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Raju and Prasad Chartered Accountants Raju and Prasad Chartered Accountants
February 2018 Volume 4, Issue 12
FOCAL POINT Newsletter from Raju and Prasad Chartered Accountants
Contact us:
Email : hyderabad@rajuandprasad.com
Website: www.rajuandprasad.com
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Dear Reader,
Our editorial comments for this month are on “New Resolution
Plan for Non Performing Assets”
This month we have covered “Computer Industry” in our
Industry Review.
Please give your views and also send this newsletter to your
friends.
Regards
For Raju & Prasad
Chartered Accountants
M Siva Ram Prasad
Partner
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Contents Contents ............................................................................................................................................................................................................. 2
Editorial ............................................................................................................................................................................................................... 3
New Resolution Plan for NPA .................................................................................................................... 3
Industry Review ........................................................................................................................................................................................... 5
Computer Industry ......................................................................................................................................... 5 Evolution of Computers ........................................................................................................................................................................................ 5 Computer Software .................................................................................................................................................................................................. 9 Programming languages ...................................................................................................................................................................................... 9 Operating systems ................................................................................................................................................................................................. 10 Indian Story ................................................................................................................................................................................................................. 11 Post liberalisation .................................................................................................................................................................................................... 13 Present status ............................................................................................................................................................................................................ 14 Problems and Challenges .................................................................................................................................................................................. 16
Policy Watch ................................................................................................................................................................................................. 18
Indirect Taxes ................................................................................................................................................. 18 Postponement of implementation of E Way Bill Rules .............................................................................................................. 18 Notifying renting service under reverse charge mechanism ............................................................................................... 18 Reduction of late fees for various returns .......................................................................................................................................... 18
Company Law .................................................................................................................................................. 18 Non-applicability of Accounting Standard 22 or Indian Accounting Standard 12 .............................................. 18 Reservation of Unique Name (RUN) facility....................................................................................................................................... 19
SEBI ...................................................................................................................................................................... 19 The change in disclosure of Total Expense Ratio (TER) .......................................................................................................... 19
Verdicts ............................................................................................................................................................................................................ 20
Direct Tax .......................................................................................................................................................... 20 Where assessee, a trust registered under section 12AA, was running various educational institutions,
in view of fact that it collected huge capitation fees from students for admission to various medical
colleges under the name of 'anonymous donations', the order passed by Director General (Inv.)
withdrawing approval granted to assessee-trust for exemption under section 10(23C)(vi), was to be
upheld ............................................................................................................................................................................................................................... 20 The principles for the coupled purpose of section 14A and Rule 8D of income tax law are applicable
prospectively, not retrospectively ............................................................................................................................................................. 20 The assessee cannot be denied certificate under section 197 on account of the fact that it is suffering
huge carried forward of losses ..................................................................................................................................................................... 20
Photograph of the Month……………………………………………………………………………………………………………………………21 Little Grebe in its nest at Bharatpur Bird Sanctuary ……………………………………………………………………21
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Editorial
New Resolution Plan for NPA
n the last working hours of 12th February,
RBI has issued new Resolution Plan (RP)
for solving the NPA problem of Banks. This
is done to have a simplified, harmonized
generic framework for stressed assets
especially in view of the IBC (Insolvency
and Bankruptcy) Code 2016.
The framework is more or less same as
before. Only thing is other restructuring
plans like Corporate Debt Restructuring
(CDR), Strategic Debt Restructuring (SDR),
Scheme for Sustainable Structuring of
Stressed Assets (S4A), Flexible structuring of
existing long term project loans, change of
ownership outside SDR stand withdrawn.
The Special Mention Account (SMA)
identification to facilitate the early
detection of potential NPAs continues with
a monthly reporting to Credit Repository
Information on Large Credits (CRILC).
Default in case of 5 Crore and above
exposure of entities should be reported on
a weekly basis to CRILC. Earlier reporting to
CRILC was not on weekly basis for
defaulters.
The resolution plan can be initiated by any
or all lenders jointly but documentation
should be done by all the lenders.
Resolution can be implemented only
when the activity is not in default with any
I
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of the lenders. Lenders shall engage Credit
Rating Agencies to do Independent
Credit Evaluation (ICE) in case of
restructuring or change of ownership. If the
residual debt is 50 crores and above, two
credit agencies must be involved. ICE is a
must for already restructured accounts
also.
Large accounts of 2,000 crores and above
as on 1-3-2018 shall be referred to under
IBC Code if in default (means atleast 20%
principal and interest outstanding or
interest capitalization sanctioned is to be
paid as per RP) on or after 1-3-2018. The
reference must be made if the default is
persisting for 180 days and application
must be filed under IBC within 15 days of
180 days period ending. If a resolution plan
is not implemented within the time limit
also, reference must be made under IBC.
In case of accounts with outstanding
amount less than 2000 crores but above
100 crores RBI will announce two year time
bound resolution plan.
Where already instructions have been
given by RBI to banks for reference under
IBC, transition arrangement is not
available.
These guidelines show the anxiety of RBI in
resolving the NPA problem of large
accounts under IBC so that the change of
management can be done by getting
bids from intending buyers.
Intention of the guidelines are positive,
provided decisions by courts under IBC
can resolve faster with the present number
of benches.
Where ever 100% lenders have to agree to
refer a case under IBC, is it practical and
time bound specially when Joint Lenders
Forum is withdrawn?
What is the sacrifice the banks can
maximum allow taking the provisions
already made?
Are there any incentives that can be
offered to buyers for reviving the sick
industries in the interest of the general
economy?
Is there any check that buyers are not
depending on fresh loans from banks?
The new guidelines may hasten the
process and revive the growth in general
and resolve the problem of NPAs.
-M Siva Ram Prasad
“Is it practical and time bound for 100% lenders approval to refer a case
under IBC?”
“Intention of the guidelines are positive provided decisions by courts under IBC can resolve faster with the present number of benches.”
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Industry Review
Computer IndustryEvolution of Computers
ver 7 to 8 decades computers have
contributed to many sectors in
changing education, science, technology,
health, defence etc., They have crept into
every walk of life and has become a
catalyst for general economic growth. The word Computer is derived from the Latin
words “Com” which means “with” and
“Putare” means “to settle”, “clear up”,
“reckon”. Both words put together may
mean to settle things or to reckon with
something. Reckon also means to count, to
calculate, to figure etc.
A device to count, calculate is called a
computer in usage. Perhaps this is the
reason Abacus which is used even today as
a toy to teach counting, is treated as the
earliest computer with a history of about
2500 years.
O
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Calculations what were done by humans
with their self skills were later done by
electrical calculating machines arrived in
1642, and later by electronic calculating
machines. Finally digital computers were
invented.
Pascal’s Calculator
The sector can be broadly divided into
hardware and software segments. The
hardware and software co-exists.
The first generation computers (1940-56)
were built with magnetic drums and
vacuum tubes with a disadvantage of
getting heated. Second generation
computers (1956-63) had used transistors.
Third generation computers (1964-71)
replaced them with integrated circuits. For
fourth generation computers (1971-2010),
microprocessors were used.
The computer remained no more a
calculator and extended to perform data
processing, storing, and retrieving data as a
programmable device.
The computers that have started with punch
card system and automatic loom have
undergone tremendous technological
advancements and mainframe computers
have become desktops with better
configuration and processing capacities,
with communication technology further
moving into networking. Invention of
internet made computer a knowledge hub
and communication giant.
Punch Card System
Future is with the next generation computers
with technological advances in Artificial
Intelligence, Nano Technology, and
Quantum Computing etc.
“The most celebrated marriage of the 20th century is the marriage between computers and communication”
- James Martin
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The computers can be classified on the
basis of processing capacity and their
functions. Broadly they can be classified as
Super Computers, Mainframe Computers,
Mini Computers, Micro Computers and
Portable Computers
Chronological events in the history of computer are given below
Year Events
1801 Joseph Marie Jacquard invents an automatic loom controlled by punch
cards
1822 Charles Babbage conceives of a steam-driven calculating machine that
would be able to compute tables of numbers
1848 Boolean algebra is invented by George Boole
1890 Herman Hollerith designs a punch card system to calculate the 1880 census
1936 Alan Turing invents universal machine, later called the Turing machine,
capable of computing anything that is computable.
1937 J.V. Atanasoff at IOWA State University, attempts to build the first computer
without gears, cams, belts or shafts.
1938 Konard Zuse created the Z1 computer, a binary digital computer using
punch tape
1939 Bell telephone laboratories completes Complex Number Calculator (CNC)
1941 Konard Zuse completed Z3, an early computer which was used for
aerodynamic calculations
1942 The first electronic computer "ABC - Atanasoff Berry Computer" was built by
John Vincent Atanasoff
1943
-44
Professors John Mauchly and J. Presper Eckert, built the Electronic Numerical
Integrator and Calculator (ENIAC) which was considered the grandfather of
digital computers.
1947 William Shockley, John Bardeen and Walter Brattain of Bell Laboratories
invented the transistor.
1951 John Mauchly and Presper Eckert had built the first UNIVAC (Universal
Automatic Computer)
1955 The FORTRAN programming language was developed by a team of
programmers at IBM led by John Backus
1955 The Computer age in India began with the installation of HEC-2M at the
Indian Statistical Institute (ISI) at Calcutta
1958 Jack Kilby and Robert Noyce unveil the integrated circuit, known as the
computer chip.
1959 Grace Hopper develops the computer language, which eventually known
as COBOL.
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1962 First computer game “Spacewar” is invented by Steve Russell and MIT
1963 The first mouse is invented by Douglas Englebart
1964 The first word processor is introduced by IBM
1969 UNIX, an operating system which was written in the C programming
language was developed at Bell labs
1970 Intel unveils the Intel 1103, the first Dynamic Access Memory (DRAM) chip.
1965
-70
MULTICS operating system was developed at Massachusetts Institute of
Technology (MIT) as a computer utility
1971 Alan Shugart and team of IBM engineers invented the "floppy disk," allowing
data to be shared among computers.
1971 Roy Tomlinson invents E-Mail
1973 Robert Metcalfe develops Ethernet for connecting multiple computers and
other hardware.
1974 IBM develops SEQUEL (Structured English Query Language) now known as
SQL
1975 Altair introduces the first portable computer
1981 The first IBM personal computer is introduced, which used the MS-DOS
operating system.
1983 Apple's Lisa is the first personal computer with a GUI (Graphical User
Interface)
1985 Microsoft announces Windows operating system.
1985 The first dot-com domain name is registered
1990 Tim Berners-Lee developed HyperText Markup Language (HTML), giving rise
to the World Wide Web (Internet).
1991 The World Wide Web is launched to the public
1998 Sergey Brin and Larry Page founded search engine “Google”
1999 The term Wi-Fi becomes part of the computing language and users begin
connecting to the Internet without wires.
2007 The iPhone brought many computer functions to the smartphone.
2011 Google releases the Chromebook, a laptop that runs the Google Chrome
OS.
2015 Microsoft releases Windows 10.
2016 The first reprogrammable quantum computer was created.
2017 The Defence Advanced Research Projects Agency (DARPA) of United States
is developing a new "Molecular Informatics" program that uses molecules as
computers. Computers of the Future May Be Minuscule Molecular Machines
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Computer Software
According to Techopedia, Software
means in general sense, is a set of
instructions or programs instructing a
computer to do specific
tasks. This word is used
to describe computer
programs, scripts,
applications etc.
System software includes device drivers,
operating systems, compilers, disk
formatters and text editors. This is the base
for Application
software.
Application
software is meant to
perform specific
tasks. Program
softwares are
software tools.
The software
industry can be divided into Business
Process Management (BPM), Information
Technology Enabled Services (ITES) and
Product Development.
Programming languages
Computational processes are
systematically programmed to enable the
performance of tasks through commands
is called a programming language.
Though punch card system was existing
two centuries ago, it was not considered
as a language, but this has led the way
to Analytical Engine by Charles
Babbage. First generation
computers were using machine
language which were very slow for
completion of tasks and many languages
were developed over years. Some of the
major developments in this direction are
1955 - FORTRAN (Formula
Translation)
1958 - LISP (List Processing)
1958 - ALGOL (Algorithmic
Language)
1959 - COBOL (Common
Business Oriented Language)
1964 - BASIC (Beginners All-
purpose Symbolic Instruction
Code)
1970 - PASCAL
1972 – C
1972 - PROLOG (Programming in
Logic)
1978 - SQL (Structured Query
Language)
1983 – C++
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1987 – PERL
1991 - PYTHON
1991 - VISUAL BASIC
1993 – RUBY
1995 - JAVA
1995 - JAVASCRIPT
2000 - ACTIONSCRIPT
2001 - C#
2003 - GROOVY
2009 - GO (Golang)
2014 – SWIFT
The programming languages can be
further classified into
Machine languages which are
interpreted in hardware
Assembly languages supplement to
machine language
High level languages which are
machine independent
System languages which are designed
for low level tasks
Konard Zuse with Z3 Computer
Scripting languages which are meant
for high level tasks
Domain specific languages which are
meant for special purpose
Visual languages which are non-text
based
Esoteric languages which have more
educational value
Operating systems
To provide interface between the user and
the computer hardware, operating system
is used which is a set of program modules.
This exploits resources like processors,
manage primary memory, secondary
memory and input/output devices
The operating systems evolved over last
seven to eight decades and are classified
as
o Serial processing systems
o Simple batch systems
o Multi programmed batch systems
o Time sharing systems.
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Example: IBM’s OS/360
o Personal computer systems
Example: MS-DOS, Microsoft
Windows and Apple Macintosh
o Parallel systems
o Network operating system
Example: Microsoft Windows Server
2008, UNIX, LINUX
o Symmetric multiprocessing model
o Asymmetric multiprocessing model
o Distributed systems
o Real time systems
Example: Scientific experiments,
medical imaging systems
Indian Story
In 1955, Indian Statistical Institute deputed
scientists to UK to familiarize with computer
science, when a computer imported from
British Tabulating Machines Limited (BTL)
was sold to India without technical
assistance.
The computer industry had its beginnings
with the scientific policy resolution passed
in parliament in 1958 which had
emphasized on science and technology.
This was further strengthened with the
experience after Chinese war in 1962,
where Government of India understood
the need for computers and electronics in
warfare and defence equipment. In 1963,
Government of India constituted a
committee under the leadership of H.J.
Bhabha for studying and preparing a plan
for the development of electronics in the
country.
On the recommendations of this
committee, Department of Electronics
(DOE) was started in Government of India
and Electronics Commission is also a part
of these recommendations. Incidentally, it
was Atomic Energy Commission where H.J.
Bhabha had already started his work in
computer electronics along with the Tata
Institute of Fundamental Research (TIFR),
who were the pioneers in building the first
computer and was named as Tata
Institute of Fundamental Research
Automatic Calculator (TIFRAC).
In line with government policy, Electronics
Corporation of India (ECIL) was
incorporated which was fully funded by
Government of India.
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In the initial years, the country was facing
foreign exchange problems and it was
very difficult to spend on import of
computers which was not a priority at that
time. The first generation computers were
imported with United States Agency for
International Development (USAID).
ECIL was given the responsibility of building
India’s computers as well as
commercializing the same. First indigenous
second generation computer TDC-12
(Trombay Digital Computer) was a
product of ECIL (1970).Subsequently 3rd
generation computers TDC 312 and TDC
316 were also the products of ECIL. A good
number of used and refurbished IBM 1401,
1620 and ICL 1900 were
brought into the
country by IBM.
Another committee was
formed under the
chairmanship of Shri R.
Venkataraman, a member of Planning
Commission (later President of India) to
study the impact of automation on
employment. Slow implementation of
computerization in the country was largely
due to a general impression that the
computers reduce the human
employment.
Mechanical Calculator
It was in 1978 when IBM was not willing to
dilute its equity under FERA dilution and
closed their operations in India, then a
space was created for Indian computer
companies. The Mini Computer Policy was
made in the same year and the
Department of Electronics has played an
important role in establishing the
electronics and computers, by
setting up National Center for
Software Development and
Computer Techniques (NCSDCT) in
1972, Air Defence Ground Environment
System (ADGES) in 1973, Computer
Maintenance Corporation (Previously
Computer Management Corporation) in
1975, National Informatics Centre (NIC) in
1976, and established regional computer
centres, National Center for Software
Technology (NCST) in 1983.
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The self-reliance and self-sufficiency goals
of Government of India started fructifying
between 1978 to 1990. Pioneers in
computers in the country were ECIL, DCM
Data Products and later ORG, Hindustan
Computers Limited and subsequently
WIPRO technologies, IDM etc.
India started developing and exporting
software and government encouraged
the exports and a policy for software
exports was made in 1986. Software and
Hardware parks were setup across the
country. Foreign Direct Investment in Mini
Computer manufacturing is allowed up to
40% and imports of hardware was
liberalized. Body shopping was also
considered as export. Offshore
development was given encouragement.
These two policy decisions have provided
opportunities for technical manpower.
Simultaneously communication networks
were improved by the efforts of
Mahanagar Telephone Nigam Limited
(MTNL) and Videsh Sanchar Nigam Limited
(VSNL). Later Centre for Development of
Telematics (CDOT) was established which
has spread the telephone communication
to rural areas with small exchanges. The
communication revolution made the
computer industry grow at a rapid speed.
The railway reservation system and public
call offices with microprocessor
generating bills immediately etc.,
enhanced the prestige of computer in
public eye. On the basis of Rangarajan
Committee recommendations
computerization started in Banks.
Apprehensions on reduction of
employment through computerization
diluted. In the year 1986, software
development was recognised as an
industry.
Networking initiatives commenced with
involvement of five IITs at Bombay, Delhi,
Kanpur, Kharagpur and Madras.
NASSCOM was formed in 1988.
Tim Berners Lee - Inventor of internet
Post liberalisation
Liberalisation in 1992 brought further
progress in this sector in the next quarter
century. Private sector participation was
allowed in tele communication sector and
Government of India started disinvesting its
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equity in MTNL, VSNL. Telephone Services
were privatized. VSNL started internet
services in 1995. In 1998, Government of
India had setup a Task force for the
development of this sector. About 108
recommendations were made by the task
force. 100% FDI in the sector was allowed
in 1999 and green flag was shown to
ecommerce by an enactment in
parliament in 2000. IBM has come back to
India. Y2K was another breakthrough for
the software companies in India.
NASSCOM initiated setting up of National
Institute for Smart Governance in
Hyderabad in 2002. Some of the
international majors started operating in
India include HP, IBM, Microsoft,
Accenture, Oracle, Intel etc.
Present status
As per the Ministry of Electronics and
Information Technology (MeITY), presently
there are 15,000 firms in this sector, out of
which about 1,000 firms are large.
The industry operates about 600 offshore
development centres in 78 countries. The
industry has tremendously grown over the
past 5 decades in the country with a
CAGR of 9.94% and expected to grow at
10.7% over 2016-17 and has a global
market share of 7% with the export
performance.
Software industry exports accounts to 38%
of total service exports from India with US $
117 billion consisting of IT Services US $ 65
billion, BPM US $ 26 billion and Engineering
and R&D services US $ 25 billion.
The exports of IT Industry across the globe in 2016 are as follows
(Source: Ministry of Electronics and Information Technology)
USA
62%
UK
17%
Europe
(Excluding UK)
11%
Asia
8%Rest of the
world
2%
“The growth in this industry is due to the increased market size, usage of technology, spending on R & D, trained workforce, and government policies”
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Software sector is contributing to 9.3% of
our GDP and providing direct employment
for 36,80,000 and stands as the largest
private sector employer.
The growth in this industry is due to the
increased market size, usage of
technology, spending on R & D, trained
workforce, and government policies.
FDI is allowed upto 100% under automatic
route in the industry except inventory
based model of ecommerce.
Government of India is also laying National
Optic Fiber Network (NOFN) to increase
the connectivity of about 22,000 Gram
Panchayats in the country
(Source: Ministry of Electronics and Information Technology)
The production of software in the year
2015-16 is amounting to Rs. 1,02,673 crores
while hardware is Rs.19,885 crores.
The imports of hardware is US $ 144.08
crores while the exports stood only at US $
35.85 crores
Production of hardware and software in India (Rs in Crore)
Year Software Hardware
2012-13 147,143 9,376
2013-14 173,176 17,484
2014-15 190,366 18,691
2015-16 102,673 19,885
Source: Ministry of Electronics and Information technology and Ministry of Statistics and Programme
Implementation
76.587.3 97.8
107.8 117
19.219
2121.7
24
0
50
100
150
2012-13 2013-14 2014-15 2015-16 2016-17
Revenue of IT-ITES Industry over years
Exports in US $ billions Domestic In US $ billions
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The National Policy on Information
Technology 2012 fixed a target of US $ 300
billion revenue from IT and BPM segment of
the industry by 2020. Also a target market
of US $ 225 billion by 2020 is fixed for Social,
Mobility, Analytics and Cloud (SMAC)
market which indicates the growth in
future years.
Problems and Challenges
1. The estimates of growth of exports for
2017-18 as per NASSCOM would be 7-8%
which is not an encouraging trend.
According to RBI, the declining trend in %
growth is continuing from 2012-13 20.8%,
2014-15 14.9% to 2015-16 7.3%. Software
exports has been a saving grace for India’s
trade deficit. If the sector shows signs of
deceleration, this may have an impact on
the economy in terms of growth and
employment.
2. Quality of education in the field is not
consistent and the exposure to latest
developments in the sector is not
commensurate at college level. University
industry dialogue in updating of skills needs
constant review.
3. As per the Fact Sheet of Ministry of
Electronics and Information Technology
(MeITY) 60% of revenue in the industry is
from testing IT services which is more than
product development in the country.
4. For a fast growth and meeting domestic
demands, imports were allowed liberally in
hardware which has hampered the
growth of hardware segment while China
is entrenched in a big way. Forex earnings
on one hand are spent with other.
“University Industry dialogue in updating skills needs constant review”
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5. According to Economic Survey-II 2017,
European Union is introducing Data
Protection and Privacy Rules, which restrict
the services provided from India. Work visa
rules are being reviewed by countries like
USA, Australia and UK will impact the
employment abroad. According to
certain estimates, there are signs of the
degrowth in employment in the coming
years in the domestic market.
Inspite of the challenges faced by the
industry, the growth drivers like increased
telecom services, adoption of telecom
technology, global OEM, increasing
embedded software in their products,
National Optic Fiber Network (NOFN)
spreading to rural areas and efforts to
increase the e-governance are the
opportunities for the industry for meeting
the future targets
-Team at Raju and Prasad
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Policy Watch
Indirect Taxes
Postponement of implementation
of E Way Bill Rules
The Central Board of Excise and Customs
vide notification no 11/2018 dated 2nd
February had postponed the
implementation of E Way Bill Rules by
rescinding the notification no 74/2017
dated 29th December 2017.
The date from which it comes into force
(Mandatory raising of E Way Bill) is yet to
be notified.
http://www.cbec.gov.in/resources//htdocs-
cbec/gst/Notification-11-2018-central_tax-
English.pdf
Notifying renting service under
reverse charge mechanism
The Central Board of Excise and Customs
vide notification no 3/2018 dated 25th
January 2018 has notified the service
provided by way of renting of immovable
property by Central government, State
government, Union territory or local
authority to any business entity located in
taxable territory as a supply covering
under reverse charge.
http://www.cbec.gov.in/resources//htd
ocs-cbec/gst/notfctn-03-2018-cgst-
rate-english.pdf
Reduction of late fees for various
returns
The Central Board of Excise and Customs
vide notification no’s 04/2018, 05/2018
and 06/2018 dated 23rd January 2018 has
reduced the late fees for filing of various
returns which is as follows
http://www.cbec.gov.in/resources/htdocs-
cbec/gst/Notification-4-2018-central_tax-
English.pdf
http://www.cbec.gov.in/resources//htdocs-
cbec/gst/Notification-5-2018-central_tax-
English.pdf
http://www.cbec.gov.in/resources//htdocs-
cbec/gst/Notification-6-2018-central_tax-
English.pdf
Company Law
Non-applicability of Accounting
Standard 22 or Indian Accounting
Standard 12
The Ministry of Corporate affairs vide
Notification no SO 529(E) F.NO.17 / 32 /
2017-CL-V dated 5th February 2018 has
exempted a government company of
S.No Name of the
Return
Revised
late fees
1 Form GSTR -1
(Return showing
outward supplies)
Rs 50 per
day
(Rs 25 CGST
and Rs 25
SGST)
2 Form GSTR – 5
(Non-Resident
Return Filing)
Rs 50 per
day
(Rs 25 CGST
and Rs 25
SGST)
3 From GSTR – 5A
(Non-Resident
OIDAR)
Rs 50 per
day
(Rs 25 CGST
and Rs 25
SGST)
<Hyderabad » NewDelhi » Mumbai » Bangalore » Jalgaon » Navi Mumbai » Tirupati >
Page 19 Raju and Prasad Chartered Accountants
following classes from applicability of
Accounting Standard 22 or Indian
Accounting Standard 12 relating to
deferred tax asset or deferred tax liability,
for seven years with effect from 1st April,
2017.
(a) Public financial institution under
sub-clause (iv) of clause (72) of
section 2 of the Companies Act,
2013 such as Industrial Investment
Bank of India, National Housing
Bank, Small Industries
Development Bank of India,
National Bank for Agriculture and
Rural Development and Export
Import Bank of India
(b) Non-Banking Financial Company
registered with the Reserve Bank
of India under section 45-IA of the
Reserve bank of India Act, 1934;
and
(c) Company engaged in the
business of infrastructure finance
leasing with not less than seventy
five per cent of its total revenue
being generated from such
business with Government
companies or other entities
owned or controlled by
Government.
https://www.taxmann.com/filecontent.aspx
?Page=CIRNO&id=104010000000054800&isx
ml=Y&search=&tophead=true&tophead=true
Reservation of Unique Name (RUN)
facility
The Ministry of Corporate Affairs vide
notification no SO 351(E) [F.NO. 1/1/2018
-CL.I] dated 23rd January 2018 has
amended Section 4 of the companies
act and provided the facility of RUN in its
website. Now, any person intending for
incorporation of a new company can
use such facility and if the name is
available, it will be reserved for a period
of 20 days. In case of application by
existing company for reservation of name
or change in name, it will be reserved for
a period of 60 days. This will be
applicable from 26th January 2018.
https://www.taxmann.com/filecontent.aspx
?Page=CIRNO&id=104010000000054548&isx
ml=Y&search=&tophead=true&tophead=true
SEBI
The change in disclosure of Total
Expense Ratio (TER)
The Securities and Exchange Board of
India vide circular no SEBI/ HO / IMD /DF2
/CIR /P/2018/18 dated 5th February 2018
has issued following guidelines to all
Mutual Funds/Asset Management
Companies (AMCs)/ Trustee Companies/
Board of Trustees of Mutual Funds
i) AMCs shall disclose prominently, on a
daily basis, the TER of all schemes under a
separate head “Total Expense Ratio of
Mutual Fund Schemes” on their websites
ii) Any increase in the Total Expense Ratio
(TER) of any scheme shall be
communicated to investors of the
scheme through notice via email or SMS
at least three working days before such
change and the same is to be disclosed
in their website prior to such change.
https://www.sebi.gov.in/legal/circulars/feb-
2018/total-expense-ratio-change-and-
disclosure_37707.html
<Hyderabad » NewDelhi » Mumbai » Bangalore » Jalgaon » Navi Mumbai » Tirupati >
Page 20 Raju and Prasad Chartered Accountants
Verdicts
Direct Tax Where assessee, a trust registered
under section 12AA, was running
various educational institutions, in view
of fact that it collected huge capitation
fees from students for admission to
various medical colleges under the
name of 'anonymous donations', the
order passed by Director General (Inv.)
withdrawing approval granted to
assessee-trust for exemption under
section 10(23C)(vi), was to be upheld
-Vide decision of High Court of Karnataka vide
Navodaya Education Trust Vs. Union of India
The Honorable High Court of Karnataka
vide Navodaya Education Trust V. Union
of India stated that the approval under
10(23C) can be canceled on the
ground of receipt of huge capitation
fees from students under “anonymous
donations” as the trust registered under
section 12AA is not satisfied the
conditions stated in approval.
https://www.taxmann.com/filecontent.aspx?Pa
ge=CASELAWS&multipage=false&id=1010100000
00179187&isxml=Y&search=&tophead=true&top
head=true
The principles for the coupled purpose
of section 14A and Rule 8D of income
tax law are applicable prospectively,
not retrospectively
- Vide Decision of Supreme Court of India vide
Commissioner of Income tax, 5-Mumbai Vs.
Essar Teleholdings Ltd
The Honorable Supreme Court of India
vide commissioner of income tax,5-
mumbai Vs Essar Teleholdings Ltd held
that the provisions of section 14A and rule
8D regarding the disallowance of
expenses relating to exempt income will
apply prospectively i.e., from the
assessment year 2008-09 and not prior to
that and it can’t be interpreted
otherwise.
https://www.taxmann.com/filecontent.aspx?Pa
ge=CASELAWS&id=101010000000178934&isxml=
Y&search=&tophead=true&tophead=true
The assessee cannot be denied
certificate under section 197 on
account of the fact that it is suffering
huge carried forward of losses
-Vide decision of High Court of Bombay vide Tata
teleservices (Maharashtra) Ltd vs. Deputy
Commissioner of Income tax - (TDS) – 2(3)
The honorable High Court of Bombay
vide Tata Teleservices (Maharashtra) Ltd
Vs. Deputy Commissioner of Income tax -
(TDS) – 2(3) stated that the assessee
cannot be denied certificate under
section 197 (lower TDS deduction
certificate) on account of the fact that it
is suffering huge carried forward of losses
in the business and there is no likelihood
of any tax becoming payable in the
future
https://www.taxmann.com/filecontent.aspx?Pa
ge=CASELAWS&id=101010000000178928&isxml=
Y&search=&tophead=true&tophead=true
Disclaimer Information in this Newsletter, charts, articles, or
any other statements regarding market or any
other financial information, is obtained from the
sources, which we feel reliable. We do not
warrant or guarantee the timeliness or
accuracy of the information. The reader shall
not take any decision based on the facts or
figures of the newsletter without professional
advice.
<Hyderabad » NewDelhi » Mumbai » Bangalore » Jalgaon » Navi Mumbai » Tirupati >
Page 21 Raju and Prasad Chartered Accountants
►►► PHOTOGRAPH OF THE MONTH Little Grebe in its nest at Bharatpur Bird Sanctuary
- Clicked by M Siva Ram Prasad
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