www.andhrachamber.com Vol. LXXI August 2018 ANDHRA CHAMBER OF COMMERCE INFORMATION BULLETIN PROGRESS THROUGH COMMERCE AND INDUSTRY 1 BULLETIN ADVISORY BOARD Shri Ch. Venkateswara Rao CONTENTS Vice-President President Desk 4 Shri R.R. Padmanabhan Chairman, Interactive Session on New Comapies Act 2013 – Amendments There To 5 Foreign Trade Sub-Committee Presentation on “Paradise Regained: Aimla Enables Shri V.V. Sampath Kumar Strategic Profitability For The Technopreneur” 9 Chairman, Indirect Taxes Sub-Committee Foreign Trade 12 Shri K.N. Suresh Babu Start up India Recognition for ACCBI 15 E.C. Member Section 56(2)(VIIB) of the Income Tax Act, 1961 and Issue Price of Unlisted Equity Shares – Implications for Shri M.K. Anand Start-ups – Mr. P.S. Kumar 18 Chairman A Tale of Two Trains I.T. Sub-Committee – Mr. R.R. Padmanabhan 21 Recent Judgments in Vat CST GST Shri V.S. Prasanth Kumar – Mr. V.V. Sampathkumar 23 E.C. Member Trade Union to pay Compensation for Defaming the Management ----------------------------------------------- – Mr. S. Ravindran, Senior Advocate 26 Editor And Publisher Strategy, Execution and Delivery – SED Model Shri. P. Nandagopal – Mr. M.K. Anand 27 Secretary President of India Andhra Chamber of Commerce – Mr. M.S. Pandian, Advocate 29 ----------------------------------------------- The 8 Active Listening Secrets Printers – Mr S. Prakash, Rathinam Printers CEO of See Change Consulting 31 New No 27, Old No 13, Consumer Price Index Numbers 32 Angamuthu Street, Royapettah, 2 Chennai - 600 014 President DESK Dear Members, he Micro, Small and Medium Enterprises (MSMEs) are a vital part of the Indian Economy contributing Tto over 45% of the Industrial Production and around 40% of the total exports. MSMEs are the largest contributor in terms of employment generation in the manufacturing sector. MSMEs are developing as part of the value chain in almost all distinguished industry sectors like automotive industry, garments, textiles, food processing and leather industry. The MSME n was defined in the year 2006 on the basis of capital investment made in plant and machinery excluding investments in land and building. After passing of 12 years with continued erosion of value of Rupee and recent demonetization measure, there is a demand from the MSME for upward revision of the threshold limit. Adjusting the inflationary conditions, there is a need for enhancement of the limit at least by three to four times. The Governments of India have now proposed to change the criterion of defining MSMEs using turnover as the basis. The turnover basis is more advantageous and realistic as it would be transparent and the authorities could always cross check the turnover through GSTN plat form. To curb the practice of under reporting on employment, value of plant and machinery in the MSME sector, the Government should enact the draft proposals for suitable amendments to the definition of MSMEs at the earliest. Needless to add that many sectors where in MSMEs have substantial share such as Automotive components, food processing, pharmaceuticals among others have been craving for many fold increase in the investment limit to be compliant of the new mandatory and industrial standards. The Ministry of MSME have proposed the turnover based criterion for MSMEs with a view to facilitate flow ofcredit to MSME sector without the need of the collaterals, third party guarantees and certification from the Accounting Professionals periodically.The lender banks should give importance to Project viability and secure the credit facility purely on the primary security of assets financed. Over all, the new definition has a vast improvement over the earlier definition and should help MSMEs to face the new challenges in a better time frame. Dr. V.L. Indira Dutt President 3 CHAMBER NEWS “Interactive session on New Companies Act – Amendments thereto” on August 2, 2018. n “Interactive Session on New Companies Corporate Affairs constituted a Companies Law A Act – Amendments thereto” organsied by Committee for addressing difficulties of the stake the Chamber was held on August 2, 2018 at the holders in complying with the rules. conference Hall of the Chamber at Chennai office. The amendment Act of 2017 has introduced Shri M.R. Bhat, Regional Director (South) and changes in the Companies law, especially in relation to Shri A.S. Ponraj, Registrar of Companies, Tamil importance of timely filing of forms, liberalization of Nadu, Ministry of Corporate Affairs, Government process and procedure, more specifically for granting of India were the Chief Guest and Guest of Honour. inter-corporate loan & managerial remuneration, Shri G. Ramachandran, Chairman, Company Law enlarging the scope of accountability, disclosures, Sub-Committee of the Chamber was the coordinator investor protection and corporate governance. of the programme. The Companies (Amendments) Act 2017 Dr.V.L. Indira Dutt, President, Andhra Chamber broadly sought to strengthen corporate Governance of Commerce welcomed the Chief Guest, Guest Standards, initiate strict action against defaulting of Honour, Speaker and the participants. In her companies and help improve ease of doing business welcome address Dr.V.L. Indira Dutt observed: in the country”. “Enactment of the Companies Act 2013 was one Shri M.R. Bhat, Regional Director (South) in of the most significant legal reforms in India, aimed his inaugural address observed:” The Government at bringing Indian Companies Law in line with the considered many of the suggestions made by global standards. the Committee and introduced the Companies On many fronts, corporate sectors faced (Amendment) Bill 2016 in the Lok Sabha in March significant implementation challenges. The 2016. It was later referred to the standing Committee Government continued to receive representations on Finance for further examination. After considering from several quarters for further review and the suggestions of the Standing Committee and simplification of the 2013 Act. The Ministry of other related developments, the 2016 Bill renamed 4 as the Companies (Amendments) Bill 2017 and it was Further, the amendments made so far is expected to reintroduced in Lok Sabha and passed in July 2017. address the difficulties in implementation, facilitating The Amendment Bill was approved by the Rajya ease of doing business, rectifying omissions and Sabha on December 19, 2017. It got assent from the inconsistencies in the Act. The 2017 Amendment Act Honourable President of India on January 3, 2018 has enlarged the scope of Small Companies, stringent and has been notified in the Official Gazette of the provisions for delayed Compliances, Harmonization same date with staggered implementation dates. with the Accounting Standards, the Securities and Several provisions have been amended to align the Exchange Board of India Act, 1992 and the regulations Act with various rules and regulations of the SEBI made thereunder, and the Reserve Bank of India Act, and the RBI -- certain sections which dealt with 1934 and the regulations made thereunder”; insider trading, forward dealing have been omitted. Shri G. Ramachandran, Practicing Company Disclosures to be made in the prospectus have also secretary in his presentation covered in detail been aligned with the powers of SEBI to regulate the amendments made to various sections, objectives, IPOS. issues and difficulties faced by the stake holders and One of the most applauded amendments made in requisite remedial action by the Government. the amendment act is that – the quantum of penalty Earlier Dr.V.L. Indira Dutt, President extended will now be levied taking into consideration, the size floral welcome to the Chief Guest Shri M.R. Bhat and of the company, nature of business, injury to public Guest of Honour Shri A.S. Ponraj. interest, nature and gravity of default, repetition of More than 65 participants drawn among the default etc. Member-corporate sector have participated in the The 2017 Amendment Act addressed difficulties Interactive Session. in implementation, facilitated ease of doing business Shri M.R. Bhat, Shri A.S. Ponraj and Shri helped achieving better harmonization with other G. Ramachandran answered the questions raised by statutes such as the Reserve Bank of India Act, the participants. 1934 and regulations made there under and rectifies inconsistencies in the 2013 Act. The Government of Later, Dr. V.L. Indira Dutt, President presented India is adopting a highly collaborative approach and mementos to the Chief Guest , Guest of Honour and addressing the various challenges. the Speaker. Shri A.S. Ponraj, Registrar of Companies in his The meeting concluded with a hearty vote of thanks address observed:” The companies are expected to proposed by Shri C. Nagendra Prasad, Vice-President. retain more transparency in their activities and provide a true and clear picture to the stake holders. 5 SEMINAR ON A.P. Capital Present & Future Plan On August 13, 2018 Seminar on A.P. Capital – Present & Future Plans It is heartening to note that the state has also started A organize by the Chamber office at Vijayawada to focus on the fields of information technology was held on August 13, 2018 at Hotel Gateway, and biotechnology. Several major industries are in Vijayawada operation in Automobiles and Auto components Dr. Sreedhar Cherukuri, IAS., Commissioner of Industry, Cement, Sugar, Spices, Mines and Minerals, Capital Region Development Authority (CRDA) Textiles and Apparels, Bulk drugs and Pharmaceuticals, Government of Andhra Pradesh was the Chief Guest.