IndianCAs: Audit Report and Income tax Return date Extended [1 Attachment]

 

[Attachment(s) from Ashwin Nagar included below]

In writ petitions filed by All India Chartered Accountants Forum etc. CBDT has agreed to extend the date of filing Tax Audit Report & I/Tax return upto 31/10/2013 for assessees whose due date of return filing was 30/9/2013 in view of difficulties pointed out in writ petitions & representation filed with CBDT as per Delhi High Court's direction..

Notification attached.

sent by-CA Hiren Mehta

| Ashwin Nagar | FCA and SAP-Finance & Consolidations |+919833015352

Success is not permanent and failure is not final

 

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Attachment(s) from Ashwin Nagar

1 of 1 File(s)

Order_Us119_24_10_2013.pdf

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No More NIL TDS Returns

"Nil TDS Return" no Need to submit after 01.10.2013

 by CPC.

With effect from 01.10.2013 new version of FVU i.e. 4.00 is published by the TIN-NSDL in place of FVU 3.7 with latest new key features. The latest FVU Ver. 4.00 contains "NIL" TDS/TCS Return but while generating validation through FVU Ver. 4.00, TDS/TCS statement can'not be filed without quoting any valid Challan or deductee row. It means that NIL TDS Return no needs to submit TDS/TCS Return and thus CPC has also released important instructions on 07.10.2013 in the interest of deductors about submission of TDS/TCS return which is as under:

Dear Deductor,

You are the esteemed stakeholder of CPC (TDS). As the due date of filing of quarterly TDS statement for second quarter of Fin. Year 2013-14 is approaching fast, you are advised to file TDS statement well before due date (15th October for Non-Government deductors and 31st October for Government deductors). You are requested to make note of the following facts before filing the quarterly TDS statement: 

1.            Correct Reporting: Cancellation of TDS statement and deductee row is no longer permissible. Accordingly, it is very important to report correct and valid particulars (TAN of the deductor, Category (Government / Non-Government) of the deductor, PAN of the deductees and other particulars of deduction of tax) in the quarterly TDS statement.

2.            Quote correct and valid lower rate TDS certificate in TDS statement wherever the TDS has been deducted at lower / zero rate on the basis of certificate issued by the Assessing Officer.

3.            Last provisional receipt number to be quoted in regular TDS / TCS statements: While filing new regular (original) TDS statement, it is mandatory to quote the last accepted provisional receipt number of the regular quarterly TDS / TCS statement of any form type.

4.            TDS statement cannot be filed without quoting any valid challan and deductee row

5.            Late filing fee, being statutory in nature, cannot be waived

6.            Download PAN Master from TRACES and use the same to file new statement to avoid quoting of incorrect and invalid PAN.

7.            Validate PAN and name of fresh deductees from TRACES before quoting it in TDS statement.

8.            Download TDS certificate (Form16A) from TRACES (www.tdscpc.gov. in) bearing unique TDS certificate number and issue to the taxpayers within due date.

9.            File correction statements promptly in case of incomplete and incorrect reporting.

10.         Download the justification report to know the details of TDS defaults, if any, on processing of TDS statement.

11.         Do view your Dashboard regularly to know about your TDS performance.

12.         Government deductors should obtain BIN (Book Identification Number) from their Accounts Officer (AIN holder) in time and quote the same correctly in TDS statement.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) Team

CBEC on ST on Restaurants

Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs Tax Research Unit North Block, New Delhi CIRCULAR NO 173/8/2013-ST., Dated: October 7, 2013 To Chief Commissioners of Central Excise and Customs (All), Director General (Service Tax), Director General (Central Excise Intelligence), Director General (Audit), Commissioners of Service Tax (All) Commissioners of Central Excise (All), Commissioners of Central Excise and Customs (All). Madam/Sir, Subject: Restaurant Service- clarification -regarding As part of the Budget exercise 2013, the exemption for services provided by specified restaurants extended vide serial number 19 of Notification 25/2012-ST was modified vide para 1 (iii) of Notification 3/2013-ST. This has become operational on the 1 st of April, 2013. 2. In this context, representations have been received. On the doubts and questions raised therein clarifications are as follows: Doubts Clarifications 1. In a complex where air conditioned as well as non-air conditioned restaurants are operational but food is sourced from the common kitchen, will service tax arise in the non-air conditioned restaurant? Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess, having the facility of air conditioning or central air heating in any part of the establishment, at any time during the year (hereinafter referred as 'specified restaurant') attracts service tax. In a complex, if there is more than one restaurant, which are clearly demarcated and separately named but food is sourced from a common kitchen, only the service provided in the specified restaurant is liable to service tax and service provided in a non air-conditioned or non centrally air- heated restaurant will not be liable to service tax. In such cases, service provided in the non air-conditioned / non-centrally air-heated restaurant will be treated as exempted service and credit entitlement will be as per the Cenvat Credit Rules. 2. In a hotel, if services are provided by a specified restaurant in other areas e.g. swimming pool or an open area attached to the restaurant, will service tax arise? Yes. Services provided by specified restaurant in other areas of the hotel are liable to service tax. 3. Whether service tax is leviable on goods sold on MRP basis across the counter as part of the Bill/invoice. If goods are sold on MRP basis (fixed under the Legal Metrology Act) they have to be excluded from total amount for the determination of value of service portion. 3. Trade Notice/Public Notice may be issued to the field formations and taxpayers. Please acknowledge receipt of this Circular. Hindi version follows. F.No.334/3/2013-TRU (S. Jayaprahasam) Technical Officer, TRU

Service Tax Return Due Date -25-10-2013

  Service Tax Return (ST-3) for the period April -September' 13 is now available in ACES for e-filing by the assesses in both offline and online version. The last date of filing the ST-3 return for the said period is 25th October, 2013. The assesses can file return either online or use the offline utility by downloading the latest version from http://acesdownload.nic.in/ or from 'DOWNLOADS' Section of ACES website. For details on how to e-file in ACES or any further information/assistance, assessees may read the Instructions given in the return form and the FAQs under 'Help' Section of the ACES website http://www.aces.gov.in/ (https://www.aces.gov.in) or contact their jurisdictional Service Tax Officer.

164 Joint Commissioners of Income tax Appointed in India

Dear Members, CBDT Order On Appointment Of IRS Officers As Joint Commissioners The CBDT has issued Order No. 186 of 2013 dated 01.10.2013 stating that the President has appointed 164 officers of the India Revenue Service (Income Tax) to the grade of Joint Commissioner of Income-tax purely on Ad-hoc basis in the pay scale of Rs. 15,600-39,100 + 7,600/- with immediate effect and until further orders. We wish all the appointees good luck in their new posting.

TDS Credit must be given even if TDS Certificate is not available/ entry is not shown in Form26AS

TDS Credit must be given even if TDS Certificate is not available/ entry is not shown in Form26AS

Citicorp Finance (India) Ltd vs. ACIT (ITAT Mumbai)

The assessee claimed credit for TDS which was denied by the AO on the ground that the claim did not match the entries shown in Form No. 26AS and that there was a discrepancy. On appeal, the CIT(A) held that the assessee would be entitled to credit to the extent shown in the computer system of the department. On further appeal by the assessee to the Tribunal HELD:

The AO is not justified in denying credit for TDS on the ground that the TDS is not reflected in the computer generated Form 26AS. In Yashpal Sahwney 293 ITR 539 the Bombay High Court has noted the difficulty faced by taxpayers in the matter of credit of TDS and held that even if the deductor had not issued a TDS certificate, still the claim of the assessee has to be considered on the basis of the evidence produced for deduction of tax at source. The Revenue is empowered to recover tax from the person responsible if he had not deducted tax at source or after deducting failed to deposit with Central Government. The Delhi High Court has in Court On Its Own Motion Vs. CIT 352 ITR 273 directed the department to ensure that credit is given to the assessee even where the deductor had failed to upload the correct details in Form 26AS on the basis of evidence produced before the department. Therefore, the department is required to give credit for TDS once valid TDS certificate had been produced or even where the deductor had not issued TDS certificates on the basis of evidence produced by assessee regarding deduction of tax at source and on the basis of indemnity bond.

HC on VCES

The Government introduced Service tax Voluntary Compliance Encouragement Scheme (the Amnesty Scheme) vide Union Budget 2013. The purpose of this Scheme is to provide for one-time waiver in respect of interest, penalty and immunity from prosecution for tax defaults (non-payment of tax) upon settlement of tax dues in a specified manner.

 In this regard, in a recent ruling of Allahabad High Court (the High Court) in the case of Anand Caterer, the High Court has held that when any taxpayer has filed an application under the Amnesty Scheme even after a demand notice/ Order has been being issued, no recovery proceedings could be undertaken until such application has been disposed off.

Reset of password ofITD website

Reset of password on ITD website with registered digital sigbature activated. Helpful for assessess who have forgot thier credentials. Happy efiling..

Income tax Department under Gujarat Region open on weekends

All Offices of Income tax Department under Gujarat Region will remain open on Saturday, 28^th September 2013 and Sunday 29^th September 2013 for accepting  Income Tax Returns and Tax Audit Reports in physical form.

Further on Monday 30^th September 2013 the same will remain open till 08.00 pm. for accepting  Income Tax Returns and Tax Audit Reports in physical form.

Audit Filling Extension-Press release

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

PRESS RELEASE

26^th September, 2013

      

          It has come to the notice of the  CBDT that may assessees who are required to file their income tax returns by September 30, 2013 are finding it difficult to upload the report of Audit electronically as prescribed under the proviso to sub-rule(2) of Rule 12 of the IT Rules for the Assessment Year 2013-14.  Therefore, the CBDT has decided to extend the time for furnishing the report of Audit electronically till October 31, 2013.  However, the assessees are required to file the report of Audit manually with the jurisdictional Assessing Officer by the prescribed due date, i.e. September 30, 2013.  The assessees are also required to file their returns of income electronically by the prescribed due date, i.e. September 30, 2013.

  

(Rekha Shukla)

Commissioner of Income Tax

(Media & Technical Policy Co-ordination)

  Official Spokesperson, CBDT

Safe Harbour Rules Finalized

Press Information Bureau 
Government of India
Ministry of Finance 

18-September-2013 15:49 IST

Safe Harbour Rules Finalized after Considering Comments of Various Stake Holders ; Rules to be Applicable for 5 Assessment Years Beginning from Assessment Year 2013-14 

            Section 92CB of the Income-tax Act provides for framing of safe harbour rules. The determination of arms length price u/s 92C or 92CA of the Act is subject to these safe harbour rules. The definition of safe harbour rule provided in section 92CB means circumstances in which the Income-tax Authority shall accept the transfer price declared by the assessee.

            The draft safe harbour rules were placed in public domain along with Central Board of Direct Taxes (CBDT) Press Release on 14.08.2013 seeking comments of various stake holders. The comments received from various stake holders have been considered and necessary modifications have been made to the draft rules. The finalized safe harbour rules are being notified separately. The salient feature of the modifications incorporated in the final safe harbour rules are:-

(i)                 The safe harbour rules shall be applicable for 5 assessment years beginning from assessment year 2013-14.

(ii)               An assessee can opt for the safe harbour regime for a period of his choice but not exceeding 5 assessment years. This option can be exercised by filing of Form 3CEFA which has been prescribed in the rules.

(iii)             In case of transactions in the nature of routine ITES and ITS activities  the  earlier ceiling of Rs 100 crore has been removed. Transactions upto Rs. 500 crore have been provided safe harbour margin of 20% and transaction above Rs.500 crore  have been provided safe harbour margin of 22% .Similarly, the ceiling of Rs. 100 crore provided for transactions in the nature of corporate guarantee has been removed. The Safe harbour would be available in case of transactions above Rs 100 crore only if the wholly owned subsidiary has been rated to be of adequate to highest safety by a rating agency registered with SEBI. The safe harbour margin for such transactions above Rs 100 crore has been reduced to 1.75% of the amount guaranteed.

(iv)             The definition of Knowledge process outsourcing (KPO) has been rationalized to provide reasonable distinction from routine business process outsourcing activity. The safe harbour operating margin has been reduced from 30% to 25%. Further the ceiling in respect of KPO transactions has been removed.

(v)               The safe harbour provisions would be available only if the assessee satisfies the eligibility conditions provided in the rules and in respect of such international transactions which are eligible for safe harbour as provided in the rules.

(vi)             The rules provide for a time bound procedure for determination of the eligibility of the assessee and the international transactions. Any rejection of the option exercised by the assessee shall be by way of a reasoned order passed after hearing the assessee. The assessee shall have a right to file an objection with the Commissioner against adverse finding regarding the eligibility. The Commissioner shall thereafter decide about the validity of the option exercised by the assessee.

(vii)           In case the action is not taken by any of the authorities within the following time lines  provided in the rules the option exercised by the assessee shall be treated as valid,:-

(a)    the reference by the Assessing Officer (AO) to the Transfer Pricing Officer (TPO) shall be made within a period of two months from the end of the month in which Form No.3CEFA is received by him;

(b)   the TPO shall pass an order determining the validity of the option exercised by the assessee within a period of two months from the end of the month in which reference from AO is received by him;

(c)    the Commissioner shall pass an order on the objection received from the assessee within a period of two months from the end of the month in which the objection has been received by him.

(viii)         Once the option exercise by the assessee is held to be valid it shall remain so for the period opted unless the assessee voluntarily opts out of safe harbour regime by furnishing a statement to this effect to the Assessing Officer.

(ix)             The assessee shall be required to submit a statement regarding the quantum of international transaction, its nature and the operating margins or rate of interest or commission for the relevant assessment years covered under the period for which safe harbour is option is exercised.

(x)               The option exercised by the assessee can be held invalid in an assessment year following the initial assessment year only if there is change in the facts and circumstances relating to the eligibility of the assessee or of the international transaction. However, such withdrawal shall be done only after providing opportunity of being heard to the assessee.  The assessee has a right to file his objection with the Commissioner, who shall after hearing the assessee determine the validity of the option.

*****

DSM/MJPS/ka

Alert on ITR Vs

Notification for Extension of date for receipt of ITR-Vs in CPC, Bengaluru, for the cases of AY 2012-13 and 2011-12 received in e-filed in FY 2012-13

Alert on Advance Tax

Ministry of Finance12-September, 2013 15:26 IST

Payment of Quarterly Advance Tax on or before 15th September, 2013; All Designated Branches of Authorized Banks to Function on 14th and 15th September, 2013 (Saturday & Sunday)

All designated branches of authorized banks have been asked to function on 14th and 15th September, 2013 (Saturday & Sunday) to accept advance tax payments. If any tax payer fails to pay the advance tax on 14th/15th September, 2013, then he/she can make the payment even on 16th September, 2013.  Payment of Quarterly Advance Tax on or before 15th September, 2013 by the tax payers is a statutory requirement. All such tax payers who are liable to pay advance tax must make payments in the designated branches of the banks authorized to accept tax payments.  ***** DSM/MJPS/ka  (Release ID :99304)

Draft Rules under Companies Act,2013

http://14.140.191.91/

This e-platform for receiving suggestions on draft rules under the Companies Act 2013 has been developed in a user friendly and interactive manner, and will facilitate collation and analysis of suggestions/comments received on the draft rules. Stakeholders are requested to use this platform for providing their suggestions and comments on the draft rules.

30 days left for giving Suggestions on Rules

PFA

Revised Form 15CA-15CB

Twists and turns in Form 15CA and Form 15CB – Comparison of old, new and recent changes

The CBDT has issued Twelfth Amendment Rules on August 5, 2013 vide Notification No. 58/2013 whereby it amended Rule 37BB and prescribed new Forms 15CA and 15CB. However, within a couple of weeks, the CBDT issued one more amendment to Rule 37BB in suppression of earlier notification (amendment rules). The new Forms provide for two categories (.i.e., Part A and Part B of Form 15CA) on which remittances are required to be reported. It provides that only taxable remittances (including salary or interest) are required to be reported in Form 15CA. Before the Twelfth Amendment Rules, the payers were required to submit the remittance details in Form 15CA and they were also required to obtain certificate under Form 15CB, notwithstanding whether the payee was liable to tax in India or not? Then Twelfth Amendment Rules extended some relaxation and provided immunity from obtaining certificate under Form 15CB for certain remittances. Now Fourteenth Amendment Rules provide exemption from filing of Form 15CA if remittance is not chargeable to tax in the hands of payee, it also provides immunity from obtaining Form 15CB if the taxable remittances are covered by Part A of new Form 15CA.

Statement by Dr. Raghuram Rajan on taking office on September 4, 2013

Date : 04 Sep 2013 Dr. Raghuram Rajan assumes charge as Governor, RBI Dr. Raghuram Rajan assumed charge as the 23rd Governor of the Reserve Bank of India on September 4, 2013. Prior to this, he was the Chief Economic Advisor, Ministry of Finance, Government of India and the Eric J. Gleacher Distinguished Service Professor of Finance at the University of Chicago's Booth School. Between 2003 and 2006, Dr. Rajan was the Chief Economist and Director of Research at the International Monetary Fund. Dr. Rajan's research interests are in banking, corporate finance, and economic development, especially the role finance plays in it. He has co-authored Saving Capitalism from the Capitalists with Luigi Zingales in 2003. He then wrote Fault Lines: How Hidden Fractures Still Threaten the World Economy, for which he was awarded the Financial Times-Goldman Sachs prize for best business book in 2010. Dr. Rajan is a member of the Group of Thirty. He was the President of the American Finance Association in 2011 and is a member of the American Academy of Arts and Sciences. In January 2003, the American Finance Association awarded Dr. Rajan the inaugural Fischer Black Prize for the best finance researcher under the age of 40. The other awards he has received include the global Indian of the year award from NASSCOM in 2011, the Infosys prize for the Economic Sciences in 2012, and the Center for Financial Studies-Deutsche Bank Prize for financial economics in 2013. Born on February 3, 1963, Dr. Rajan is married to Radhika and has two children. Alpana Killawala Principal Chief General Manager Press Release : 2013-2014/489

Customs Baggage Regulations,2013

90/2013 Dated 29-8-2013 - Customs - Non Tariff - Customs Baggage Declaration Regulations, 2013

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)] Government of India Ministry of Finance (Department of Revenue) Notification No. 90/2013-Customs (N.T.) New Delhi Dated the 29th August, 2013 G.S.R.     - In exercise of the powers conferred by clause (a) of section 81 of the Customs Act, 1962, the Central Board of Excise and Customs hereby makes the following regulations, namely:— 1. Short title. - These regulations may be called the Customs Baggage Declaration Regulations, 2013. 2. Extent of application. - These regulations shall apply to baggage including any package comprised therein of the passengers coming to India. These regulations will come into effect w.e.f. 1st January, 2014. 3. Method of Declaration of Baggage. - All passengers who come to India shall declare their accompanied baggage in Form I appended to this regulation. [F. No. 520/13/2013-Cus.VI] (S.C. Ganger) Under Secretary to the Government of India

CIRCULAR ON TDS MISMATCH

CBDT Instruction Regarding Unmatched TDS Challans In Form 26AS

August 31st, 2013

Pursuant to the judgement of the Delhi High Court in Court on Its Own Motion vs. UOI 352 ITR 273, the CBDT has issued Instruction No. 11 of 2013 dated 27.08.2013 stating that where the report by the deductor in the TDS statement are not found available in the OLTAS database resulting in TDS mismatch, the CPC(TDS)/ AOs(TDS) shall immediately issue letters to the deductors, in whose case TDS challans are unmatched, with a view to verify and correct these challans. If necessary, the deductors may be asked to file correction statements, as per the procedure laid down and necessary follow up action be taken. It has been directed that the task should be completed by 31st December 2013 for FY 2012-13 in the case of CPC (TDS) and FYs 2011-12 & earlier in case of AOs (TDS)

HUF-LLP PARTNER

SECTION 5 OF THE LIMITED LIABILITY PARTNERSHIP ACT, 2008 - PARTNERS - WHETHER HINDU UNDIVIDED FAMILY (HUF)/ITS KARTA CAN BECOME PARTNER/DESIGNATED PARTNER (DP) IN LIMITED LIABILITY PARTNERSHIP (LLP)

GENERAL CIRCULAR NO. 13/2013 [F.NO. 1/13/2012-CL-V], DATED 29-7-2013

It has come to the notice of the Ministry that some Hindu Undivided Families (HUFs)/Kartas of such families are applying to become partner/ Designated partner (DP) in LLPs and a question has arisen whether a 'HUF' or a karta can be allowed to do so. The matter has been examined in consultation with Ministry of Law.

2. As per section 5 of LLP Act, 2008 only an individual or body corporate may be a partner in a Limited Liability Partnership. A HUF cannot be treated as a body corporate for the purposes of LLP Act, 2008. Therefore, a HUF or its karta can not become designated partner in LLP.

3. This issues with the approval of Secretary, MCA

ST Return Due Date Extended

ORDER NO 4/2013-Service Tax, Dated : August 30, 2013

In exercise of the powers conferred by sub-rule(4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the Form ST-3 for the period from 1^st October 2012 to 31^st March 2013, from 31^st August, 2013 to 10^thSeptember, 2013.

The circumstances of a special nature, which have given rise to this extension of time, are as follows:

"Difficulties have been faced by assessees in uploading the offline utilities".

F.No.137/99/2011-Service Tax

Himani Bhayana
Under Secretary (Service Tax) 
Central Board of Excise and Customs

NO TDS ON SERVICE TAX PORTION

ATDS breather on service tax portion

The Rajasthan High Court, in the case of Rajasthan Urban Infrastructure Development Project, ruled that no tax need be withheld under Section 194J on the service tax payable on professional/ technical fees.

Interestingly, the Central Board of Direct Taxes had in an earlier circular held that the scope of withholding tax under Section 194J includes 'any sum' by way of professional/ technical services, and withholding tax applies on the service tax component as well.

However, the High Court ruled that if service tax is payable in addition to professional/ technical fees under the contract, the withholding tax will be restricted to the fees, thereby highlighting that examination of contract terms is imperative.

This ruling may also be relevant in the context of other similarly worded withholding tax provisions.

Very Important Alert on e Filing of Tax Audit Report

Dear Members,

Please note that there is clear instructions from Income-tax Department wherever there is requirement in the Form to be submitted a signed copy of document by an Assessee/ CA as an attachment, upload the scanned copy of the same documents.

Please see the instruction in ITD website.

Please adhere to the instruction while e filing the Balance Sheet and Profit and Loss while uploading the tax audit report.

Parliament Passes Companies Bill,2012

Dear Members,

Parliament Passes the Historic Companies Bill 2012

             

The Parliament has passed the historic Companies Bill 2012, moved by Shri Sachin Pilot, Minister of Corporate Affairs. The Bill was passed by the Rajya Sabha here today which had already been passed by the Lok Sabha many months ago (in December 2012). Shri Pilot has termed it as a historic day for the country as it will usher in a new era in the Corporate Governance.

The new Companies Bill, on its enactment, will allow the country to have a modern legislation for growth and regulation of corporate sector in India. The existing statute for regulation of companies in the country, viz. the Companies Act, 1956 had been under consideration for quite long for comprehensive revision in view of the changing economic and commercial environment nationally as well as internationally. The new law will facilitate business-friendly corporate regulation, improve corporate governance norms, enhance accountability on the part of corporates/ auditors, raise levels of transparency and protect interests of investors, particularly small investors.

The salient features of the new Companies law are: Business friendly corporate Regulation/ pro-business initiatives; e-Governance Initiatives; Good Corporate Governance and CSR; Enhanced Disclosure norms; Enhanced accountability of Management; Stricter enforcement; Audit accountability; Protection for minority shareholders; Investor protection and activism; Better framework for insolvency regulation; and Institutional structure. Other important features of the Companies Bill, 2012 are:  

(i)   Enhanced Accountability on the part of Companies: 

(a) In addition to the concept of Independent Directors (IDs) introduced, the provisions in respect of their tenure and liability etc have been provided. Code for IDs provided in a new Schedule to the Bill. Databank for IDs proposed to be maintained by a body/institute notified by the Central Government to facilitate appointment of IDs. (Clauses 149(10); 149(11); 149(7); 150);

(b) Corporate Social Responsibility (CSR) Committee of the Board proposed in addition to other Committees of the Board viz Audit Committee, Nomination and Remuneration and Stakeholders Relationship Committee. These committees shall have IDs/non executive directors to bring more independence in Board functioning and for protection of interests of minority shareholders. (Clauses 135, 177 and 178);

(c)  Provisions in respect of vigil mechanism (whistle blowing) proposed to enable a company to evolve a process to encourage ethical corporate behavior, while rewarding employees for their integrity and for providing valuable information to the management on deviant practices. (Clause 177 (9) and 177 (10));

(d)   New provisions suggested for allowing re-opening of accounts in certain cases with due safeguards. (Clause 130 and 131).

(ii)     Audit Accountability:

(a) Rotation of auditors and audit firms being provided for. (Clause 139 (2));

(b) Stricter and more accountable role for auditor being retained. Provisions relating to prohibiting auditor from performing non-audit services revised to ensure independence and accountability of auditor.  (Clause 141 and Clause 144);

(c) National Advisory Committee on Accounting and Auditing Standards (NACAAS) proposed to be renamed as National Financial Reporting Authority (NFRA) with a mandate to ensure monitoring and compliance of accounting and auditing standards and to oversee quality of service of professionals associated with compliance. 

(iii) Facilitating Mergers/ Acquisitions:

Simplified procedure (through confirmation by the  Central Government), laid down for compromise or arrangement including for merger or amalgamation of holding companies  and wholly owned subsidiary (ies), between two or more small companies and for such other class or classes of companies as may be prescribed. This would result into faster decisions on approvals for mergers and amalgamations resulting effective restructuring in companies and growth in the economy. For other companies, such matters would be approved by Tribunal. (Clause 233 and 232).

(iv)   Investor Protection:

(a) Acceptance of deposits from public subject to a more stringent regime. (Clause 76);

(b) Provisions for Class Action Suits revised to provide minimum number of persons who may apply for such suits. Safeguards against misuse of these provisions also being included. (Clause 245).

(v)   National Company Law Tribunal (Tribunal): Keeping in view the Supreme Court's Judgment, on the 11th May, 2010 on the composition and constitution of the Tribunal, modifications relating to qualification and experience etc of the members of the Tribunal have been made. Appeals from Tribunal shall lie to National Company Law Appellate Tribunal. (Chapter XXVII).

-----------------------------

CBEC on VCES

Dear Members,

The CBEC has issued Circular No. 170/5 /2013 ST dated 08.08.2013 (as attached) clarifying references received by the Board seeking further clarifications as regards the scope and applicability of the VCES Scheme. Some of the issues raised with reference to the Scheme have been clarified by the Board vide circular No. 169/4/2013-ST, dated 13.5.2013. The Union Finance Minister, Mr P. Chidambaram, has also released a booklet containing Frequently Asked Questions (FAQ) on Service Tax Voluntary Compliance Encouragement Scheme, 2013 in New Delhi today in the presence of Revenue Secretary, Chairperson and other members of Central Board of Excise & Customs and media.

Service Tax Voluntary Compliance Encouragement Scheme (VCES) announced by the Finance Minister in his Budget speech has come into effect on 10 th May, 2013. The objective of the scheme is to encourage disclosure of Tax dues and compliance of Service Tax law by the persons who have not paid service tax dues for the period from Oct, 2007 to Dec, 2012, either on account of ignorance of law or otherwise. On payment of the tax dues relating to the said period there will be complete waiver of interest, penalty and other proceedings/ consequences.

Best Wishes

CA. V.M.V.SUBBA RAO
Chartered Accountant