Sebi to make listing start-ups attractive

The Securities and Exchange Board of India (Sebi) may soon bring in a slew of changes to make it attractive for startups to list on the bourses.
Among other things, the regulator may broaden the definition of startups to include non-tech companies and allow them to list directly on the main board of stock exchanges under a separate segment.
The changes are part of the proposals prepared by a Sebi-appointed panel to revive startup listings. The regulator is expected to take a final call on these proposals later this month.
The regulatory framework for institutional trading platform (ITP) was announced on August 14, 2015, to enable listing of new-age and technologically-intensive companies in sectors such as e-commerce, data analytics and bio- and nano-technology. Subsequently, Sebi came up with recommendations to make the platform more accessible via a discussion paper on July 29, 2016.

MCA eases process for incorporation of LLPs; specifies new forms ‘RUN-LLP’ and FiLLiP
Ministry of Corporate Affairs (MCA) has notified amendment to the Limited Liability Partnership Rules, 2009 wherein process of incorporation of LLPs and reservation of their name have been amended in order to ease of doing business. Under revised norms, a new web based form ‘RUN-LLP’ has been introduced through which names of a LLP can be reserved without digital signature and Designated Partner Identification Number (DPIN). This form is very much similar to RUN web service reservation of name in case of companies. In this form, only two name can be proposed at single point of time and one resubmission is also allowed for reservation of name. In total, 4 names can be proposed.

Now, Shareholders are free to decide managerial remuneration – A big relief to companies
The Ministry of Corporate Affairs has done away with the mandatory approval from the Central Govt. for payment of managerial remuneration to top executives which means they can receive salary in excess of 11 per cent of net profit of a company. Now, the decision for payment of excess salary to top executives will be approved by the shareholders through special resolution.

RBI Eases Norms For Overseas Fundraising
The Reserve Bank eased norms for companies in the manufacturing sector to raise overseas funds and allowed Indian banks to market masala bonds in-line with the government’s measures to prop up the rupee.

Following a review of the economy by Prime Minister Narendra Modi last week, the government announced an array of measures to check the decline of rupee and curb the widening current account deficit. Liberalisation of the external commercial borrowing norms was among other measures announced by the government.

“It has been decided, in consultation with the government, to liberalise some aspects of the ECB policy including policy on rupee denominated bonds (Masala Bonds)…,” RBI said in a notification. As per the revised policy, eligible ECB borrowers in the manufacturing sector, will be allowed to raise up to $50 million or its equivalent with a minimum average maturity period of 1 year. Earlier the average minimum maturity period was three years.

Sebi to Review Proposed New Norms for FPI Investments
The Securities and Exchange Board of India (Sebi) said it would review the norms on foreign portfolio investors and take a holistic view.

“The working group has heard various stakeholders, has held consultations and is in the process of giving its recommendations. Ministry of Finance, Government of India has also been consulted on various issues. Based on these inputs, Sebi would review the matter and shortly take a holistic view,” Sebi said in a statement which was posted on its website.

The regulator has formed a committee to review foreign portfolio investors norms under the chairmanship of HR Khan, former deputy governor of Reserve Bank of India.

Sebi likely to approve commodity trading by foreign entities soon
With an aim to deepen the commodity derivatives market, regulator Sebi’s board is likely to approve a proposal to allow trading in this segment by foreign entities with exposure to the Indian physical commodity market.

Such foreign entities may be allowed to hedge their exposures with derivatives trading in all commodities traded on Indian exchanges, barring the sensitive commodities.

Chartered accountant in India

´PoeM´ firms to be taxed at 40%

Foreign companies whose place of effective control are in India will have to shell out 40 per cent corporation tax against 30 per cent levied on domestic firms.
The Central Board of Direct Taxes has come out with clarifications for place of effective management (PoeM) through a notification for these companies.
Through PoeM, the government taxes companies located outside the country but controlled from India.
It applies to companies having annual turnover of more than Rs. 500 million.

Soon, govt to carry out KYC of company directors
Directors at companies will soon be required to share their personal mobile numbers and e-mail ids with the government as part of verifying their credentials, amid continuing efforts to weed out bogus directorships.
In a significant move, the corporate affairs ministry has decided to carry out KYC (Know Your Customer) process for all directors, including those who have been disqualified.
A new electronic form is set to be introduced specifically for the directors through which all required details have to be submitted to the ministry, according to a communication.
The e-form — DIR-3 KYC — would be “notified and deployed shortly” as part of updating the ministry’s registry.
After the deadline, the MCA 21 system would mark all approved DINs — allotted on or before March 31 this year — against which DIR-3 KYC form has not been filed as ‘de-activated’.

AAR Ruling a Tax Twist for Foreign Hotels
A significant judgement by the Authority of Advance Rulings (AAR) may have an impact on taxes to be paid by overseas hotel companies. AAR has held that Accor-owned FRHI Hotels & Resorts property Swissotel Kolkata will constitute a fixed place permanent establishment for FRHI and that its income from operations would be taxable as business profits in India. AAR said this is due to the degree of ‘control’ exercised by the foreign company over the Indian firm. FRHI asked AAR if payments received by it from the Indian hotel owner for provision of global reservation services would be taxable in India as ‘fees for technical services’ or ‘royalty,’ under provisions of the Income Tax Act, 1961 read with Article 12 of the India-Luxembourg double taxation avoidance agreement . FRHI ought a ruling only on the limited question of “taxability of fees for providing global reservation services.”

CBDT proposes clear-cut timelines under transfer pricing
The income-tax (I-T) department has proposed clear-cut timelines by which excess amount assessed by transfer pricing officials (TPOs) over what was declared by associated enterprises of multinational corporations (MNCs) has to be brought in India. These timelines relate to advance pricing agreements (APAs) and mutual agreement procedures (MAPs).
In the Union Budget 2016-17, the government has come out with a concept of secondary adjustments. This basically means that if there is primary adjustment either made by the TPO or suo motu by the companies, which differs from what was declared by companies earlier, the excess amount over Rs 10 million has to be brought back to India within a stipulated time.
Otherwise, there would be secondary adjustment, which means this excess amount will be deemed as loan by Indian entity to the associated enterprise and a notional interest would be levied on it.
Now, the Central Board of Direct Taxes had earlier said that the excess amount has to be returned within 90 days of filing of returns. But, then the question arose over what will happen in case of APAs and MAPs.
Now, the department, through a draft notification, suggested that the amount should be returned within 90 days of signing of APAs and MAPs.

India Notifies Rules for I-T Computation for Foreign Firms
The government has notified rules for computation of income tax for foreign companies if they have place of effective management in the country. According to tax experts, it brings clarity on various aspects of the new place of effective management (POEM) regime.
Central Board of Direct Taxes (CBDT) has notified a mechanism for calculation of written-down value, and computation of brought-forward loss and unabsorbed depreciation.
It has said a company would continue to be treated as a foreign company even after it becomes resident in India.
The notification has provided clarity to the foreign companies which shall be considered as a resident in India owing to its POEM being in India. It provides guidance in case any conflict arises in the application of provisions of the Act to such foreign company qualifying as a resident company vis-à-vis a domestic resident company.

Govt. defers GST provisions on TDS or TCS till September 30, 2018
The Govt. has deferred the provisions of tax deduction at source (TDS) and collection of tax at source (TCS) under sections 51 and 52 of the Central GST Act, 2017 respectively till September 30, 2018.

Aviation ministry may want inclusion of ATF under GST

The civil aviation ministry is likely to approach the Goods and Services Tax(GST) Council soon for bringing aviation turbine fuel(ATF) under the tax regime.
Thursday´s meeting in the Capital was attended by AirIndia Chairman and Managing Director(CMD) Pradeep Singh Kharola, Pawan Hans CMD BP Sharma, the chief executive officer of a private airline, and the chief financial officers of other carriers.”We have given our suggestion to the ministry and Minister of State for Civil Aviation Jayant Sinha is likely to meet the GST Council soon to present our case,” a senior airline official said.
Currently, jet fuel is not under the GST ambit and the levy on it varies from state to state.
New system for monitoring of foreign investment limit in listed Companies to be operational on June 01, 2018
SEBI had introduced a new system for Monitoring of Foreign Investment limits in listed Indian companies and prescribed guidelines w.r.t the necessary infrastructure, data to be provided by listed Indian companies and other related matters. In this regard, it has been decided to extend the deadlines for Companies to provide necessary data to the depositories to May 25, 2018 and the new system for monitoring foreign investment limit in listed companies shall be made operational on June 01, 2018.
IBC Ordinance may Restrict Relief Proposed for MSMEs
The government has further revised the ordinance it proposes to move to make changes to the Insolvency and Bankruptcy Code (IBC). The updated note that will be sent to cabinet for approval is likely to restrict the wide exemption proposed earlier for micro, small and medium enterprises (MSMEs) from the provisions of Section 29A that disqualifies certain persons from bidding for an insolvent company. The revised cabinet note will also include a provision to allow participation by promoters released from imprisonment six years before the date of submission of a resolution plan, a senior official told ET. Many of the changes to the IBC will be made through the rules and regulations.
Merchant Exporters May Receive Govt Incentives
Slow growth in India’s exports has prompted the government to promote merchant exporters, who contribute almost a third of India’s exports in value terms but can’t avail of some incentives meant for manufacturer exporters.
Merchant exporters do not own manufacturing facilities but buy goods from manufacturers here and sell to overseas customers. They have the flexibility to procure goods from many sellers and sell them after negotiating the best prices to foreign buyers.
They are usually able to negotiate prices with buyers, sellers and shipping lines which are better than regular exporters.
The department of commerce is mulling ways to reduce the cost of credit for them.
“It is crucial to promote merchant exporters and make use of their marketing and negotiating skills with global partners,” said an official in the know of the development.
Legal Shield in the Works for Foreign Investments
India is working on a framework that will provide legal backing for a stable and predictable foreign investment regime in the country as it looks to attract more capital to help create jobs and accelerate economic growth.
The law that is in the works in the finance ministry is aimed at promoting and protecting foreign investments. It will spell out the rights and obligations of foreign investors and remove the grey areas that exist in the current system.
While Foreign Exchange Management Act (FEMA) deals with cross-border capital controls, a legal framework to guide foreign investment is still not in place. Bilateral Investment Promotion Agreements (BIPAs) have provisions but do not enjoy the force of law.
Hotel, restaurant services provided to SEZ units taxable
Hotel or restaurant services provided to special economic zone (SEZ) developers or units will not be treated as ´zerorated´ supplies and will be taxable under the goods and services tax, said the Authority for Advance Ruling (AAR). In an application before the Karnataka Bench of the AAR, the applicant had sought to clarify whether hotel accommodation and restaurant services provided to employees and guests of SEZ units be treated as supply of goods and services.

If you have any Query Visit : www.neerajbhagat.com