh Jain CA Suhas Bora FORTHCOMING STUDY CIRCLE MEETINGS DATE TOPICS 21/08/2015 Applicability of Section 43 CA to the Builders & Developers & Issues out of Sec. 50 C 08/08/2015 Service Tax issues-real estate, composition schemes 22/08/2015 Service Tax – General GROUPS Partners & Qualified Assistants Students Group-II 29/08/2015 Schedule II & Amendments of Students companies Act, 2013 Group-III PRESENTERS CHAIR PERSON CA Manju Mishra CA Suhas Bora CA Pradip Kataria Karan Bora Suraj Somani CA Yogita Mutha Akshay Mukkawar Samruddhi Khedkar CA Chetan Parakh CA Manoj Jain

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 MONTHLY NEWSLETTER HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS S P C M & ASSOCIATES Chartered Accountants Income Tax Updates - CA Suhas Bora, CA Mehul Jain Income Tax Updates A. Notification and Circulars 1. Section 90 of the Income tax Act, 1961 - Double Taqxation Agreement-Agreement for Avoidance of double Taxation and preention of fiscal evasion with foreign countries-Denmark (Notification No. 45/2015 dated 22. 05. 2015 2. Sec. 154 of the Income Tax Act, 1961 - Rectification of Mistakes- Expeditious disposal of application of rectification U/Sec. 154 during F. Y. 2015 -16 ( Letter No. 225/148/2015 -ITA-II, dated 5. 06. 2015. 3. Sec. 119 of the Income Tax Act, 1961 - Income Tax Authorities – Instruction to subordinate Authorities - Condonation of delay in filling refund claim and claim of carry forward of losses U/Sec. 119(2)(b) ( Circular No. 9/2015 [F. No. 312/22/2015 OT] dated 9. 06. 2015 4. Extension of due date of filing of Return of Income for A. Y. 2015 -16 from 31. 07. 2015 to 31. 08. 2016 ( Order [ F. No. 225/154/2015/ITA. II] dated 10. 06. 2015 5. Section 251 of the Income Tax Act, 1961 - Commissioner (Appeals)- Powers- Issue of appellate order within 15 days of last hearing- Strict compliance thereof. ( Instruction [ F. No. 279/MISC/53/2003 -ITJ], dated 19. 06. 2015 6. The Central Board of Direct Taxes ('CBDT') vide Notification No. 41/2015 dated 15. 04. 2015 in cases of categories of 'persons' specified therein, has introduced Electronic Verification Code ('EVC') as one of the modes for validation of return of income which are filed electronically on or after 01. 04. 2015. (Order Under Section 119(1) Of Income-Tax Act, 1961 Validation Of Tax-Returns Through Electronic Verification Code) B. Recent Reported Decisions - High Court and ITAT 1. CIT vs. Agarwal enterprises 374 ITR 240 (Bom) Premiun on Keman Insurance on the partners life paid by the firm is allowable expenditure u/sec 37

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES MONTHLY NEWSLETTER 1. P. M. S Diesels vs. CIT (P&H High Court) S. 40(a)(ia): Argument that the disallowance for want of TDS can be made only for amounts "payable" as of 31 st March and not for those already "paid" is not correct. In Liminie dismissal of SLP in Vector Shipping does not mean Supreme Court has confirmed the view of the HC. However, ITAT to consider whether payees have already paid tax The argument that section 40(a)(ia) applies only to amounts which are “payable” and not to amounts that are already “paid” is also not acceptable (Commissioner of Income Tax vs. Crescent Export Syndicate (2013) 216 Taxman 258 (Cal) and Commissioner of Income Tax vs. Sikandar Khan N. Tunwar (2013) 357 ITR 312 (Guj) followed) 2. KPC Medical College & Hospital vs. DCIT (ITAT Kolkata) S. 271(1)(c): Law on levy of penalty in a case where satisfaction is recorded in s. 153 C/153 D assessments by AO who is common to the searched party and the assessee explained The attempt at the end of the assessee is that there should be a straight jacket system, whereby the satisfaction recorded even by the same AO then, that should be placed in the file of searched person and if it is placed in some other cupboard in his room by the AO then, there cannot be any satisfaction, we fail to appreciate that technical approach at the end of the assessee. The law does not require the manner and the procedure of keeping the files. The section only requires that a satisfaction be recorded and it should be during the period propounded by Hon’ble S. C. in CIT vs. Calcutta Knitwears 362 ITR 673 COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS Income Tax Updates - CA Suhas Bora, CA Mehul Jain C. Unreported Decisions SALES TAX UPDATES INVESTMENT BY RESIDENTS OUTSIDE INDIA Chartered Accountants 2. CIT vs. Voora Property Developers Pvt Ltd – 373 ITR 317 Composite Housing Schemes consisting of 6 blocks in area exceeding 1 acre – housing projects approved by DC Rules – separate plan permissions were obtained for 6 blocks – assessee entitled for deduction u/sec 80 IB(10). INCOME TAX UPDATES RETURNS UNDER MVAT ACT S P C M & ASSOCIATES

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME MONTHLY NEWSLETTER 4. Parin K. Rajwani vs. JCIT (ITAT Mumbai) 5. KLR Industries Ltd vs. DCIT (ITAT Hyderabad) SPCM ACTIVITIES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS Income Tax Updates - CA Suhas Bora, CA Mehul Jain CIT vs. Mahagun Technologies Pvt. Ltd (ITAT Delhi) MONTHLY DUE DATES SALES TAX UPDATES Chartered Accountants 3. EDITORIAL INCOME TAX UPDATES S P C M & ASSOCIATES S. 271 D: Section 269 SS does not apply to non-monetary book entry transactions of loans and advances Section 269 SS indicates that it applies to a transaction where a deposit or a loan is accepted by an assessee, otherwise than by an account payee cheque or an account payee draft. The ambit of the Section is clearly restricted to transaction involving acceptance of money and not intended to affect cases where a debit or a liability arises on account of book entries S. 271 D penalty: The limitation period has to be computed from the date of issue of the showcause notice by the AO. Penalty should be levied if circumstances show no intention to contravene the law The six month period for the purpose of clause (c) of section 275(1) of the Act is to be computed from the date of issue of first show cause notice by the AO and not from the date of issue of first show cause notice issued by the Joint Commissioner S. 68: If the assessee has furnished the details of the creditors with their PAN, the onus is on the AO to examine their credit-worthiness and source of payment to assessee If at all the A. O. or CIT(A) had any doubt with regard to creditworthiness of the creditors, it should have triggered an enquiry by the A. O. to find out the real facts. When the identity of the creditors along with their income tax particulars including PAN and assessment details were available with the A. O. it would not have been difficult on the part of the A. O. to verify their bank accounts and other details to ascertain whether the advances were from explained sources. Even the A. O. could have taken up the issue with the concerned A. Os with whom the creditors are assessed

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER A. RECENT AMENDMENTS S P C M & ASSOCIATES Chartered Accountants Sales Tax Updates – Adv. Abhay Bora SALES TAX UPDATES 1. Trade Circular No 9 T of 2015 Dt. 01/07/2015 The Commissioner of Sales Tax, Maharashtra State, Mumbai has issued Trade Circular No 9 T of 2015 clarifying that Sales Tax Department has made facility to accept payments under The Maharashtra Tax on the entry of Goods into Local Areas Act, 2002 through the GRAS Portal which has been made available from 01/07/2015. Procedure for submission of returns is explained in the circular. 2. Trade Circular No 10 T of 2015 Dt. 07/07/2015 The Commissioner of Sales Tax, Maharashtra State, Mumbai has issued Trade Circular No 10 T of 2015 on clarification regarding the revised procedure for registration under MVAT Act, 2002 and CST Act, 1956. 3. Trade Circular No 11 T of 2015 Dt. 13/07/2015 The Commissioner of Sales Tax, Maharashtra State, Mumbai has issued Trade Circular No 11 T of 2015 Dt. 13/07/2015 clarifying the position of law after the decision of Bombay High Court in the case of Tata Sons Ltd, Writ Petition No. 2818 of 2012 decided on 20/01/2015. The Law is now settled that VAT can be levied on transfer of right to use goods of intangible nature i. e trade mark, technical knowhow, copy right and other intangibles etc even if it is transferred to multiple users. B. GIST OF IMPORTANT DDQ’S 1. PBA Infrastructure Ltd. No. DDQ-11 -2011/Adm-3/6/B-1 dt. 07. 2015 The purchase of HSD-EURO III would not be eligible for set off under rule 54(b) of the MVAT Rules, 2005. The request for prospective effect is rejected. 2. Supreme Fibre Glass Pvt. Ltd. No. DDQ 11/2013/Adm-6/17/ B-2 dt. 20. 07. 2015 Wind Operated Turbo Ventilator, its spare parts are not covered by clause 12 of the notification under schedule entry C-82 but fall in E-1. Prospective effect request rejected.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Sales Tax Updates – Adv. Abhay Bora C. IMPORTANT JUDGEMENTS 1. Builders Association of India and others delivered by Hon’ble Bombay High Court (Writ Petition No. s 4520 of 2014, 2557 of 2014, 1148 of 2014 and 1258 of 2014 decided on 30 th April, 2015. ) The petitioners challenged the notification dtd. 29 th January, 2014 issued by the Finance department amending Rule 58(1 A) and inserting Rule 58 (1 B) under MVAT Rules, 2005. These rules deal with deduction of cost of land from the total agreement value in case of a works contract carried on by the builders/ developers and determination of taxable value in case of agreement entered into by them at a later stage. They also challenged the Trade Circulars purportedly explaining the said provisions bearing nos 7 T of 2014 dated 21 -2 -14 and 12 T of 2014 dated 17 -4 -14. The challenge was based on the fact that Rule 58(1 A) did not take into account the profit on the land other adjoining rights. It was contended that Rule 58(1 A) does not provide for the deductions in respect of costs towards acquisition of TDR/FSI, payments for eviction of tenants, clearance of encroachment of land, etc. It does not provide for deduction towards profit relatable to land though it allows the profit on supply of labour and services under clause (h) of Rule 58(1). It was concluded that Rules 58(1), 58(1 A) and 58(1 B) are measures of taxation and so long they have a nexus with the levy of tax, they cannot be declared as arbitrary or unconstitutional. The earlier judgment dated 10 th April. 2012 had elaborately considered the arguments relating to arbitrariness in Rule 58(1 A) and declared it as valid. The Court followed the said dictum and has held that Rules 58(1), 58(1 A) and 58(1 B) are not ultravires. It is also held that ‘material cost plus profit’ method is not tenable when the legislature has chosen a particular modality to determine the value of materials. With this, the writ petitions challenging the notification dtd 29 th January, 2014 and trade circulars bearing No. 7 T of 2014 dtd 21 -2 -14 and 12 T of 2014 dtd. 17 -4 -14 are dismissed.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Sales Tax Updates – Adv. Abhay Bora 2. The Addl. Commissioner of Sales Tax, VAT, III Mumbai Vs Indo Count Industries Ltd. VAT S. A. No 252, 253, 254 of 2013 Dt 24. 03. 2015 The Respondent is a manufacturer in Cotton Yarn, Hosiery Fabrics, Electronic goods, i. e. TV. Air Conditioners, made up articles of Fabric i. e. Bed sheets and holds Certificate of Entitlement during the period of assessment. The Respondent submitted assessment statements before the Deputy Commissioner of Sales Tax, Kolhapur for the assessment period for 2005 -06 to 2007 -08, precisely for the period 01. 04. 2005 to 31. 01. 2008. The Deputy Commissioner of Sales Tax by its assessment order dated 31. 03. 2011 allowed refund to the Respondent but rejected the claim of the Respondent for grant of interest under Section 53 on the delayed provisional refund. It is the settled position of law that the amendment of section or provision does not apply to proceedings commenced before amendment unless and until the legislature is absolutely clear while applying a provision retrospectively. The plain reading of the amended Section 51(4) of the MVAT Act clearly demonstrates that said provision has come into effect on 01. 05. 2011 with prospective effect and the legislature does not intend of its retrospectivety. After a careful perusal of the impugned judgment and order dated 01. 07. 2014, we are of the considered opinion that the Tribunal has rightly interpreted the provisions of Sections 51, 52 and 53 of the MVAT Act while partly allowing the Appeals. It is to be noted that a conjoint reading of the provisions of Sections 51 and 53 of MVAT Act and by applying the same to the facts of the present case, the court considered opinion that the Tribunal has rightly remanded the matter back to the Assessing Authority to calculate the period of delay as per observations made in the impugned judgment and has directed to award interest over delayed refund to the Respondent. The High Court considered view that the Tribunal has not committed any legal infirmity or error while passing the impugned judgment and order and the same does not require any interference at the hands of this court, the court further mention here that no substantial question of law as contemplated under Section 27 of the MVAT Act is involved in the present Appeals. T he Appeal was dismissed accordingly.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 MONTHLY NEWSLETTER HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS S P C M & ASSOCIATES Chartered Accountants Company Law Updates CA Manoj Jain CS Aditi Joshi SECRETARIAL STANDARDS To have better corporate accountability and disclosures THE INSTITUTE OF COMPANY SECRETARIES OF INDIA has issued the Secretarial standards which will result in better value enhancement to stakeholders including shareholders, regulators and international investors Such secretarial standards are approved by the central Government and are effective from 01. 07. 2015 Followings are the list of secretarial standards SR NO SS-1 SS-2 PARTICULARS MEETING OF BOARD OF DIRECTORS GENERAL MEETINGS Applicability SS – 1 MEETING OF BOARD OF DIRECTORS This Standard is applicable to the Meetings of Board of Directors of all companies incorporated under the Act except One Person Company (OPC) in which there is only one Director on its Board. The principles enunciated in this Standard for Meetings of the Board of Directors are also applicable to Meetings of Committee (s) of the Board, unless otherwise stated herein or stipulated by any other applicable Guidelines, Rules or Regulations. SS – 2 GENERAL MEETINGS This Standard is applicable to the All types of general meetings of all companies except one Person Company.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants REVERSE CHARGE MECHANISM – CA Chetan Parakh REVERSE CHARGE MECHANISM UNDER SERVICE TAX – AN INSIGHT Introduction: As a general rule in Service Tax regime, the person who is receiving Services (known as the Service Receiver or the Service Recipient) pays the Service Tax to the person who provides Services (also known as Service Provider) and in turn, the same is remitted to the governmental authorities (as a result of which these Taxes are known as indirect Taxes). However, having a small variant of the above convention was brought in to directly levy the Service Tax from the Service Receivers, which is the crux of Reverse Charge Mechanism. Brief History of the Reverse Charge Mechanism (RCM) RCM was introduced first by Notification No. 36/2004 specifying Persons liable to pay Service Tax. Where section 68(1) of the Finance Act provided, in the year 1994 that the Service Provider shall be the person liable to pay Service Tax, section 68(2) empowered the Government to prescribe Services wherein the Service Receiver instead of the Service Provider to be person liable to pay Service Tax. However the applicability of this mechanism was restricted to a few Services like Goods Transportation Services, Sponsorship Services and other 5 types of Services. A new proviso was introduced to section 68(2) where a slight variation of the above concept of Reverse Charge Mechanism was introduced; this was the ‘Partial Reverse Charge Mechanism’ (PRCM)wherein the burden of payment of Service Tax were shared between the Service Provider and Service Receiver. The onus of payment of Service Tax was shared between these two. This new concept was introduced and made operational by the Government after a notification following the enactment of Finance Act, 2012.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA 2. No threshold exemption of Rs. 10 lacs is available to Service Receiver (SR) as this exemption is available to Service Providers only. (Refer NN 33/2012 -St dt. 20 -06 -2012) 3. 4. 5. FAQ ON SECTION 195 The GST SELECT COMMITTEE REPORT REVERSE CHARGE MECHANISM – CA Chetan Parakh 1. Applicability of RCM/PRCM is dependent on the status & location of Service Receiver (SR) and Service Provider (SP) and taxability of service. RCM does not apply on non-taxable and exempted services but applies on abated services and where value is determined by valuation rules. COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX Chartered Accountants Some fundamental concepts of reverse/partial charge mechanism are : HOME liable SALES TAX UPDATES is Receiver Service e MONTHLY NEWSLETTER S P C M & ASSOCIATES 6. APPOINTMENT OF DIRECTORS 7. this category. liability as Cenvat Credit facility is available for output services only while it will be input service for Service Receiver. reverse charge mechanism; he cannot avail Cenvat credit of input or input services. But, Service Receiver (SR) who is paying service tax under RCM can avail Cenvat credit on the basis of challan evidencing payment of ST. This means, the liability to pay service tax arises as soon as the services have been provided by the service provider under service tax reverse charge mechanism. within 6 months of the issue of invoice, date of invoice shall be considered the point of taxation.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 MONTHLY NEWSLETTER HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS S P C M & ASSOCIATES Chartered Accountants REVERSE CHARGE MECHANISM – CA Chetan Parakh Summary in tabular format for service tax liability under Reverse Charge Mechanism is as under: Sr. Services on which service tax is to be paid on Reverse Charge No. Mechanism 1 Insurance Agency Service 1 A Recovery Agent Service 1 B 1 C 2 3 4 5 5 A 6 7 Category of Service Receiver, Portion of Category of Service Provider, Service Tax Liability & (Effective Rate of Portion of Service Tax Liability & service tax. ) (Effective Rate of service tax) Insurance Company-100% (14. 00%) Any Person - Nil Banking Company, Financial Institution Any Person - Nil and NBFC-100% (14. 00%) Mutual Fund Agent or Mutual Fund or Asset Management Mutual Fund Agent or Distributor-Nil Distributor Services Company-100% (14. 00%) Services of Selling or Marketing Lottery Distributor or Selling Agent. Selling or Marketing Agent-Nil Agent of Lottery Tickets 100% (14. 00%) Goods Transport Agency Service Any person -100% Any Person-Nil (4. 20%) Sponsorship Services Body Corporate or Partnership Firm. Any Person-Nil 100% (14. 00%) Any Person-100% Other than Body Corporate or (14%) since no Reverse Charge in Partnership firm-NIL such cases. Service of Arbitral Tribunal Business entity-100% (14. 00%) Arbitral Tribunal-Nil Service by Individual Advocate Business Entity-100% Individual or Firm-Nil or Firm of Advocates (14. 00%) Director Service Company or Body Corporate-100% Individual-Nil (14. 00%) Government Support Services Business Entity-100% (14. 00%) Government /Local Authority-Nil Renting of Passenger Vehicle Body Corporate-100% Individual/ HUF/ AOP/ Partnership After Abatement of 60% (5. 60%) firm / LLP-Nil Without Abatement Body Corporate-50% Individual/ HUF/ Partnership firm (7. 00%) AOP/ LLP-50% (7. 00%)

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Returns Under MVAT Act - CA Nikita Maniyar, CA Gaurav Oswal HOME Provisions relating to Filing of Returns under MVAT ACT, 2002: EDITORIAL Filing of returns is most important aspect under the tax laws. The provisions relating to filing of returns are as under: - MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA 1) Return Forms Every registered dealer has to file returns in the prescribed form as per the monthly, quarterly or half yearly periodicity decided by the department. Various types of forms prescribed for filing of MVAT returns alongwith its applicability are as under: Form no. 231 232 233 234 FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT 235 APPOINTMENT OF DIRECTORS III-E Dealers to whom applicable All VAT dealers other than dealers executing works contract, dealers engaged in leasing business, composition dealers (including dealers opting for composition only for part of the activity of the business), PSI dealers and notified Oil Companies. All composition dealers whose entire turnover is under composition (excluding works contractors opting for composition and dealers opting for composition only for part of the activity of the business) VAT Dealers who are in the business of executing works contracts, leasing or dealers opting for composition only for part of the activity of the business. PSI dealers holding Entitlement Certificate. (Transactions by PSI dealers relating to the business of Execution Of Works Contracts, Leasing, Trading and Composition only for part of the activity of the business to be included in a separate return in Form 233) Notified Oil Companies. (Transactions by Oil Companies relating to the business of execution of works contracts, leasing and composition only for part of the activity of the business to be included in a separate return in Form 233). All VAT dealers having Sales outside the state of Maharashtra.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME MONTHLY NEWSLETTER 2. MONTHLY DUE DATES 2 INCOME TAX UPDATES SALES TAX UPDATES 3 COMPANY LAW UPDATES INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS Returns Under MVAT Act - CA Nikita Maniyar, CA Gaurav Oswal Periodicity of filing VAT Returns: Sr no 1 SPCM ACTIVITIES RETURNS UNDER MVAT ACT Chartered Accountants As per the amended Rule 17, the criteria for deciding Periodicity for filing of VAT Returns are as under: EDITORIAL REVERSE CHARGE MECHANISM UNDER SERVICE TAX S P C M & ASSOCIATES Criteria Taxes paid are more than Rs 10 Lac or Refund is more than Rs. 1 Crore during the previous year. 1) Taxes paid are more than Rs 1 Lac but less than Rs 10 Lac or Refund is more than Rs. 10 Lac but less than Rs. 1 Crore during the previous year. 2) Dealers under Package Scheme of Incentive. 3) Newly registered Dealers for the first year 1) Taxes paid are less than Rs 1 Lac or Refund is less than Rs. 10 Lac during the previous year. 2) Retailers who have opted for Composition Scheme Periodicity Dealer is eligible to file Returns Monthly. Dealer is eligible to file Returns Quarterly. Dealer is eligible to file Returns Half Yearly. On the basis of this criteria, the Department of Sales Tax decides the periodicity of every dealer for each year and displays the same on the website of the department on 30 th April of every year. The Dealer has to mandatorily file the returns as per this periodicity decided by the Sales tax department. 3) Due Dates for Payment and Uploading VAT Returns : No 1 Periodicity Monthly Due date for payment (E- Payment is compulsory) 21 st of the next month. Due date for uploading of return Within 10 days from due date of payment 2 Quarterly 21 st of the first month after the end of the Quarter. 3 Half Yearly 30 th of the first month after the end of the Half Year. Within 10 days from due date of payment

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Returns Under MVAT Act - CA Nikita Maniyar, CA Gaurav Oswal 4) Late Fees for delay in uploading Return According to this Section 20(6), a Late Fee of Rs. 5000/- shall be imposed on any dealer for failure to file the Return within the prescribed time limit. However, as per the relaxation granted with effect from 1 st May, 2015, Late Fees for delay in filing of returns upto one month of delay shall be Rs 1000/- and for delay exceeding one month Late Fees payable shall be Rs. 5000/-. The late fee is mandatory without payment of which return cannot be uploaded. 5) Penalty for filing incorrect return (Section 29(9)) : If a Dealer has filed a Return and it is found to be incorrect, then the dealer is liable for penalty of Rs. 1000/- The penalty can be imposed only after giving the dealer a reasonable opportunity of bring heard. The order must be in writing. 6) Revised Returns (Section 20(4)) : Any registered dealer may furnish a revised Return in the following circumstances: a) Dealer finds discrepancy in the return [Sec 20(4)(a)]: Where the dealer discovers any omission or incorrect statement in the Original Return, he shall furnish a revised return under Section 20(4)(a) at any time before a notice for assessment is served by him in respect of period covered by the return or before expiry of 10 months from the end of the year to which the return relates. Return under this section is revised as per the original periodicity of the dealer. The dealer has restriction for filing revised returns under the above section only once for each period b) Discrepancies pointed out in the Audit Report under section 61 [Sec 20(4)(b)] : If any omission or incorrect statement in the return or revised return is pointed out in the Audit Report submitted under section 61, dealer may file a revised return under Section 20(4)(b) within 30 days from the date prescribed for furnishing Audit Report. Return under this section is to be revised annually. The dealer has restriction for filing revised return under the above section only once for each year.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Investment by Resident outside India - CA. Yogita Shailesh Muttha FEMA, 1999 Investment by Resident outside India – Part 2 Broadly there are two routes through which residents can invest abroad v. i. z. the Automatic Approval Route and the RBI Approval Route. I. Investments under Automatic Approval Route Investment by persons resident in India does not need any approval in any of the following cases: A) Liberalized Scheme 1. What is the Liberalised Remittance Scheme (LRS) of USD 2, 50, 000 ? Under this Scheme, Authorised Dealers (Banks dealing in foreign exchange) freely allow remittances by resident individuals up to USD 250, 000 per financial year (April-March) for any permitted current or capital account transactions or a combination of both. The facility is available to all resident individuals including minors. In case of remitter being a minor, the LRS declaration form should be signed by the minor’s natural guardian. 2. Where can we invest? Resident individuals are also permitted to acquire and hold immovable property using this scheme. In addition, the scheme may be used to purchase shares (of listed companies or otherwise) or debt instruments or any other asset outside India without prior approval of the Reserve Bank. 3. Can investment be made in Joint Ventures / Wholly Owned Subsidiaries abroad? Resident individuals are allowed to set up Joint Ventures / Wholly Owned Subsidiaries outside India for bona fide business activities outside India within the limit of USD 250, 000. It should be noted that, with

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 MONTHLY NEWSLETTER EDITORIAL Investment by Resident outside India - CA. Yogita Shailesh Muttha 4. Is investment in securities abroad permitted under this scheme? A resident individual can invest in units of Mutual Funds, Venture Capital Funds, unrated debt securities, promissory notes, etc. under this Scheme. MONTHLY DUE DATES SPCM ACTIVITIES To COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS Chartered Accountants effect from February 2015, the limit includes all foreign exchange used by an individual in a financial year. So, if an individual buys foreign exchange for travel or treatment abroad, the amount so bought will be deducted from the overall limit. HOME INCOME TAX UPDATES under ed Remittance Scheme, remittance outward the start SALES TAX UPDATES S P C M & ASSOCIATES 5. How to remit money under LRS? 1. bank and notify them about your decision and the amount involved. 2. which has to be filled with the complete and accurate details about the transaction. Note: Bankers insist customers to furnish form 15 CA/CB but this is not necessary for the remittance under Liberalised Remittance Scheme. 6. Are there any restrictions? The facility is not available for making remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan. 7. What are the prohibited items under the Scheme? The remittance facility under the Scheme is not available for the following: a. Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc. ) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000. b. Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty. c. Remittances for purchase of Foreign Currency Convertible Bonds (FCCBs) issued by Indian companies in the overseas secondary market.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER 10. S P C M & ASSOCIATES Chartered Accountants Investment by Resident outside India - CA. Yogita Shailesh Muttha deposits/investments abroad, over and above the principal amount? The investor can retain and reinvest the income earned on investments made under the Scheme. At present, the residents are not required to repatriate the funds or income generated out of investments made under the Scheme. However, a resident individual who has made overseas direct investment in the equity shares and compulsorily convertible preference shares of a Joint Venture or Wholly Owned Subsidiary outside India, within the LRS limit then he/she shall have to comply with the terms and conditions as prescribed by our overseas investment guidelines under Notification No. 263/ RB-2013 dated August 5, 2013. 11. Can remittances under the LRS facility be consolidated in respect of family members? Remittances under the facility can be consolidated in respect of close family members subject to the individual family members complying with the terms and conditions of the Scheme. However, clubbing is not permitted by other family members for capital account transactions such as opening a bank account/investment/purchase of property, if they are not the co-owners/co-partners of the investment/property/overseas bank account. 12. Are there any restrictions on the frequency of the remittance? There are no restrictions on the frequency of remittances under LRS. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD 2, 50, 000. Once a remittance is made for an amount up to USD 2, 50, 000 during the financial year, a resident individual would not be eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought back into the country.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL Any MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX cted be to has TDS RETURNS UNDER MVAT ACT 5 INVESTMENT BY RESIDENTS OUTSIDE INDIA Section FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants FAQ's: Section 195 - CA Suhas Bora CA Mehul Jain FAQ's: Section 195: TDS on Incomes of Non-Residents Q 1. Who is liable to deduct tax? Ans (other than company) or a foreign company. Q 2. On what type of payment is TDS deducted? Ans technical fee, royalty or any other sum (other than salary) chargeable under the Income Tax Act, 1961. Q 3. When must the tax be deducted? Ans At the time of credit of such income or at the time of payment, whichever is earlier. Q 4. At which rate must the tax be deducted? Ans as per the rates specified in the DTAA. Q 5. What if the payment to be made to the non-resident is exempt from tax? Ans Industries Limited (188 ITR 749) (Kar HC), GE India Pvt Ltd (327 ITR 456) (SC)) Q 6. Whether tax is to be withheld on payments in kind? Ans Yes. Tax is to be withheld on payments in kind. Relevant Case- Kanchanganga Sea Foods (325 ITR 540) (SC)

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES If SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT There APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants FAQ's: Section 195 - CA Suhas Bora CA Mehul Jain Q 7. Whether tax is to be held when no remittance on adjustment of dues? Ans Yes. Tax to be withheld even when no remittance on adjustment of dues. Relevant Case- Raymond Ltd. – (86 ITD 791) (Mum) (ITAT) Q 8. Whether With-Holding Tax is to be deducted in the case of advance payment? Ans attract WHT u/s 195. However, contradictory observations have been made in Flakt (I) Ltd. , In re [AAR at 267 ITR 727] Q 9. Whether TDS is deductible on Interest Income Tax Refund? Ans Yes. Withholding of Tax is applicable u/s 195. Dispute- Whether such income covered under Article 12 (Interest income) or Article 7 (business income)? Held by Del ITAT in Pride Foramer 116 TTJ 369 covered under Article 12. Q 10. Which exchange rate is applicable to convert amount to be remitted in INR? Ans SBI’s buying TT rate (Rule 26). Q 11. On which transactions form 15 CA and 15 CB are to be submitted? Ans a. Import of goods in India b. All other payments excluding interest, salary and dividend payments. Q 12. What is threshold limit for deduction of TDS? Ans the entire amount without any threshold limit.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants GST Select Committee Report – Adv. Abhay Bora Highlights of Report of 'Rajya Sabha Panel' on GST Bill The Highlights of Report of Select Committee on The Constitution 122 th Amendment Bill 2014, presented to the Rajya Sabha on 22 nd July 2015 are as under : 1. Band for GST-Rates The Bill empowered GST Council to make recommendations for the rates of goods and service tax including floor rates with bands. The Committee recommended that the word ‘band’ may be defined in GST laws as following: “Band”: Range of GST rates over the floor rate within which Central Goods and Service Tax (CGST) or State Goods and Service Tax (SGST) may be levied on any specified goods or services or any specified class of gods or services by the Central or a particular State Government as the case may be. In its report, The Committee mentioned that it was aware that while discharging the functions conferred upon the GST Council, it would be guided by the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services. It can be said that while construing above definition of ‘Band’ one has to ensure that harmonized structure of GST-rates must not be altered. 2. Voting pattern The Committee found no merit in altering the voting pattern proposed in the Bill. 3. Dispute Settlement Authority It also didn’t recommend inclusion of provision for GST Dispute Settlement Authority having noted that GST Council shall decide only the ‘modalities’ to resolve disputes.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants GST Select Committee Report – Adv. Abhay Bora 4. Definition of ‘Supply’ The Bill proposed definition of ‘goods and services tax’ to mean any tax on supply of goods, or services or both. The Committee opined that the term ‘supply’ would be defined in the various GST laws relating to CGST and SGST, therefore, it would not be appropriate to define the term ‘supply’ in the Bill. 5. Definition of ‘services’ The Bill proposed to define ‘services’ to mean anything other than goods. The Committee felt that term ‘services’ had been so defined in order to give it wide amplitude so that all supplies that are not goods can broadly be covered within the ambit of services and no activity remains outside the taxable net. It also opined that this would also minimize disputes. In view of the above, it proposed no change in the definition. 6. Additional Goods and Services Tax The Bill proposed to levy Non-Cenvatable additional tax at 1% on inter-State supply of goods. The Committee felt that the provision of 1% additional tax in its present form was likely to lead to cascading effect of taxes. Therefore, it strongly recommended that following Explanation should be added for word ‘supply’: Supply: “All forms of supply made for a consideration. ” 7. Compensation to States The Bill proposed that the Parliament ‘may’ compensate States for loss of revenue for a period which may be extended to five years. The Committee felt that there was no justification for substitution of the word ‘may’ with ‘shall’. It, however, recommended that compensation should be provided for whole period of five years

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GST SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants APPOINTMENT OF DIRECTORS – CA Manoj Jain, CS Aditi Deo APPOINTMENT OF DIRECTORS To run the company it is always required the managers of the company should be capable of directing the staff as well as owners of the company to take the proper decision and to active the object of the company that is to maximize the profit and to reduce the cost. Directors are the persons who look after the day to day business activities of the company for the owners of the company. Directors of a company hold the most crucial position in the Company. With the new Companies Act, 2013 (“New Act“) already in force, their position has become even more significant than ever before. They are now formally included within the definition of “key managerial personnel” or “KMP” under Section 2(51) of the New Act. The director should be the individual person to run the business no artificial person such as Company, LLP, and Partnership Firm etc. Can be the Directors of the Company. Minimum Number of Directors (At least one director should be the Indian Resident as per the definition of resident in the Income Tax Act 1962) In One Person Company – 1 Director In Private Limited Companies – 2 Directors In Private Limited Company – 3 Directors Therefore OPC Can start with the resident Director only if there is only one director in OPC. Maximum 15 Directors can be appointed in One Company. If the company wants to increase the number of directors more than 15 then the company should pass the special resolution the meeting of the shareholders of the Company.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy AUGUST 2015 HOME EDITORIAL MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES SALES TAX UPDATES COMPANY LAW UPDATES REVERSE CHARGE MECHANISM UNDER SERVICE TAX RETURNS UNDER MVAT ACT INVESTMENT BY RESIDENTS OUTSIDE INDIA FAQ ON SECTION 195 GET SELECT COMMITTEE REPORT APPOINTMENT OF DIRECTORS MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants APPOINTMENT OF DIRECTORS – CA Manoj Jain, CS Aditi Deo Types of Directors Woman Director / Independent Director / Additional Director / Nominee Director / Alternate Director / Company Secretary Procedure for appointment of Director 1. Select the person of the competence 2. Check the Provision in the Articles of Association. 3. Take the Digital Signature of the person 4. Apply for The Director Identification Number ( If the person already having DIN need to apply for the same) 5. Take the KYC of the Director 6. Take the Consent Letter from the Director in the format specified in the Companies Act 2013. ( DIR-2) 7. Intimation by Director in form DIR-8 in terms of Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that he/ she is not disqualified u/s 164(2) of Companies Act, 2014. - 8. Disclosure of Interest in Form MBP-1 pursuant to Section 184(1) read with Rule 9(1) of Companies (Meetings of Board and its Powers) Rules, 2014. {One thing should be noted MBP-1 should not be dated earlier than date of his/her appointment as Director}. 9. Hold the Board meeting or the shareholders meeting depending upon the nature of director is being appointed and pass the resolution for appointment. 10. Issue the Letter of Appointment to the proposed director 11. File the Form DIR-12 with the registrar of companies within 30 days from the date of appointment. 12. If the additional Director is appointed the can act Till AGM of company. If company wants to appoint him as director then regularize the person as director in General Meeting by Share holder Resolution. File form DIR-12 for Change in Designation of Director along with ordinary resolution. Good Managers Good Governance