AabidAabid & Co.& Co. Zayn Consulting Private Limited. Zayn Consulting Private Limited. 15/03/2021 15/03/2021 [TYPE THE COMPANY NAME] 20212021 AABID & CO. CONTENTS CORPORATE LAWS Pages.... 03 to 07 INSOLVENCY & BANKRUPTCY MATTER (IBC) UPDAT8S Pages....08 to 10 FOREX LAWS / BANKING LAW2 Pages.... 11 to 12 SECURITIES LAWS & CAPITAL MARKET UPDATES Pages .... 13 to 21 TAXATION - DIRECT AND INDIRECT Pages.... 22 to 26 DEAL CORNER Pages.... 27 to 38 INTERNATIONAL CORPORATE NEWS UPDATES Pages...39 to 40 COURT / TRIBUNALS CASE LAWS Pages...41 to 51 AABID & CO. Page 2 A. CORPORATE LAWS: AABID & CO. Page 3 PARLIAMENT PASSES ARBITRATION AMENDMENT BILL TO PROTECT TAXPAYER MONEY – BUSINESS STANDARD Section 36 of the (Arbitration) Act says the arbitration award be set aside if it is against public policy, said Law Minister Ravi Shankar Prasad in Rajya Sabha Parliament approved a Bill to amend the arbitration law that would ensure all stakeholders get a chance to seek an unconditional stay on enforcement of arbitral awards where an agreement is “induced by fraud or corruption”. The Arbitration and Conciliation (Amendment) Bill, 2021, was passed by voice vote in the Rajya Sabha. The Bill was passed in the Lok Sabha on February 12. It will replace an Ordinance issued on November 4, 2020. Replying to a discussion on the Bill in the Upper House, Law Minister Ravi Shankar Prasad said the changes in the Bill would avoid payment of tax payers’ money as an award in cases where the agreement or contract is “induced by fraud or corruption”. He said, “Section 36 of the Act provides that the arbitration award would be set aside if it is against the public policy. The contracts or agreements induced with corruptions and frauds would be considered ‘against public policy’.” “There was a provision under Sector 36 that there would not be direct stay as somebody has to challenge that to get the stay (on the award). Today we are saying that if an award is challenged and if prima facie the court finds that it is induced with fraud or corruption then the court would stay the award.” The minister said, “I don't understand why they get agitated by the mention of corruption. Should such (arbitration) awards be given in India which are induced with corruption and where CBI inquiry is on? Such people by collusive agreement get the award through taxpayers’ money.” “We only want that there should be fair arbitration in India. Our only intention is that people should not loot taxpayers’ money through arbitration awards.” Immediately after the passage of the Bill, Deputy Chairman Harivansh adjourned the Rajya Sabha till Monday as Opposition parties continued raising slogans demanding discussion on the three Central farm laws. ICAI ISSUES GUIDANCE NOTE ON ACCOUNTING BY E-COMMERCE ENTITIES - THE HINDU BUSINESSLINE Clears the air on the accounting treatment of unique aspects of e-commerce biz model E-commerce entities will now have better guidance on various aspects of revenue and expense recognition for transactions conducted online. The CA Institute has now come up with a 'guidance note' on accounting by e-commerce entities, sources said. AABID & CO. Page 4 E-commerce is the activity of electronically buying or selling products or other services over the internet. This business model lets the firms and individuals conduct business over electronic networks, such as the internet. The new Guidance Note is the first comprehensive one guiding various accounting issues unique to e-commerce. A guidance note is mandatory for the members of the CA Institute. Several years back, the Institute of Chartered Accountants of India (ICAI) had come up with a Guidance Note on dot com companies. This, however, did not cover the accounting issues around unique aspects of e-commerce, which has seen quantum growth only in the recent decade. India’s e-commerce market is expected to grow to $ 200 billion by 2026 from $ 38.5 billion as of 2017, a recent report had projected. E-commerce companies had reported sales worth $ 4.1 billion across platforms in the festive week of October 2020, driven by smartphones. In India, 100 per cent FDI is allowed in B2B e-commerce. Also, 100 per cent FDI under the automatic route is permitted in the marketplace model of e-commerce. The latest ICAI guidance note throws light on revenue recognition on either ‘gross’ or ‘net basis’. This is critical as e-commerce companies’ valuation are linked to the revenues accounted for in their books. Also, the Guidance Note has covered aspects like ‘Right of Return’ against goods or services or coupons, giving the right to the customers to exchange the goods or services sold against other goods/services. It also deals with revenue recognition aspects around advertising services, web hosting services etc. Accounting aspects on financing extended by certain e-commerce entities to customers —for example, ‘buy now, pay later’ scheme or an extended EMI payment scheme have also been covered in the Guidance Note. Since many e-tailers sell their products through resellers or consignment agents, the guidance note has elaborated on this front’s revenue recognition aspects. In consignment arrangements, the risk and rewards of ownership do not get transferred. In this, a buyer (a dealer or distributor) takes physical possession of the goods but does not assume all the risks and rewards. MCA ENABLES AADHAR AUTHENTICATION FOR GSTIN ON COMPANY INCORPORATION Companies (Incorporation) Third Amendment Rules, 2021. New Delhi, Dated: 05th March, 2021 G.S.R… (E).- In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Incorporation) Rules, 2014, namely: – AABID & CO. Page 5 1. (1) These rules may be called the Companies (Incorporation) Third Amendment Rules, 2021. (2) They shall come into force on the date of publication in the Official Gazette. 2. In the Companies (Incorporation) Rules, 2014,- in the Annexure, in Form INC 35 AGILE- PRO, part of SPICe+, in serial number 12, at the end of Table (A), the following shall be inserted, namely.- “Do you wish to perform Aadhar authentication for GSTIN registration. Yes No [F. N . 1/13/2013 CL-V, Vol.IV] K.V.R. MURTY, Joint Secretary. Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 250(E), dated the 31st March, 2014 and last amended vide number G.S.R.91(E), dated the 1st February, 2021. GOVT. TWEAKS GUIDELINES FOR MSME REGISTRATION Govt. notifies that for MSMEs, the exemption from the requirement of having GSTIN shall be as per the provisions of the CGST Act, 2017; Further states that in case of any proprietorship enterprise not registered under any Act or rules of the Central Government or the State Government, the proprietor may use his or her PAN for registration of the enterprise in the Udyam Registration portal and for all other types of enterprises PAN shall be mandatory: Ministry of MSMEs MCA: OPCS, SMALL COMPANIES TO FILE ANNUAL RETURN IN FORM MGT- 7A FROM FY 2020-21 In line with the amendment to Sec. 92, MCA amends the Companies (Management and Administration) Rules, 2014 to inter alia state that from FY 2020-21, every OPC and Small Company, who shall file their annual return in Form No. MGT-7A (Abridged Annual Return for OPCs and Small Companies); Does away with the requirement of filing extract of Annual Return (Form MGT-9); Further, under the Rule 20 (Voting through electronic means), adds explanation for expressions like ‘agency’, ‘cyber security’, ‘electronic voting system’, ‘remote e-voting’ and ‘voting by electronic means’; Specifies that for Rule 20, ‘agency’ means the NSDL or any other entity approved by MCA subject to certain conditions, and ‘remote e- voting’ means the facility of casting votes by a member using an electronic voting system from a place other than the venue of general meeting: MCA MCA NOTIFIES AMENDMENTS TO ANNUAL RETURN PROVISIONS W.E.F. MARCH 5 MCA notifies amendments to Sec. 92 (Annual Return) of Companies Act, 2013, introduced vide Companies (Amendment) Act, 2017, w.e.f. March 5, 2021; Consequent to the amendment, AABID & CO. Page 6 companies would not be required to provide particulars of their indebtedness in their Annual Returns; Further, the amendment also exempts companies from providing details pertaining to Foreign Institutional Investors’ names addresses, countries of incorporation, registration and percentage of shareholding held by them; The amendment also inserts a proviso to Sec. 92(1), which envisages that the Central Government may prescribe abridged form of annual return for One Person Company, small company and other class or classes of companies. RULES NOTIFIED FOR CODE ON WAGES ADVISORY BODY – ET The government has notified rules governing the constitution and functions of the central advisory board under the Code on Wages, paving the way for the government to initiate work on a national floor-level minimum wage. The Code on Wages prescribes for a statutory floor-level minimum wage for the country. The government is keen to roll out the four labour codes from April 1, and hence the need for determining the minimum floor wage at the earliest. No state can set their minimum wage below the national floor-level minimum wage. The current floor wage is only advisory, resulting in some states keeping minimum wages less than the floor wage, which is pegged at Rs 176 per day. AABID & CO. Page 7 B. INSOLVENCY &