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  • IDlPA~ ~F ~ene 1 I December 2016

    REAL ESTATE/INFRASTRUCTURE PROJECTS -COMPANIES ACT, 2013 PERSPECTIVE

    CS Atul Kumar Labh

    Companies Act, 2013 ("the Act") recognises theimportance of "Infrastructural Projects" or"Infrastructural Facilities". A separate Schedule(Schedule VI) as attached to the Act has beenspecifically dedicated to it, covering, inter alia, thefollowing aspects of the Corporate world:

    (A) Issue and redemption of Preference Shares:

    Section 55 of the Act, inter alia, provides, that aCompany limited by shares and if authorized by itsArticles may issue redeemable Preference Shareswhich are liable to be redeemed within a period notexceeding twenty (20) years from the date of theirissue.

    Provided that a Company may issue PreferenceShares for a period exceeding twenty years forinfrastructure projects, subject to the redemptionof such percentage of shares as may beprescribed on an annual basis at the option of suchpreferential shareholders.

    (8) Loan and Investment by Company:

    Section 186 of the Act, inter alia, providesconditions for making loan, investments and / orproviding security/guarantee, viz, quantum, rate ofinterest, etc. by the Companies.

    However, Section 186( 11) exempts almost all therelevant provisions of Section 186 for thecompanies engaged in the business of providinginfrastructural facilities.

    (C) Deposit:

    Rule 2(1 )(c)(xii)(c) of the Companies (Acceptanceof Deposits) Rules, 2014, inter alia, exempts anyamount received in the course of, or for thepurposes of, the business of the Company, asadvance, accounted for in any mannerwhatsoever, received in connection withconsideration for arrangement, provided that suchadvance is adjusted against the property inaccordance with the terms of agreement orarrangement.

    (D) Schedule VI:

    The term "infrastructural projects" or

    "infrastructural facilities" includes the followingprojects or activities:-

    (1) Transportation (including inter modaltransportation), includes the following:-

    (a) roads, national highways, state highways,major district roads, other district roads andvillage roads, including toll roads, bridges,highways, road transport providers and otherroad-related services;

    (b) rail system, rail transport providers, metro railroads and other railway related services;

    (c) ports (including minor ports and harbours),inland waterways, coastal shipping includingshipping lines and other port related services;

    (d) aviation, including airports, heliports, airlinesand other airport related services;

    (e) logistics services.

    (2) Agriculture, including the following,namely:-

    (a) infrastructure related to storage facilities;

    (b) construction relating to projects involvingagro-processing and supply of inputs toagriculture;

    (c) construction for preservation and storage ofprocessed agro-products, perishable goodssuch as fruits, vegetables and flowersincluding testing facilities for quality.

    (3) Water management, including the following,namely:-

    (a) water supply or distribution;

    (b) irrigation;

    (c) water treatment.

    (4) Telecommunication, including the following,namely:-

    (a) basic or cellular, including radio paging;

    (b) domestic satellite service (i.e., satellite ownedand operated by an Indian company forproviding telecommunication service);

    54 IDirect Taxes Professionals' Association - Journal www.dtpa.org

  • DTPA - J 12016-17 - Volume 1 1December 20161

    (c) network of trunking, broadband network andinternet services.

    (5) Industrial, commercial and socialdevelopment and maintenance, including thefollowing, namely:-

    (a) real estate development, including anindustrial park or special economic zone;

    (b) tourism, including hotels, convention centresand entertainment centres;

    (c) public markets and buildings, trade fair,convention, exhibition, cultural centres,sports and recreation infrastructure, publicgardens and parks;

    (d) construction of educational institutions andhospitals;

    (e) other urban development, including solidwaste management systems, sanitation andsewerage systems.

    (6) Power, including the following:-

    (a) generation of power through thermal, hydro,nuclear, fossil fuel, wind and other renewablesources;

    (b) transmission, distribution or trading of powerby laying a network of new transmission ordistribution lines.

    (7) Petroleum and natural gas, including thefollowing:-

    (a) exploration and production;

    www.dtpa.org Direct Taxes Professionals' Association - Journal 1 55

    (b) import terminals;

    (c) liquefaction and re-gasification;

    (d) storage terminals;

    (e) transmission networks and distributionnetworks including city gas infrastructure.

    (8) Housing, including the following:-

    (a) urban and rural housing including public /mass housing, slum rehabilitation, etc;

    (b) other allied activities such as drainage,lighting, laying of roads, sanitation andfacilities.

    I

    (9) Other miscellaneous facilities/services,including the following:-

    (a) mining and related activities;

    (b) technology related infrastructure;

    (c) manufacturing of components and materialsor any other utilities or facilities required bythe infrastructure sector like energy savingdevices and metering devices;

    environment related infrastructure;(d)

    (e)

    (f)

    (g) emergency services (includingpolice, fire and rescue).

    (10) such other facility service asprescribed.

    disaster management services;

    preservation of monuments and icons;

    medical,

    may be

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