August 01, 2017 –August31, 2017

Issue No. – 008/ 2017

March 01, 2018 – March 31, 2018

Issue No. – 015/ 2018

FROM THE CHIEF EDITOR’S PEN

At the outset, through this column, I want to take a moment and thank you all for appreciating and encouraging WINS. Inthis edition of our e-newsletter “WINS” (acronym for Whitespan Information and News Services) we have covered therecent updates from RBI, SEBI, MCA, CBDT, CBEC and various other miscellaneous laws. We have also brought for you anarticle on Money Laundring. Hope we not only help you keep updated but also save your time by bringing a brief summaryof all the updates through our section on Editor’s Quick Take.

Our Editorial Board comprises the following professionals:

1. Mr. Vinay Shukla - Mr. Vinay Shukla, a Fellow Member of The Institute of Company Secretaries of India (ICSI), agraduate in Law, Commerce and Management is Co-founder of WsA having more than twenty five years’ experience inwide spectrum of corporate functions.

2. Ms. Jaya Yadav - Ms. Jaya Yadav, a practicing company secretary based at Gurgaon is an associate member ofThe Institute of Company Secretaries of India (ICSI) and a graduate in law and Commerce from Delhi University.

3. Mr. Himanshu Gupta - Mr. Himanshu Gupta is a General Counsel, an associate member of The Institute of CompanySecretaries of India (ICSI) and a graduate in law and Commerce.

4. Ms. Trishna Choudhary - Ms. Trishna Choudhary is an associate member of The Institute of Company Secretaries ofIndia (ICSI) and a graduate in commerce from Delhi University.

5. Ms. Megha Gupta - Ms. Megha Gupta is a graduate from Delhi University and is currently pursuing law from Symbiosis,Pune.

6. Ms. Ankita Pandey – Ms. Ankita Pandey is a commerce graduate from Kanpur University and an associate memberof The Institute of Company Secretaries of India (ICSI).

7. Ms. Divya Shukla- Ms. Divya Shukla is presently pursuing law from Christ University, Banglore.8. Ms. Prachika Agarwal -Ms. Prachika Agarwal is an associate member of Institute of Company Secretaries of India (ICSI)

and a graduate in law and Commerce from Agra University.

In this issue we have covered the following:

Corporate Updates from MCA, RBI, SEBI, CBDT, CBEC and other miscellaneous laws Case Laws on IBCAn article on Money Laundring

Compliance checklist for the month of April 2018

We hope all these would be of interest to you.

We invite articles on topics of professional interest. Please do ensure that the article is original, written in good style and adds value for the reader.

Your candid feedbacks are valuable: appreciation will encourage us; criticism will help us improve! Feedbacks can be sent at the following email id:

vinay@whitespan.org

With warm regardsWINS (Whitespan News and Information Services)March 31, 2018

INDEX

S.No Section Page No.

1 Ministry of Corporate Affairs (MCA) 5-10

2 Securities Exchange Board of India (SEBI) 11-22

3 Reserve Bank of India (RBI) 22-30

4 Central Board of Direct Taxes (CBDT) 31-33

5 Central Board of Excise and Customs (CBEC) 34-47

6 Miscellaneous Laws 48-53

7 Case Laws on IBC 54-60

8 An article on Money Laundering 61-68

9 Compliance Checklist 69-77

1. THE COMPANIES (FILING OF DOCUMENTS AND FORMS IN EXTENSIBLE BUSINESSREPORTING LANGUAGE) AMENDMENT RULES, 2018Date of notification: March 08, 2018 Effective Date: Date of publication in the official gazette Above notification is available at the following link:http://www.egazette.nic.in/WriteReadData/2018/183599.pdf

Editor’s Quick Take:MCA vide its notification dated March 08, 2018 has notified the Companies (Filing of Documentsand Forms in Extensible Business Reporting Language) Amendment Rules, 2018 by inserting thefollowing to rule 3 of the Companies (Filing of Documents and Forms in Extensible BusinessReporting Language) Rules, 2015 on filling of financial statement with registrar:

The companies which have filed their financial statements in XBRL form shall continue to do so,even if the Company has moved out of any of the mandatory condition for XBRL filings. Further, thecompanies which have filed their financial statements under the erstwhile rules, namely theCompanies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules,2011, shall continue to file their financial statements and other documents as prescribed in sub-rule (1) of rule 3 though they do not fall under the class of companies specified therein.

2. THE COMPANIES INCORPORATION (SECOND) AMENDMENT RULES, 2018 Date of Notification: March 23, 2018Effective Date: Date of publication in the official gazette Above notification is available at the following link:

http://www.mca.gov.in/Ministry/pdf/CompanyRule2303_23032018.pdf

Editor’s Quick Take:MCA vide its notification dated March 23, 2018 has notified the CompaniesIncorporation (Second) Amendment Rules, 2018. From now on an application forreservation of name shall be made through the web service by using form RUN(Reserve Unique Name) along with fee as provided in the Companies (Registrationoffices and fees) Rules, 2014, which may either be approved or rejected, as thecase may be, by the Registrar, Central Registration Centre after allowing re-submission of such application within fifteen days for rectification of the defects, ifany. Further, in addition to one resubmission, two names can be applied at a timeunder RUN.

3. THE COMPANIES (INDIAN ACCOUNTING STANDARDS) AMENDMENT RULES, 2018Date of Notification: March 28, 2018Effective Date: April 01, 2018 Above notification is available at the following link:

http://www.mca.gov.in/Ministry/pdf/INDAsEngRule2018_29032018.pdf

Editor’s Quick Take:MCA vide its notification dated March 28, 2018 has notified the Companies (IndianAccounting Standards) Amendment Rules, 2018 by amending the Companies (IndianAccounting Standards) Rules, 2015. The amendment has been carried out to providemore clarity with respect to its provisions and to remove the difficulties, whereveroccurring while complying in the Companies (Indian Accounting Standards) Rules, 2015.Kindly refer the link above for complete Companies (Indian Accounting Standards) Rules,2015

4. CONDONATION OF DELAY SCHEME 2018Date of Notification: March 28, 2018Effective Date: March 28, 2018 Above notification is available at the following link:http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo02of2018_29032018.pdf

Editor’s Quick Take:

MCA vide its notification dated March 28, 2018 has extended the condonation of delayscheme, 2018 upto April 30, 2018. The said scheme was earlier valid till March 31,2018.

Condonation of Delay Scheme, 2018 is available at the following link:http://www.mca.gov.in/Ministry/pdf/Generalcircular16_29122017.pdf

5. RELAXATION OF ADDITIONAL FEE AND EXTENTION OF LAST DATE OF FILLING OF AOC 4 XBRL E-FORM USING IND AS UNDER THE COMPANIES ACT, 2013 Date of Notification: March 28, 2018Effective Date: March 28, 2018 Above notification is available at the following link:http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo01of2018_29032018.pdf

Editor’s Quick Take:

MCA vide its notification dated March 28, 2018 has extended the last date for filling ofAOC 4 XBRL for all eligible companies required to prepare or voulantarily prepare theirfinancial statements in accordance with the Companies (India Accounting Standards)Rules, 2015 for the FY 2016-17 without any additional fee till 30th April, 2018.

1. SEPARATE LIMIT OF INTEREST RATE FUTURES (IRFS) FOR FOREIGN PORTFOLIOINVESTORS (FPIS)Date of Circular: March 08, 2018Effective Date: March 08, 2018 Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/mar-2018/separate-limit-of-interest-rate-futures-irfs-for-foreign-portfolio-investors-fpis-_38127.html

Editor’s Quick Take:

SEBI vide its circular dated March 08, 2018 has decided to allocate a separate limit of INR5,000 crore to FPIs for taking long position in IRFs. This limit will be calculated as follows:

a. For each interest rate futures instrument, position of FPIs with a net long position willbe aggregated. FPIs with a net short position in the instrument will not be reckoned.

b. No FPI can acquire net long position in excess of INR 1,800 crore at any point of time.

The limits prescribed for investment by FPIs in Government Securities (currently INR301,500 crore) shall be exclusively available for investment in Government Securities.

2. CLARIFICATIONS IN RESPECT OF INVESTMENT BY CERTAIN CATEGORY II FPISDate of Circular: March 13, 2018Effective Date: March 13, 2018 Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/mar-2018/clarifications-in-respect-of-investment-by-certain-category-ii-fpis_38198.html

Editor’s Quick Take:

SEBI vide its circular dated March 13, 2018 with reference to its circular on Easing of accessnorms for investment by FPIs (SEBI circular No. CIR/IMD/FPIC/ 26 /2018 dated February15, 2018 has clarified that

The collective investment vehicle of private banks/ merchant banks investing on behalf ofclients need to ensure the following:-

a) The client/ investor should have fulfilled know your client norms. The beneficial owners(BO) of client/ investor of bank should be identified in accordance with Rule 9 ofPrevention of Money Laundering (Maintenance of Records) Rules, 2005.

(b) The client/ investor or their BO should not be Resident Indian/ NRI/ Overseas Citizen of India.

c) The client/ investor is not resident in a country identified in the public statement of FinancialAction Task Force as:-

i. a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing ofTerrorism deficiencies to which counter measures apply; or

ii. a jurisdiction that has not made sufficient progress in addressing the deficiencies or has notcommitted to an action plan developed with the Financial Action Task Force to address thedeficiencies;

d) The client/ investor should not have opaque structure(s), as defined under Explanation 1 ofRegulation 32(1)(f) of SEBI (Foreign Portfolio Investors) Regulations, 2014 or Bearer sharestructure.

e) The collective investment vehicle of the Bank (other than for ODIs) should be broad based(more than 20 investors and no investorhaving more than 49% stake) and there should be common portfolio for all clients/ investors.

f) The conditions already specified at point (g) of SEBI circular dated February 15, 2018 shallcontinue to be applicable.

3. REVISION OF LIMITS RELATING TO REQUIREMENT OF UNDERLYING EXPOSURE FORCURRENCY DERIVATIVES CONTRACTSDate of Circular: March 15, 2018Effective Date: March 15, 2018 Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/mar-2018/revision-of-limits-relating-to-requirement-of-underlying-exposure-for-currency-derivatives-contracts_38242.html

Editor’s Quick Take:

SEBI vide its circular dated March 15, 2018 has with respect to the limits specified for theUSD-INR, EUR-INR, GBPINR and JPY-INR currency derivatives contracts beyond which marketparticipants are required to establish proof of underlying exposure notified that

(a) Domestic clients / Foreign Portfolio Investors (FPIs) may take long or short positionswithout having to establish existence of underlying exposure, upto a single limit of USD100 million equivalent, across all currency pairs involving INR, put together, andcombined across all the stock exchanges.

(b) FPIs shall ensure that their short positions at all stock exchanges across all contracts inFCY-INR pairs do not exceed USD 100 million.

(c) In the event a FPI breaches the short position limit, stock exchanges shall restrict the FPIfrom increasing its existing short positions or creating new short positions in the currencypair till such time FPI complies with the said requirement.

(d) To take long positions in excess of USD 100 million in all contracts in FCY-INR pairs, FPIsshall be required to have an underlying exposure in Indian debt or equity securities, includingunits of equity/debt mutual funds. (e) Domestic clients may take positions in excess of USD100 million in in all contracts in FCY-INR pairs, subject to the conditions specified in the RBIA.P. (DIR Series) Circular no. 147 dated June 20, 2014 and RBI A.P. (DIR Series) Circular no. 90dated March 31, 2015.

4. CLARIFICATION TO CIRCULAR PERTAINING TO INVESTOR PROTECTION FUND (IPF)AND INVESTOR SERVICE FUND (ISF)Date of Circular: March 14, 2018Effective Date: March 14, 2018 Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/mar-2018/clarification-to-circular-pertaining-to-investor-protection-fund-ipf-and-investor-service-fund-isf-_38208.html

Editor’s Quick Take:

SEBI vide its circular dated March 14, 2018 with reference to its guidelines on broad areas of Investor Protection Fund and Investor Service Fund has clarified that:

I. The unutilized IPF Interest Income accruing during a specific financial year can be carriedforward to the next financial year to enable effective utilization of such money by theexchanges during such extended period.

II. The NCDEs have been granted 3 years period starting April 1st, 2018 to permit utilizinginterest on IPF for activities of ISF also.

III. NCDEs are now permitted to utilize IPF interest income for undertaking researchactivities related to commodities market, provided every such research activity / projectcan be undertaken only after obtaining prior written approval of the trustees of the IPFTrust, who would inter alia, record the reasons, relevance and stated objectives of theresearch project while according approval to such activity/ project. Further, the Board ofthe exchange may be apprised of the research programs / activities being undertaken atleast once in every quarter or half year of a given financial year. There will be an overallcap on the total amount, not more than 10% of the interest amount of IPF which can bespent on Research activities related to commodities market. IPF shall frame a policytowards identifying / recognising public and private academic institutions, professionalbodies, trade (physical market) associations and industry bodies / chambers through /with whom such Research activities shall be undertaken / organised / sponsored.

5. SPREAD MARGIN BENEFIT IN COMMODITY FUTURES CONTRACTSDate of Circular: March 20, 2018 Effective Date: July 01, 2018 Above circular is available at the following link:

https://www.sebi.gov.in/legal/circulars/mar-2018/spread-margin-benefit-in-commodity-futures-contracts_38322.html

Editor’s Quick Take:SEBI vide its circular dated March 20, 2018 has decided that exchanges may provide spreadbenefit in initial margin across futures contracts in a commodity complex provided thefollowing conditions are met –• Minimum coefficient of correlation (r) between futures prices of the two commodities is0.90.• Back testing for adequacy of spread margin to cover MTM has been carried out for aminimum period of one year (back testing for at least 250 days wherein daily settlementprice of futures used for back testing have been determined from traded futures prices).• Initial margin after spread benefit has been able to cover MTM on at least 99% of the daysas per back testing.Maximum benefit in initial margin on spread positions is restricted to 50%.To be eligible for initial margin benefit, each individual contract in the spread shall be fromamongst the first three expiring contracts in the two commodities only.

6. CLARIFICATION TO CIRCULAR PERTAINING TO INVESTOR PROTECTION FUND (IPF)AND INVESTOR SERVICE FUND (ISF)Date of Circular: March 14, 2018Effective Date: March 14, 2018 Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/mar-2018/clarification-to-circular-pertaining-to-investor-protection-fund-ipf-and-investor-service-fund-isf-_38208.html

Editor’s Quick Take:

SEBI vide its circular dated March 14, 2018 with reference to its guidelines on broad areas of Investor Protection Fund and Investor Service Fund has clarified that:

I. The unutilized IPF Interest Income accruing during a specific financial year can be carriedforward to the next financial year to enable effective utilization of such money by theexchanges during such extended period.

II. The NCDEs have been granted 3 years period starting April 1st, 2018 to permit utilizinginterest on IPF for activities of ISF also.

7. RISK MANAGEMENT NORMS FOR COMMODITY DERIVATIVESDate of Circular: March 21, 2018Effective Date: March 21, 2018 Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/mar-2018/clarification-to-circular-pertaining-to-investor-protection-fund-ipf-and-investor-service-fund-isf-_38208.html

Editor’s Quick Take:

SEBI vide its circular dated March 21, 2018 has decided to align norms related to BMC and liquidnet-worth for members of clearing corporations in commodity derivatives with those applicable forclearing members in equity and currency derivatives. Thus, members of Clearing Corporations incommodity derivatives segment shall maintain a minimum Liquid Net-worth of at least INR 50Lakhs at all points of time and shall not have any Base Minimum Capital requirement.

Trading/Clearing members of commodity derivatives exchanges, who have deposited their ownFDRs or FDRs of associate banks, shall replace such collateral with other eligible collateral as perextant norms, within a period of three months from the date of issuance of this circular.

8 . DUE DILIGENCE AND REPORTING REQUIREMENTS UNDER FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) AND COMMON REPORTING STANDARDS (CRS)Date of Circular: March 21, 2018Effective Date: March 21, 2018 Above circular is available at the following link:https://www.sebi.gov.in/legal/circulars/mar-2018/due-diligence-and-reporting-requirements-under-foreign-account-tax-compliance-act-fatca-and-common-reporting-standards-crs-_38339.html

Editor’s Quick Take:SEBI vide its circular dated March 21, 2018 has issued a circular wrt due diligence andreporting requirements under foreign account tax compliance act (fatca) and commonreporting standards (crs the reporting financial institution (rfi). The RFI’s are advised to takenecessary steps to ensure compliance with requirements specified in the aforesaid rules forcarrying out the necessary due-diligence and reporting for Foreign Portfolio Investors (FPIs).Further, RFI are required to obtain valid self-certifications/FATCA and CRS declaration formswith documentary evidence as part of the account opening documentation in relationto FATCA / CRS as specified in Rule 114H. The Custodian are required to carry out the duediligence on the accounts held by Global Custodian (GC) end clients. Further, RFIs arerequired to certify to SEBI on annual basis regarding compliance with the provisions of Rules114F to 114H of income-tax rules relating to FATCA / CRS. This certificate would be a part ofthe audit report on internal controls submitted to SEBI annually.

1. SEPARATE LIMIT OF INTEREST RATE FUTURES (IRFS) FOR FOREIGN PORTFOLIOINVESTORS (FPIS)Date of Notification: March 01, 2018Effective Date: March 01, 2018 Above Notification is available at the following link:

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11225&Mode=0

Editor’s Quick Take:

RBI vide its notification dated March 01, 2018 has prescribed separate limit ofInterest Rate Futures (IRFs) for Foreign Portfolio Investors (FPIs). Currently, the FPIlimit for Government Securities (G-secs) is fungible between investments in G-secsand investment in IRF. FPI long positions in IRF are not allowed on G-sec limitutilisation reaching 90%. To facilitate further market development and to ensure thataccess of FPIs to IRFs remains uninterrupted, it has been decided to allocate FPIs aseparate limit of ₹ 5,000 crore for long position in IRFs.

2. HEDGING OF COMMODITY PRICE RISK AND FREIGHT RISK IN OVERSEAS MARKETS(RESERVE BANK) DIRECTIONSDate of Notification: March 12, 2018Effective Date: April 01, 2018 Above Notification is available at the following link:

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11226&Mode=0

Editor’s Quick Take:RBI vide its notification dated March 12 , 2018 has notified the Hedging of Commodity Price Risk and FreightRisk in Overseas Markets (Reserve Bank) Directions, 2018. From now on Residents hedging their commodityprice risk and freight risk under a specific approval from RBI given under the approval route based on theprevious set of guidelines would be permitted to continue hedging under the said approval till June 30, 2018or the last date specified in the approval, whichever is earlier.RBI vide above notification has also withdrawn relevant instructions on the subject contained in thefollowing circulars w.e.f. April 1, 2018:A. P. (DIR Series) Circular No. 68 dated January 17, 2012 on “Risk Management and Inter-Bank Dealings -Commodity Hedging”Section E and F of A. P. (DIR Series) circular no. 32 dated December 28, 2010 on “Comprehensive Guidelineson Foreign Exchange Derivatives and Overseas Hedging of Commodity Price and Freight Risks” and therelevant appendices.A. P. (DIR Series) Circular No.35 dated November 10, 2008 on “Remittance related to Commodity DerivativeContract Issuance of Standby Letter of Credit / Bank Guarantee”

3. DISCONTINUANCE OF LETTERS OF UNDERTAKING (LOUS) AND LETTERS OF COMFORT (LOCS) FOR TRADE CREDITSDate of circular: March 13, 2018Effective Date: March 13, 2018 Above Notification is available at the following link:

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11227&Mode=0Editor’s Quick Take:

RBI vide its notification dated March 13 , 2018 has decided to discontinue the practice ofissuance of LoUs/ LoCs for Trade Credits for imports into India by AD Category –I banks withimmediate effect. Letters of Credit and Bank Guarantees for Trade Credits for imports into Indiamay continue to be issued subject to compliance with the provisions contained in Departmentof Banking Regulation Master Circular No. DBR. No. Dir. BC.11/13.03.00/2015-16 dated July 1,2015 on “Guarantees and Co-acceptances”, as amended from time to time.

Master Circular - Guarantees and Co-acceptanceshttps://rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=9879

4. SUBMISSION OF RETURNS BY THE GOVERNMENT-OWNED NON-BANKING FINANCIAL COMPANIESDate of Notification: March 15, 2018Effective Date: March 15, 2018

Editor’s Quick Take:RBI vide its notification dated March 15 , 2018 has decided to apply the Master Direction –Non-Banking Financial Company Returns (Reserve Bank) Directions, 2016 dated September 29,2016 to all the Non-Banking Financial Companies, being Government Companies as defined inClause 45 of section 2 of the Companies Act, 2013, and registered with Reserve Bank of Indiaunder section 45IA of the Reserve Bank of India Act, 1934 (“such NBFCs”).Accordingly, all such NBFCs shall put in place a reporting system for filing periodic returns withthe Bank, to the extent applicable to them (as per their size and whether they accept publicdeposits). The returns should be compiled on the basis of the figures available in the books ofaccounts of such NBFCs and filed with the RBI on-line (using the COSMOS software package) byan authorised official of the NBFC, who shall be specifically authorised in this regard by theBoard of Directors of such NBFC concerned. The name of the authorised official may beinformed to us.

Above Notification is available at the following link:https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11229&Mode=0

The first set of returns shall be filed with effect from the:

(i) last Friday of December 2017 for the weekly return;(ii) quarter ended - December 31, 2017 for the quarterly returns;(iii) half-year ending March 31, 2018 for the half-yearly returns; and(iv) year ending March 31, 2018 for the annual returns. All weekly, quarterly returns upto

December 31, 2017 shall be submitted by April 15, 2018. Thereafter, these returns shallbe submitted within the timeline stipulated in the Master Direction on returns to besubmitted by NBFCs.

5. SUBMISSION OF RETURNS BY THE GOVERNMENT-OWNED NON-BANKING FINANCIAL COMPANIESDate of Notification: March 15, 2018Effective Date: March 15, 2018 Above Notification is available at the following link:https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11229&Mode=0

Editor’s Quick Take:

RBI vide its notification dated March 15 , 2018 has decided to apply the Master Direction –Non-Banking Financial Company Returns (Reserve Bank) Directions, 2016 dated September 29,2016 to all the Non-Banking Financial Companies, being Government Companies as defined inClause 45 of section 2 of the Companies Act, 2013, and registered with Reserve Bank of Indiaunder section 45IA of the Reserve Bank of India Act, 1934 (“such NBFCs”).

Accordingly, all such NBFCs shall put in place a reporting system for filing periodic returns withthe Bank, to the extent applicable to them (as per their size and whether they accept publicdeposits).

6. OMBUDSMAN SCHEME FOR NON-BANKING FINANCIAL COMPANIES, 2018 -APPOINTMENT OF THE NODAL OFFICER/PRINCIPAL NODAL OFFICERDate of Notification: February 23, 2018Effective Date: February 23, 2018 Above Notification is available at the following link:https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11221&Mode=0

Editor’s Quick Take:RBI vide its notification dated February 23, 2018 has introduced the Ombudsman Scheme for NBFC’s, 2018.The Non-Banking Financial Companies (NBFCs) that are covered under the Scheme (covered NBFCs) areadvised to ensure that a suitable mechanism exists for receiving and addressing complaints from theircustomers with specific emphasis on resolving such complaints expeditiously and in a fair manner.The NBFCs covered by the Scheme shall appoint Nodal Officers (NOs) at theirHead/Registered/Regional/Zonal Offices and inform all the Offices of the Ombudsman about the same.The NOs so appointed shall be responsible for representing the company and furnishing information to theOmbudsman in respect of complaints filed against the NBFC.Wherever more than one zone/region of a NBFC is falling within the jurisdiction of an Ombudsman, one ofthe NOs shall be designated as the ‘Principal Nodal Officer’ (PNO) for such zones or regions.The PNO/NO shall be responsible, inter alia, for representing the covered NBFC before the Ombudsman and

the Appellate Authority under the SchemeAll the above details along with a copy of the Scheme should also be prominently displayed on the web-siteof covered NBFCs.

1. INDIA AND HONG KONG SIGN DOUBLE TAXATION AVOIDANCE AGREEMENT(DTAA)Date of press release March 19, 2018 Above notification is available at the following link:https://www.google.com/url?hl=en&q=https://www.incometaxindia.gov.in/Lists/Press%2520Releases/Attachments/694/India-Hong-Kong-sign-Double-Taxation-Avoidance-Agreement-Press-Release-20-3-2018.pdf&source=gmail&ust=1522126793128000&usg=AFQjCNEfJa-I2WOOzKC1bK-ZcJvzNOlUWA

Editor’s Quick Take:

CBDT vide its press release dated March 19, 2018 has announced the signing of anagreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasionwith respect to taxes on income between Government of India and the Hong KongSpecial Administrative Region (HKSAR) of People’s Republic of China. The Agreementaims to stimulate flow of investment, technology and personnel from India to HKSARand vice versa, prevent double taxation and provide for exchange of informationbetween the two Contracting Parties. It will improve transparency in tax matters andwill help curb tax evasion and tax avoidance. The Agreement is on similar lines asentered into by India with other countries.

2. CBDT EXTENDS DATE FOR LINKING OF AADHAAR WITH PANDate of press release March 27, 2018 Above notification is available at the following link:https://www.incometaxindia.gov.in/Lists/Press%20Releases/Attachments/698/Press-Release-CBDT-extends-date%20for-Linking-of-Aadhaar-with-PAN-27-03-2018.pdf

Editor’s Quick Take:

CBDT vide its press release dated March 27, 2018 has extended the time for linkingPAN with Aadhaar till 30th June, 2018 thereby extending the earlier deadline of 31stMarch, 2018 by 3 months.

1. JOINT VENTURE ---TAXABLE SERVICES PROVIDED BY THE MEMBERS OF THE JOINT VENTURE (JV) TO THE JV AND VICE VERSA AND INTER SE BETWEEN THE MEMBERS OF THE JV-REGDate of Circular March 05, 2018 Effective Date March 05, 2018Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/gst/circularno-35-cgst.pdf

Editor’s Quick Take:

CBEC vide its circular dated March 05, 2018 has clarified that the law with regard tolevy of GST on service supplied by member of an unincorporated joint venture (JV)to the JV or to other members of the JV, or by JV to the members, essentiallyremains the same as it was under service tax law. Further, whether cash calls aretaxable or not will entirely depend on the facts and circumstances of each case.‘Cash calls’ are raised by an operating member of the joint venture on othermembers in proportion to their participating interests in the jointventure(unincorporated) to meet the expenditure on the operations to be carriedout as per the approved work programme and budget.

2. CENTRAL GOODS AND SERVICES TAX (SECOND AMENDMENT) RULES, 2018Date of Notification: March 07, 2018 Effective Date: Date of publication in the official gazette Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/gst/Notification-12-2018-central_tax-English.pdf

Editor’s Quick Take:

CBEC vide its notification dated March 07, 2018 has notified the Central Goods andServices Tax (Second Amendment) Rules, 2018 by amending following rules of theCentral Goods and Services Tax Rules, 2017:RULE 117 - the date of submission of GST FORM TRAN-2 (A Transition Form forRegistered persons under GST but unregistered under old regime, and a dealer ortrader who does not have documents evidencing payment of taxes) fromDecember 31, 2017 to March 31, 2018, or within such period as extended by theCommissioner, on the recommendations of the Council, for each of the six taxperiods during which the scheme is in operation indicating therein, the details ofsupplies of such goods effected during the tax period.

Rule 138 - Information to be furnished prior to commencement of movement of

goods and generation of e-way bill

Above rule has been modified to the extent that from now on every registered

person who causes movement of goods of consignment value exceeding fifty

thousand rupees shall, before commencement of such movement, furnish

information relating to the said goods as specified in Part A of FORM GST EWB-01,

electronically, on the portal.

An e-way bill or a consolidated e-way bill generated under this rule shall be valid for

the period as mentioned in column (3) of the Table below from the relevant date,

for the distance, within the country, the goods have to be transported, as

mentioned in column (2) of the said Table:-S.No. Distance Validity period

1 Upto 100 km One day in cases other than Over Dimensional Cargo

2 For every 100 km. or

part thereof thereafter

One additional day in cases other than Over Dimensional

Cargo

3 Upto 20 km One day in case of Over Dimensional Cargo 4.

4 For every 20 km. or part

thereof thereafter

One additional day in case of Over Dimensional Cargo

3. RECOMMENDATIONS REGARDING E-WAY BILL MADE DURING MEETING OF THE GST COUNCILDate of press release March 10, 2018Effective Date April 01, 2018 Above notification is available at the following link:http://pib.nic.in/newsite/PrintRelease.aspx?relid=177254

Editor’s Quick Take:The GST Council in its meeting held on March 19, 2018 has recommended the introduction of e-way bill forinter-State movement of goods across the country from 01st April 2018. For intra-State movement of goods,e-way bill system will be introduced w.e.f. a date to be announced in a phased manner but not later than01st June, 2018.Major improvements over the last set of rules, as approved by the Council now, are as follows:1. E-way bill is required to be generated only where the value of the consignment exceeds Rs. 50000/-. Forsmaller value consignments, no e-way bill is required.2. The provisions of sub-rule (7) of Rule 138 will be notified from a later date. Therefore, at present there isno requirement to generate e-way bill where an individual consignment value is less than Rs. 50,000/-, evenif the transporter is carrying goods of more than Rs. 50,000/- in a single conveyance.3. Value of exempted goods has been excluded from value of the consignment, for the purpose of e-way billgeneration.4. Public conveyance has also been included as a mode of transport and the responsibility of generating e-way bill in case of movement of goods by public transport would be that of the consignor or consignee.

5. Railways has been exempted from generation and carrying of e-way bill with the condition that withoutthe production of e-way bill, railways will not deliver the goods to the recipient. But railways are requiredto carry invoice or delivery challan etc.6. Time period for the recipient to communicate his acceptance or rejection of the consignment would bethe validity period of the concerned e-way bill or 72 hours,whichever is earlier.7. In case of movement of goods on account of job-work, the registered job worker can also generate e-way bill.8. Consignor can authorize the transporter, courier agency and e-commerce operator to fill PART-A of e-way bill on his behalf.9. Movement of goods from the place of consignor to the place of transporter up to a distance of 50 Km[increased from 10 km] does not require filling of PART-B of e-way bill.They have to generate PART-A of e-way bill.10. Extra validity period has been provided for Over Dimensional Cargo (ODC).11. If the goods cannot be transported within the validity period of the e-way bill, the transporter mayextend the validity period in case of transhipment or in case of circumstances of an exceptional nature.Validity of one day will expire at midnight of the day immediately following the date of generation of e-waybill.12. Once verified by any tax officer, the same conveyance will not be subject to a second check in any Stateor Union territory, unless and until, specific information for the same is received.13. In case of movement of goods by railways, airways and waterways, the e-way bill can be generatedeven after commencement of movement of goods.14. Movement of goods on account of Bill-To-Ship-To supply will be handled through the capturing of placeof despatch in PART-A of e-way bill.

4. PROCESSING OF REFUND APPLICATIONS FOR UIN ENTITIESDate of circular March 13, 2018

Above notification is available at the following link:

http://www.cbec.gov.in/resources//htdocs-cbec/gst/circularno-36-cgst.pdf

Editor’s Quick Take:

The GST Council, in its 23rd meeting has decided that the entities having UniqueIdentity Number (UIN) may be given centralized registration at the option of suchentities. Further, it was also decided that the Central Government will beresponsible for all administrative compliances in respect of such entities. Entitieshaving UINs are given a special status under the CGST Act as these are not coveredunder the definition of registered person. These entities have been granted UINs toenable them to claim refund of GST paid on inward supply of goods or services orboth received by them. Therefore, if any such entity is making supply of goods orservices or both then such entity will need to apply for GSTIN as per the provisionscontained in the CGST Act read with the rules made thereunder.

5. REFUND OF IGST ON EXPORT EGM ERROR RELATED CASES – REG. Date of circular March 16, 2018

Effective Date April 01, 2018 Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-2018/circ06-2018cs.pdf

Editor’s Quick Take:CBEC vide its circular dated March 16, 2018 has clarified the position wrt refund of IGST on export EGMError related cases. In order to address the problems related to IGST refund, CBEC has alreadyissued Circulars which highlighted the common errors and combination of error that hindered the sanctionand disbursal of refund of IGST paid against exports. In Order to overcome this issue, the Shipping lineshave been mandated to include the shipping bills originating from ICDs while filing the electronic EGMs atthe gateway ports.

In cases where the EGMs have not incorporated the shipping bills pertaining to ICDs, the Shippinglines/agents have been asked to file supplementary EGMs. In order to ensure a hassle free processing ofrefund claims, the following steps may be ensured by the jurisdictional officers in ICDs:(a) filing of local EGM i.e train or truck summary, as the case may be, immediately after cargo leaves theport,(b) liaising with jurisdictional officers at gateway port for incorporation of Shipping Bills pertaining to thecargo originating in ICDs, in the EGMs filed at gateway port by the Shipping lines/agents (c) rectification oferrors in local and gateway EGM, wherever necessary.

6. GST-APPLICABILITY OF E-WAY BILL RULESDate of circular March 23, 2018

Effective Date April 01, 2018 Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/gst/Notification-15-2018-central_tax-English.pdf

Editor’s Quick Take:

CBEC vide its notification dated March 23, 2018 has appointed 1st day of April, 2018, as thedate from which the provisions of sub-rules (ii) [other than clause (7)], (iii), (iv), (v), (vi) and(vii) of rule 2 of e-way bill rules shall come into force.

7. EXTENSION OF DATE FOR SUBMITTING THE STATEMENT IN FORM GST TRAN-2UNDER RULE 117(4)(B)(III) OF THE CENTRAL GOODS AND SERVICE TAX RULES, 2017Date of order March 28, 2018

Effective Date March 28, 2018

Editor’s Quick Take:

CBEC vide its order dated March 28, 2018 has extended the period for furnishing thestatement in FORM GST TRAN-2 under sub-clause (iii) of clause (b) of sub-rule (4) of rule 117of the Central Goods and Services Tax Rules, 2017 till the 30th day of June, 2018.

Above notification is available at the following link:https://gst.taxmann.com/topstories/222330000000014891/govt-extends-due-date-of-filing-gst-tran-2-till-june-30-2018.aspx?Id=222330000000014891&mode=home&Page=CIRNO

8. DUE DATE FOR FILLING FORM GSTR-1Date of order March 28, 2018 Effective Date March 28, 2018 Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/gst/Notification-17-2018-central_tax-English.pdf

Editor’s Quick Take:

CBEC vide its order dated March 28, 2018 has notified that the registered persons havingaggregate turnover of up to 1.5 crore rupees in the preceding financial year or the currentfinancial year, as the class of registered persons who shall follow the special procedure forfurnishing the details of outward supply of goods or services or both shall furnish the detailsof outward supply of goods or services or both in FORM GSTR-1 effected during the quarterApril to June, 2018 till the 31st day of July, 2018.

9. EXTENTION OF DUE DATE FOR FILLING FORM GSTR-6Date of order March 28, 2018 Effective Date March 28, 2018 Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/gst/Notification-19-2018-central_tax-English.pdf

Editor’s Quick Take:

CBEC vide its order dated March 28, 2018 has extended the time limit for furnishing thereturn by an Input Service Distributor in FORM GSTR-6 under sub-section (4) of section 39 ofthe Goods and Services Act, 2017 read with rule 65 of the Central Goods and Services TaxRules, 2017, for the months of July, 2017 to April, 2018, till the 31st day of May, 2018.

10. EXTENTION OF DUE DATE FOR FILLING FORM GSTR-1Date of order March 28, 2018 Effective Date March 28, 2018 Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/gst/Notification-18-2018-central_tax-English.pdf

Editor’s Quick Take:

CBEC vide its order dated March 28, 2018 has extended the time limit for furnishing thedetails of outward supplies in FORM GSTR-1 under sub-section (1) of section 37 of the Act forthe months as specified in column (2) of the Table, by such class of registered persons havingaggregate turnover of more than 1.5 crore rupees in the preceding financial year or thecurrent financial year, till the time period as specified below:

S.No. Month Last date for filing of return in FORM GSTR-1

1 April, 2018 31st May, 2018

2 May, 2018 10th June, 2018

3 June, 2018 10th July, 2018

11. EXTENTION OF DUE DATE TO FILE GST REFUND APPLICATION U/S 55 BY NOTIFIEDAGENCIESDate of order March 28, 2018Effective Date March 28, 2018 Above notification is available at the following link:http://www.cbec.gov.in/resources//htdocs-cbec/gst/Notification-20-2018-central_tax-English.pdf

Editor’s Quick Take:

CBEC vide its order dated March 28, 2018 has in view of its recent facility for filing the claimof refunds under section 55 of the GST Act, 2017 through a common portal notified specifiedpersons as the class of persons who shall make an application for refund of tax paid by it oninward supplies of goods or services or both, to the jurisdictional tax authority, in such formand manner as specified, before the expiry of eighteen months from the last date of thequarter in which such supply was received.

1. INSOLVENCY AND BANKRUPTCY BOARD OF INDIA SIGNS A MEMORANDUM OFUNDERSTANDING WITH THE RESERVE BANK OF INDIADate of press release March 12, 2018

Editor’s Quick Take:The Insolvency and Bankruptcy Board of India (IBBI) signed a Memorandum of Understanding(MoU) today with the Reserve Bank of India (RBI).

The MoU provides for:(a) sharing of information between the two parties, subject to the limitations imposed by the

applicable laws;(b) sharing of resources available with each other to the extent feasible and legally

permissible;(c) periodic meetings to discuss matters of mutual interest, including regulatory requirements

that impact each party's responsibilities, enforcement cases, research and data analysis,information technology and data sharing, or any other matter that the parties believewould be of interest to each other in fulfilling their respective statutory obligations;

Above press release is available at the following link:http://ibbi.gov.in/webadmin/pdf/whatsnew/2018/Mar/RBI-IBBI%20MoU%20Press%20Release_2018-03-12%2017:37:59.pdf

(d) cross-training of staff in order to enhance each party's understanding of the other's missionfor effective utilisation of collective resources;

(e) capacity building of insolvency professionals and financial creditors;

(f) joint efforts towards enhancing the level of awareness among financial creditors about theimportance and necessity of swift insolvency resolution process of various types of borrowersin distress under the provisions of the Code, etc.

2. DGFT - LAUNCH OF E-MPS- FACILITY TO MAKE ONLINE PAYMENT FORMISCELLANEOUS APPLICATIONSDate of Trade notice March 14, 2018 Effective Date of notification in the official gazette Above press release is available at the following link:

http://dgft.gov.in/Exim/2000/TN/TN17/Trade%20notice%2025.pdfEditor’s Quick Take:

DGFT vide its trade notice dated March 14, 2018 has launched e-MPS- facility tomake online payment for miscellaneous applications. Using this facility, the onlinepayment can now be made even for a manual application made to a DGFT RegionalOffice/ DGFT HQ. The proof of payment, along with the relevant application has tobe submitted to the concerned DGFT Regional Authority eRA)/ DGFT HQ. Onsubmission, the concerned DGFT Regional Office will authenticate the paymentfrom the system and update it as utilized. The DGFT Office will print the receipt,having unique DGFT reference number, of payment received and will link it with theparticular application submitted. The fee for the application will be treated as paidand application will be processed. Both, the online payment and manual modepayment will be allowed for one month from the issue of this trade notice.

3. NATIONAL COMPANY LAW TRIBUNALDate of order: March 27, 2018 Effective Date: April 02, 2018 Above press release is available at the following link:

https://nclt.gov.in/sites/default/files/All-PDF/constitutes%20of%20Benches%20at%20NCLT%2C%20New%20Delhi.pdf

Editor’s Quick Take:

NCLT vide its order dated March 27, 2018 has constituted benches at New Delhi forthe purpose of exercising and discharging the tribunal’s powers and functions.Accordingly NCLT, Divisional Bench (Court No. 3) at New Delhi shall now comprisesof Shri. R. Vardharajan, Member (Judicial) and Shri V. K. Subburaj, Member(Technical) and new Bench NCLT, Single Bench (Court No. 4) at New Delhi shall bepresided by Dr. Deepti Mukesh, Member (judicial). This shall come into forcefrom 2nd April, 2018 and there is no change in the constitution of other Benchescurrently in operation at New Delhi.

4. PAYMENT OF GRATUITY (AMENDMENT) ACT, 2018 BROUGHT IN FORCEDate of notification: March 29, 2018 Effective Date: March 29, 2018 Above press release is available at the following link:http://pib.nic.in/newsite/PrintRelease.aspx?relid=178218

Editor’s Quick Take:

Ministry of Labour & Employment vide its notification dated March 29, 2018 has notified thePayment of Gratuity (Amendment) Act, 2018. The Payment of Gratuity (Amendment) Bill, 2018was passed by Lok Sabha on 15th March, 2018 and by the Rajya Sabha on 22nd March, 2018,has been brought in force on 29th March, 2018. The upper ceiling on gratuity amount underthe Act has been revised to 20 Lakhs. This will ensure harmony amongst employees in theprivate sector and in Public Sector Undertakings/ Autonomous Organizations underGovernment who are not covered under CCS (Pension) Rules. These employees will be entitledto receive higher amount of gratuity at par with their counterparts in Government sector.

Case Laws on IBC

1. IN THE CASE OF MACQUARIE BANK LIMITED VS. SHILPI CABLE TECHNOLOGIESLIMITED

In this landmark judgment, Supreme Court brought clarity to two crucial issues pertaining to the Code.

The first question was whether, in relation to an operational debt, the provision contained in Section 9(3)(c) ofthe Code is mandatory. Section 9 (3) (c) requires that while initiating insolvency proceeding under the Code,operational creditor shall submit a certificate from a financial institution maintaining accounts of theoperational creditor confirming that there is no payment of the unpaid operational debt by the corporatedebtor.This above requirement has resulted into undue hardship while filing application against operational creditor

mainly due to the reason that financial institutions are often hesitant to issue such certificate. The requirementalso created an obstacle for foreign creditors to invoke the Code against operational creditors in India, asforeign creditors generally don’t have bank account in India and certificate from foreign bank does not satisfythe criteria under the Code.

Regarding this issue, the Supreme Court held that the requirement under Section 9 (3) (c) regarding thecertificate from the financial institution is not a condition precedent to trigger the insolvency process under theCode but can only be considered as a piece of evidence.

The Court went on to add that the important condition precedent to trigger the Code is occurrence of adefault, which can be proved by means of other documentary evidence also and not necessary only throughcertificate from financial institution. The Court also categorically stated that the Code allows foreignoperational creditor to invoke the Code despite the fact that such operational creditor may or may not have abank account in India.

The second issue under consideration was whether lawyer could issue demand notice under the Code onbehalf of operational creditor. The issue is significant due to the earlier decisions of lower adjudicatingauthorities that only a creditor himself or person holding position with the creditor can issue demand notice.Since lawyers often do not hold position with the creditor, this means that he could not issue demand notice.The Court analyzed the provisions of the Code and categorically concluded that not only the creditor and hisauthorized agent but lawyers are also entitled to issue demand notice under the Code on behalf of creditors.

2. IN THE CASE OF M/S. INNOVENTIVE INDUSTRIES LTD. V. ICICI BANK & ANR.

Supreme Court Observations-

Apex Court analyzed repugnancy between the Code, which is a Central law, and Maharashtra ReliefUndertakings Special Provisions Act 1958, a State legislation. After examining Article 254 of the Constitutionof India, which deals with repugnancy between Central and State law, the Supreme Court held that in theevent of any repugnancy between any State law and the Code, in respect of matters relating to bankruptcyand insolvency, the Code would prevail over such State laws. The Court made the following points:

Insolvency Code brings a paradigm shift in law including a need to remove the management of a corporatedebtor which defaults on its debts. Thus, entrenched managements are no longer allowed to continue incase of non-payment of debts. The concept of default under the Insolvency Code is very wide. It issimpliciter a non-payment of debt when the same becomes due and includes non-payment of even a partthereof. Even non-payment of a disputed financial debt when due would constitute a default under theCode. In other words, as long as the debt is due it does not matter if the same is disputed.

The Court noticed that the difference in the scheme of initiation of insolvency proceedings at the instanceof a financial creditor (under Section 7) and by an operational creditor (under Section 8) of the InsolvencyCode.

Under Section 7 the Court found that, in the case of a corporate debtor who commits a default of a financialdebt, the adjudicating authority has merely to see the records of the information utility or other evidenceproduced by the financial creditor to satisfy itself that a default has occurred. The scope of enquiry before theadjudicating authority is therefore limited to assessing the records provided by the financial creditor to satisfyitself that the default has occurred.It is of no matter that the debt is disputed so long as the debt is “due” i.e. payable unless interdicted by somelaw or has not yet become due in the sense that it is payable at some future date. It is only when this is provedto the satisfaction of the adjudicating authority that the adjudicating authority may reject an application andnot otherwise. The adjudicating authority may therefore only reject an application on a defence taken by thecorporate debtor that the debt was not due and not otherwise.

Whilst noticing the provisions of the Section 7 of the Insolvency Code, the Court found that “The speed, withinwhich the adjudicating authority is to ascertain the existence of a default from the records of the informationutility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14days of the receipt of the application.

It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred,that the corporate debtor is entitled to point out that a default has not occurred in the sense that the “debt”,which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact.The moment the adjudicating authority is satisfied that a default has occurred, the application must beadmitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7days of receipt of a notice from the adjudicating authority.”

After noticing the scheme of the Insolvency Code in detail, the Court found that the scheme of the InsolvencyCode, therefore, is to make an attempt, by divesting the erstwhile management of its powers and vesting it ina professional agency, to continue the business of the corporate body as a going concern until a resolutionplan is drawn up, in which event the management is handed over under the plan so that the corporate body isable to pay back its debts and get back on its feet. All this is to be done within a period of 6 months with amaximum extension of another 90 days or else the chopper comes down and the liquidation process begins.

On the question of whether both the NCLT and NCLAT had erred in refusing to go into the other contention ofInnoventive that it was because the creditors did not disburse the amounts under the MRA that Innoventivewas not able to pay its dues, the Court held that the NCLT and the NCLAT were right in not going into thiscontention for the very good reason, first that the period of 14 days within which the application is to bedecided was long over by the time the second application was made before the NCLT and second the secondapplication clearly appears to be an after-thought for the reason that the corporate debtor was fully aware ofthe fact that the MRA had failed and could easily have pointed out these facts in the first application itself.

The Court said that even otherwise, it was satisfied that the obligations of the corporate debtor under MRAwere unconditional and did not depend upon infusing of funds by the creditors into the appellant company.

On the aspect of whether the provisions of the MRU Act will prevail over the provisions of the InsolvencyCode, the Court held that MRU Act operates in the same field as the Insolvency Code and is repugnant toInsolvency Code and that the later non-obstante clause (Section 238) of the Parliamentary enactment(Insolvency Code) will also prevail over the limited non-obstante clause contained in Section 4 of theMaharashtra Act

3. SREE METALIKS LIMITED AND ANOTHER V. UOI AND ANR

Calcutta High Court observed that the requirement of NCLT and NCLAT to adhere tothe principles of natural justice be determined from Section 7(4) of the Code and Rule4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,2016. It held that, the NCLT is obliged to afford a reasonable opportunity to thefinancial debtor and it may do so prior to admitting the petition filed under Section 7of the Code.

MONEY LAUNDRING

Overview:Basic meaning of Money Laundering: The concealment of the origins of illegally obtainedmoney, typically by means of transfers involving foreign banks or legitimate businesses. Theoffence of 'Money Laundering' is defined under Section 3 of the PMLA, which, for ease ofunderstanding, can be deconstructed as : Whosoever :• directly or indirectly, • attempts to indulge, or• knowingly assists, or • knowingly is party, or• is actually involved in any process, or• activity connected, with the Proceeds of Crime, including its :• Concealment, • Possession, • Acquisition or use; and • Projecting or Claiming it as UntaintedProperty shall be guilty of offence of Money-Laundering. It is clear that the section is mostwidely worded and almost any kind of dealing with the proceeds/fruits of crime, is broughtwithin the purview of the section and made culpable

Statutory FrameworkGovernment has taken initiatives to enlarge the scope of this Act by having bilateral agreementswith other countries and curb the menace of money laundering.

:

Constitution of Statutory Authorities: Financial Intelligence Unit, India, in November, 2004,headed by Director in the rank of a Joint Secretary to the Government of India. In addition, theAdjudicating Authority in terms of section 6 of the Act and the Appellate Tribunal under section25 of the Act have also been constituted and have become functional.

International ConventionsUN Conventions that deals with Money Laundering:1. International Convention for the Suppression of the Financing of Terrorism (1999);2. UN Convention against Transnational Organized Crime (2000); and3. UN Convention against Corruption (2003)

Domestic LawsAllied Laws deals with Money Laundering:

1. Indian Penal Code,18602. prevention of Corruption Act,19883. Right to Information Act,20054. Central Vigilance Commission Act, 20035. Lokayukta Acts of States6. The Right to Information Act, 20057. Smugglers and Foreign Exchange Manipulators Forfeiture of Property Act, 1976

:

8. The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974(COFEPOSA)9. The Benami Transactions (Prohibition) Act, 1988 (Bill, 2011)10. The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988

Reasons of occurrence of Money Laundering

• Hiding wealth• Avoiding Prosecution• Evading Taxes• Increasing Profits Process of Money Laundering

First Stage Placement: Entrance of Cash in domestic banks through various monetaryinstruments and through small transactions.Second Stage Layering: The money is spread over various transactions and thus giving them alegitimate appearance.Final Stage Integration: The launderer makes it appear to have been legally earned andaccomplishes integration of the “cleaned” money into the economy. By this stage, it isexceedingly difficult to distinguish legal and illegal wealth

:

Indian Law on Money Laundering The Prevention of Money Laundering Act (PMLA), 2002

Enactment Date- January, 2003Enforcement Date- 1st July, 2005Objective of the Act To prevent and control money laundering; To provide for confiscation andseizure of property obtained from laundered money; and To deal with any other issueconnected with money-laundering in India.

Attachment of PropertySection 5 of the Prevention of Money Laundering Act (PMLA), 2002 deals with the Attachmentof Property. Director or Officers involved- Not below the rank of Dy. Director. This power is tobe exercised if the authority, as specified above, has a reason to believe (and such reasons haveto be recorded in writing to prevent arbitrariness), on the basis of material in their possession,that - Any person is in possession of any Proceeds of Crime; and such Proceeds of crime arelikely to be :• Concealed• Transferred, or• dealt with in any manner as may be deemed fit.

Authorities under the Act & their powers:

1. Director or Additional Director or Joint Director 2. Deputy Director3. Assistant Director4. Such other class of officers as may be appointed for the purposes of this Act

Obligation of Banking companies, financial institutions and intermediaries

Every banking company, financial institution and intermediary shall—(a) maintain a record of all transactions, the nature and value of which may be prescribed,

whether such transactions comprise of a single transaction or a series of transactionsintegrally connected to each other, and where such series of transactions take place withina month;

(b) furnish information of transactions referred to in clause (a) to the Director within such timeas may be prescribed;

(c) verify and maintain the records of the identity of all its clients, in such manner as may beprescribed.

• Time period for maintenance of records- 10 years:

Search & Seizure Search of PremisesSection 17 gives the powers for search & seizure to the investing agency. If investing agencyhas reason to believe (and such belief should be recorded in writing) the commission of offenceunder the PMLA and possession of proceeds of crime, it can enter and seize property/recordsetc. make an inventory of the same. The seizure memo is required to be signed by twoindependent witnesses. Search of Individual Section 18 gives the powers for search & seizureto the investing agency. Before the search of a person, as per his wish, the authority shall takethe said person before a Gazetted officer superior in rank to the authority or a the authority ora Magistrate within 24 hours excluding the time of journey.

The Appellate Tribunal established under section 25 of the Prevention of Money-LaunderingAct, 2002 shall be the Appellate Tribunal for the purposes of this Act.

Any person aggrieved by the order of the Adjudicating Authority can appeal to the AppellateTribunal within 45 days from the date of such order.

:

Composition- The Appellate Tribunal shall consist of a Chairperson and two other Members. Anyperson aggrieved by the order of the Appellate Tribunal can appeal to the High Court within 120days from the date of communication of the order. Offences & Punishment under the ActWhosoever directly or indirectly involves in the process of Money Laundering shall be guilty ofoffence of Money Laundering. Punishment- Not less than 3 years & which may extend to 7 yearsand also liable for fine which may extend to Rupees 5 Lacs.

Vaishali Singh Practicing Company Secretary, Varanasi,

B.Com and L.LB- Mahatama Gandhi Kashi Vidhyapith, Varanasi

S. No Activities Sections/Rules/ Clauses, etc.

Acts/Regulations etc.

Compliance Due Date

To whom to be submitted

Service Tax Related Compliances

1 Pay Service Tax in Challan GAR-7, collected for

the previous Month by persons other than

individuals proprietors and partnership firms.

*(in case of Payment through Internet banking)

Section 68 Read

with Rule 6

Finance Act,1994

Service Tax Rules

1994

05th&*06th

of Every Month

Service Tax

Authorities

Income Tax Related Compliances

2 Contractor’s Bill / Advertising / Professional

service Bill - TDS collected for the previous month

Section 194J

Section 194C

Section 194J

Income-tax Act,

1961

07th of Every

Month

Income Tax

Authorities

3 Monthly payment of TCS Section 206 Income-tax Act,

1961

07th of Every

Month

Income Tax

Authorities

4 TDS from Salaries for the previous month Section 192 Income-tax Act,

1961

07th of Every

Month

Income Tax

Authorities

5 Deposit TDS from salaries for the previous month

in Challan No.281

Section 192 Income-tax Act,

1961

07th of Every

Month

Income Tax

Authorities

6 Fourth installment of advance tax for the

assessment year 2018-19.

Section 211(1) Income-tax Act,

1961

15th March Income Tax

Authorities

7 Monthly payment of TDS for the Previous Month

on all types of payments

Section 200 Income-tax Act,

1961

30th of Every

Month

Income Tax

Authorities

9 Quarterly payment of TDS for payments with the

prior approval of the Joint Commissioner for the

Quarter ending March 31.

Section 192,

194A, 194D or

194H

Income-tax Act,

1961

30th April Income Tax

Authorities

RBI Related Compliances

10 Reporting of actual transactions of ECB in form

ECB-2 within 7 working days (March, 2018)

ECB Rules FEMA, 1999 08th April RBI through

Authorized

Dealer

11 Reporting of Special Mention Account status (SMA-

2 return)

NBS.

PPD.02/66.15.001

/2016-17 dated

September 29,

2016

Master Direction Every Friday RBI

12 Monthly statement of short term dynamic liquidity in

Form ALM-I

DNBS

(PD).CC.No.15

/02.01/2000-2001

dated June 27,

2001

Circular 10th of Every

Month

RBI

S. No Activities Sections/Rules/ Clauses, etc.

Acts/Regulations etc.

Compliance Due Date

To whom to be submitted

Economic, Industrial & Labour Law Related Compliance

13 Monthly payment of Provident Fund (PF) (Non

Corporate)

(a) Paragraph 38

of Employees

Provident Funds

Scheme, 1952

(a) Employees’

Provident Funds and

Misc. Provisions Act,

1952

(b) Exempted

Scheme

15th Of

Next month

Provident

Fund

Authorities

Trustees of

Provident

Fund

14 File monthly return for employees leaving / joining

during the previous month (Form No.5)

Paragraph 20(2)

read with

Paragraph 36(1)

& (2)

The Employees

Pension Scheme,

1995 (For exempted

establishments

under Employees

Provident Fund and

Misc. Provisions Act,

1952)

15th of

Next Month

Provident

Fund

Commissioner

S. No Activities Sections/Rules/ Clauses, etc.

Acts/Regulations etc.

Compliance Due Date

To whom to be submitted

15 File monthly return for employees leaving / joining

during the previous month (Form No.5)

Paragraph 20(2)

read with

Paragraph 36(1)

& (2)

The Employees

Pension

Scheme, 1995

(For exempted

establishments

under

Employees

Provident Fund

and Misc.

Provisions Act,

1952)

15th of Next

Month

Provident

Fund

Commissioner

16 i) File monthly Return of employees entitled

for membership of Insurance Fund (Form

No.2(IF))

ii) File monthly Return for members of

Insurance Fund leaving service during the

month of April (Form no. 3(IF))

iii) File monthly return of

members joining service during the month of

April (Form no.F4(PS)

Paragraph 10 The Employees

Deposit Linked

Insurance

Scheme, 1976

(For exempted

establishments

under

Employees

Provident Fund

and Misc.

Provisions Act,

1952)

15th of Next

Month

Provident

Fund

Commissioner

S. No Activities Sections/Rules/ Clauses, etc.

Acts/Regulations etc.

Compliance Due Date

To whom to be submitted

17 Payment of ESI contribution for the previous month Regulation 31 Employees’ State

Insurance Act,

1948 and

Employees State

Insurance (Gen.)

Regulations, 1950

21st of Next

Month

ESIC

Authorities

18 Monthly return of Provident Fund for the previous

month Provident funds

Paragraph 38 of

Employees’

Provident Act,

1952

Employees

Provident Funds

and Misc. Scheme,

1952

25th of Next

Month

Provident

Fund

Authorities

19. Monthly return of Provident Fund for the previous

month with respect to International Workers.

Paragraph 36 The Employees'

Provident Funds

Scheme, 1952

25th of Next

Month

Provident

Fund

Authorities

S. No Activities Form No. Acts/Regulations etc.

Compliance Due Date

To whom to be submitted

Good and Service Tax Related Compliances

20 Details of outward supplies of taxable goods and

/or services effected (for the month of November)

GSTR-1 Chapter IX of

CGST Act,2017

10th of Next

Month

Registered

Taxable

Supplier

21. Details of inward supplies of taxable goods and /or

services effected calming input tax credit (for the

month of August)

GSTR-2 Chapter IX of

CGST Act,2017

After the 10th

but before 15th

of Next Month

Registered

Taxable

Recipient

22. Monthly return on the basis of finalization of

details of outward suppliers and inward supplies

along with the payment of amount of tax. (for the

month of November)

GSTR-3 Chapter IX of

CGST Act,2017

20th of Next

Month

Registered

Taxable

Person

23 Quarterly return for Compounding Taxable

person

GSTR-4 Chapter IX of

CGST Act,2017

18th of Next

Succeeding

Quarter

Composition

Supplier

S. No Activities Form No. Acts/Regulations etc.

Compliance Due Date

To whom to be submitted

24. Return for Non- Resident foreign Taxable person GSTR-5 Chapter IX of

CGST Act,2017

20th of Next

Month or

within 7 days

after the last

day of validity

of registration

whichever is

earlier

Non- Resident

Taxable

Person

25. Return for Input Service distributor GSTR-6 Chapter IX of

CGST Act,2017

13th of Next

Month

Input service

distributor

26. Return for authorities deducting tax at source GSTR-7 Chapter IX of

CGST Act,2017

10th of Next

Month

27 Details of suppliers effected through e-commerce

operator and the amount of tax collected

GSTR-8 Chapter IX of

CGST Act,2017

10th of Next

Month

E-Commerce

operator/ Tax

Collector.

S. No Activities Form No. Acts/Regulations etc.

Compliance Due Date

To whom to be submitted

28 Final Return GSTR-10 Chapter IX of

CGST Act,2017

Within 3

months of date

of cancellation

or date

cancellation

order ,

whichever is

later.

Taxable

person whose

registration

has been

surrendered

or cancelled

29 Details of Inward supplies to be furnished by a

person having UIN

GSTR-11 Chapter IX of

CGST Act,2017

28th of the

month

following the

month for

which

statement is

filed.

Person having

UIN and

Calming

refund

For further information please contact:

vinay@whitespan.org

NCR OF DELHI MUMBAI LGF, 152P, Sector 38, 506, Arcadia, 195, Nariman Point, Near Medanta, the Medicity, Mumbai – 400 023 Gurgaon 122-002 Telephone – 0124-2204242, 63

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