Monthly Archives: June 2021

minimum vesting period

SEBI has vide its notification dated 15th June, 2021 removed the minimum vesting period of one year for an employee under the SEBI (Share Based Employee Benefit) Regulations in case of a death of the said employee. Hitherto there was a one year vesting period in case of employee stock options and stock appreciation rights.

The regulations already specified that in case of death of an employee during the vesting period, all the options, stock appreciation rights, benefits etc. shall vest in his legal heirs or nominees. Now taking this further SEBI has relaxed the requirement of minimum vesting period of one year in case of death of any employee. This right shall immediately devolve onto his legal heirs/ nominees even where the one year vesting period is not over.

This is applicable only in case of deaths occurring after 1st April, 2020.

https://www.sebi.gov.in/legal/circulars/jun-2021/relaxation-from-the-requirement-of-minimum-vesting-period-in-case-of-death-of-employee-s-under-sebi-share-based-employee-benefit-regulations-2014_50545.html

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reporting of LRS remittances

RBI has mandated vide its circular dated 17th June, 2021 that all reporting by banks in respect of remittances under liberalised remittance scheme should be done in XBRL format from July 2021 onwards.

Its a monthly return to be submitted by the 5th of the succeeding month and captures figures of no. of applications under the LRS scheme and amount remitted.

The XBRL site for this purpose can be accessed at  https://xbrl.rbi.org.in/orfsxbrl

In case there is no remittances, then NIL report should be submitted.

This is what gets my goat, India is a return friendly country, for every tom dick and harry government department wants multiple returns and forms to be submitted and NIL in case there is no data for that particular month. I don’t understand why they want NIL returns also to be submitted, can it not be presumed to be NIL in case the return is not filed, why specifically and NIL return to be filed.

I guess returns and forms is the way the government controls our activities to ensure that the businesses do not stray from the line of compliance. In some jurisdictions, there are forms like 15CA, 15CB where apart from the multiple returns for any ridiculous rule, there are CA certificates also insisted. Like that we have BB, CC, DD ZZ files and returns to be submitted. Damn!!

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common format for issue of PUC

Ministry of Road Transport & Highways has issued a notification dated 14thJune, 2021 for a common format of the PUC (Pollution Under Control) Certificate to be issued across the country, under Central Motor Vehicle Rules 1989.The salient features of the PUCC are as under-  

(a) Introduction of uniform Pollution Under Control Certificate (PUC) format across the country and linking the PUC database with the National Register.

  (b) The concept of Rejection slip is being introduced for the first time. A common format of rejection slip is to be given to the vehicle owner in case the test result value is more than the maximum permissible value, as mandated in the concerned emission norms. This document can be shown at the service centre for getting the vehicle serviced or can be used, in case the PUCC centre device is not working properly when tested at another centre.

 (c) There will be confidentiality of information viz. (i) Vehicle owner’s mobile number, name and address (ii) engine number and chassis number (only the last four digits to be visible, the other digits shall be masked) 

  (d) The owner’s mobile number has been made mandatory, on which an SMS alert will be sent for validation and fee.   

  (e) If the enforcement officer has reason to believe that a motor vehicle is not complying with provisions of Emission standards, he may communicate in writing or through electronic mode to direct the driver or any person in-charge of the vehicle to submit the vehicle for conducting the test in any one of the authorized Pollution Under Control (PUC) testing stations. If the driver or person in-charge of the vehicle fails to submit the vehicle for compliance or the vehicle fails to comply, the owner of the vehicle shall be liable for payment of penalty.

If the owner fails to comply with this, the registering authority shall, for reasons to be recorded in writing, suspend the certificate of registration of the vehicle and any permit granted, until such time a valid “Pollution under Control “certificate is generated.  

(f) Thus, enforcement would be IT-enabled and would help in better control over polluting vehicles. 

 (g) The QR code shall be printed on the form. It will contain the complete information about the PUC Centre.

https://pib.gov.in/PressReleasePage.aspx?PRID=1727854

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validity of transport docs extended

Ministry of Road Transport & Highways has extended the validity of all documents relating to Motor Vehicles Act, 1988 and Central Motor Vehicle Rules, 1989 upto 30th September, 2021.

Validity of fitness, permit (all types), license, registration and any other concerned document (not specified) is extended upto 30th June, 2021.

This is in view of the covid pandemic.

https://pib.gov.in/PressReleasePage.aspx?PRID=1727971

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MSME regn validity extended

Ministry of Micro, Small & Medium Enterprises has extended the validity of the Udyog Aadhar Memorandum from 31/3/2021 to 31/12/2021. A notification has been issued to that effect.

Hitherto, all existing MSME registrants were required to migrate to the new portal by 31/03/2021 and all the old MSME registrations would have been rendered null and void. Now in view of the covid pandemic, the Ministry has decided to continue with the old registrations upto end December, 2021.

All existing MSME registrants under the old platform need to migrate to the new Udayam portal which is easy and simple and requires some few details of the applicant, besides the PAN of the unit and aadhar of the Director/ Partner/ Proprietor.

https://pib.gov.in/PressReleasePage.aspx?PRID=1727980

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cable television network rules amended

The Central Government today issued a notification amending the Cable Television Network Rules, 1994 thereby providing a statutory mechanism for redressal of grievances/complaints of citizens relating to content broadcast by television channels in accordance with the provisions of the Cable Television Network Act, 1995.

At present, there is an institutional mechanism by way of an Inter-Ministerial Committee to address grievances of citizens relating to violation of the Programme/Advertising Codes under the Rules. Similarly, various broadcasters have also developed their internal self-regulatory mechanism for addressing grievances. However, a need was felt to lay down a statutory mechanism for strengthening the grievance redressal structure. Some broadcasters had also requested for giving legal recognition to their associations/bodies. The Hon’ble Supreme Court in its order in WP(C) No.387 of 2000 in the matter of “Common Cause Vs Union of India & Others” while expressing satisfaction over the existing mechanism of grievance redressal set up by the Central Government, had advised to frame appropriate rules to formalize the complaint redressal mechanism.

In the aforementioned background, the Cable Television Network Rules have been amended to provide for this statutory mechanism, which would be transparent and benefit the citizens. At the same time, self-regulating bodies of broadcasters would be registered with the Central Government.

At present  there are over 900 television channels which have been granted permission by the Ministry of Information and Broadcasting all of which are required to comply with the Programme and Advertising Code laid down under the Cable Television Network Rules. The above notification is significant as it paves the way for a strong institutional system for redressing grievances while placing accountability and responsibility on the broadcasters and their self-regulating bodies.

Am not able to source the gazette notification for the same, once it reaches my hand, will provide a detailed review of the amended cable television network rules.

https://pib.gov.in/PressReleasePage.aspx?PRID=1727961

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VC board meetings

MCA vide its notification dated 15th June, 2021 completely eliminated rule 4 of the companies (meetings of the board and its powers), rules, 2014 which laid down the items which cannot be considered in a video conferencing or audio visual means board meeting. Core items such as approval of financial statements/ board report, approval of prospectus, amalgamation, merger, demerger, acquisition and takeover and audit committee meetings for consideration of accounts.

Now by completely removing this negative list of items which cannot be considered via video conferencing methods, all items can now be taken by this method.

To view the MCA circular please visit their site.

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settlement of running account

SEBI has vide its circular dated 14th June, 2021 slightly modified the settlement of running account of client’s funds lying with the trading member as follows:

5.1. The settlement of running account of funds of the client shall be done by the TM after considering the End of the day (EOD) obligation of funds as on the date of settlement across all the Exchanges, at least once within a gap of 30 /
90 days between two settlements of running account as per the preference of the client.
5.2. In case of client having any outstanding trade position on the day on which settlement of running account of funds is scheduled, a TM may retain funds calculated in the manner specified below:
5.2.1. Entire pay-in obligation of funds outstanding at the end of the day on settlement of running account, of T day & T-1 day.
5.2.2. Margin liability as on the date of settlement of running account, in all segments and additional margins (maximum upto 125% of total margin liability on the day of settlement). The margin liability shall include the end of the day margin requirement excluding the MTM and pay-in obligation, therefore, TM may retain 225% of the total margin liability in all the segments across exchanges. Computation for arriving at retention of excess client funds based on above points would be as under:

^ Excess securities of Rs. 55,000 (i.e. 280000-225000) is not required to be unpledged.
5.2.3. TM will first adjust the value of securities (after applying appropriate haircut) accepted as collateral from the clients by way of ‘margin pledge’ created in the Depository system for the purpose of margin and value of commodities (after applying appropriate haircut) respectively and thereafter TM shall adjust the client funds.
5.2.4. It is clarified that the excess securities (in the form of margin pledge) or any cash equivalent collateral identifiable with the client and deposited with CC, after adjustment of the 225% of margin liability need not be unpledged.
5.3. Client’s running account shall be considered settled only by making actual payment into client’s bank account and not by making any journal entries. Journal entries in client account shall be permitted only for levy / reversal of charges in client’s account.
5.4. For the clients having credit balance, who have not done any transaction in the 30 calendar days since the last transaction, the credit balance shall be returned to the client by TM, within next three working days irrespective of the date when the running account was previously settled.

5.5. In cases where physical payment instrument (cheque or demand draft) is issued by the TM towards the settlement of running account due to failure of electronic payment instructions, the date of realization of physical instrument
into client’s bank account shall be considered as settlement date and not the date of issue of physical instrument.

5.6. Retention of any amount towards administrative / operational difficulties in
settling the accounts of regular trading clients (active clients), shall be
discontinued.
5.7. The Authorized person is not permitted to accept client’s funds and securities. The TM should keep a proper check. Proprietary trading by Authorized person should be permitted only on his own funds and securities and not using any of the client’s fund.
5.8. Once the TM settles the running account of funds of a client, an intimation shall be sent to the client by SMS on mobile number and also by email. The intimation should also include details about the transfer of funds (in case of
electronic transfer – transaction number and date; in case of physical payment instruments – instrument number and date). TM shall send the retention statement along with the statement of running accounts to the clients as per
the existing provisions within 5 working days.
5.9. Client shall bring any dispute on the statement of running account, to the notice of TM within 30 working days from the date of the statement.

This is interesting because my broker sends me margin statement & settlement statement, which i don’t understand heads or tails of it. The whole system is presently opaque and not transparent at all. They should send the information which we lay persons can understand it fully. Never have i got monies settled into my bank account so far. There is something seriously wrong with the system. SEBI should look into it.

https://www.sebi.gov.in/legal/circulars/jun-2021/settlement-of-running-account-of-client-s-funds-lying-with-trading-member-tm-_50570.html

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Shops & Establishment regn

MCA has vide its notification dated 7th June, 2021 allowed for registration under shops & establishment act of various states in the same incorporation document as before i.e. SpiCe B+ in Agile Pro. Now in place of Agile Pro form, Agile Pro S form shall be substituted.

Under a single window concept, MCA allows incorporation of a company while at the same time granting tax registrations (PAN/ TAN) GST (if required), Professional tax (depends on the state), PF/ ESIC (mandatory but registration is only for name sake, no returns to be filed until the unit crosses the employee threshold as provides in these statutes), Bank a/c (for a few select banks) and now Shops & Establishment act.

Shops & Establishment act is applicable only for commercial entities employees x number of persons in their unit. It is a local body requirement like from the respectively municipality. Addition of this registration into the MCA portal is a welcome move.

The MCA circular is available at the MCA site.

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MSME registration

Government has announced a simplication of the registration process for MSME units on its Udayam portal. Now only PAN (permanent account no. of tax) and Aadhar (obviously of one of the Director or Partner or of the Proprietor) is required.

Need to see whether this intent is actually translated into action on the website. Registration on the MSME portal is not a difficult task, yet it asks for certain basic details of the unit proposed to be registered, which in my view is quite fair.

https://pib.gov.in/PressReleasePage.aspx?PRID=1727325

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mandatory hallmarking of gold jewellery

Mandatory hallmarking of gold jewellery comes into effect from 16th June, 2021. Few features of the scheme are given below:

  1. Hallmarking will be initially be starting from.256 districts of the country which have Assaying marking centres.
  1. Jewellers with annual turnover upto Rs. 40 lac will be exempted from mandatory Hall Marking.
  1. Export and re-import of jewelry as per Trade Policy of Government of India – Jewellery for international exhibitions, jewellery for government approved B2B domestic exhibitions will be exempted from mandatory Hall Marking.
  1. Gold of Additional carats 20, 23 and 24 will also be allowed for Hall Marking.
  1. Watches, fountain pens and special types of jewellery viz. Kundan, Polki and Jadau will be exempted from Hall Marking.
  1. Jewellers can continue to buy back old gold jewellery without hallmark from consumer.
  1. In order to give adequate time to the manufacturers, wholesalers and retailers of Gold Jewellery, there would be No penalties till August end.

Old jewellery can be got hallmarked as it is, if feasible by the jeweller or after melting and making new jewellery.

https://pib.gov.in/PressReleasePage.aspx?PRID=1727399

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Aparoopa

Assamese movie “Aparoopa” directed by Jahnu Barua and starring Suhasini Mulay, Biju Phukan among others .

Its a nice poignant story of two woman in a small village in Assam. One Radha who wants to bring stage theatre to the village but the village folks feel endangered by her radical ideas and start a rumour campaign against her so much that she does not get married anywhere.

Another girl, Aparoopa or Roopa (Suhasini Mulay) is a wife of a widower tea estate owner who has no time for her being busy in managing his large tea estate. She is bored like hell, unproductive and childless. In comes Rana (Biju Phukan) who is visiting his ailing mother and who had a love affair going on with Roopa before he left for the Army. Rana is contented in the army and doesn’t want to come back to the village once his mother passes away.

Roopa feels the pangs of love grow up in her whilst Rana is around. What happens to Radha and what happens to Roopa in the end is an interesting contrast. A movie of much anguish, sadness, contemplation from Jahnu Barua which is his first film. He has interspersed the movie with lot of Assamese culture folk songs, dances and like which makes the movie quite fascinating. Its also the first Assamese film produced by NFDC. imdb 7/10

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FATF non compliant jurisdictions

RBI has issued a circular dated 14th June, 2021 wherein they have barred investments from jurisdictions which are non FATF compliant into Payment System Operators (PSOs). Its not a complete ban but they are not authorised to give significant influence to investors from FATF non compliant jurisdictions. A threshold of 20% of the voting power or potential voting power has been established to distinguish significant influence.

PSOs who already have investments from FATF non compliant jurisdictions may continue with the said investments and also seek fresh investments from the same, in order to maintain continuity of business operations.

The circular can be found here

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12114&Mode=0

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income tax forms 15CA/15CB

Finance Ministry has vide press release dated 14th June, 2021 relaxed the timeline for filing of forms 15CA and 15CB.

Form 15CA is a declaration by resident Indian for making payment to non resident after deduction of tax and 15CB is the certificate issued by the chartered accountant that the tax provision has been complied.

The relaxation is because of the glitches in the new income tax portal, which is a disaster to say the least. Its totally user unfriendly and to navigate through the maze of regulations, clauses, sub clauses require the expert knowledge of a CA, which in my view is very unfortunate. If the portal cannot be accessed and used by layman than it is not useful at all and should be junked immediately.

Secondly and seriously Income Tax should eradicate all these multiplicity of forms and returns to be filed for every single transaction. Its a shame and not at all Ease of Doing Business, in my view.

https://pib.gov.in/PressReleasePage.aspx?PRID=1727001

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Krush Groove

American musical movie “Krush Groove” (1985) directed by Michael Schulz and starring Blair Underwood, Sheila E among others.

Its a story of a record label owner growing too fast with no official finance from banks etc. Russell (Blair Underwood) who owns Krush Groove has multiple hits to his label’s name but no money to finance production of records, those were the gramophone record days not unlike today’s digital era. He is forced to drop into a loan shark for the funds which then he is unable to repay and the consequences.

One of the music groups belongs to his brother who then moves away to another record label because there is no official written contract between them. It all comes to a pass in the end. Meanwhile both he and his brother are wooing a red hot singer Sheila.

Lot of foot tapping music in the movie, which makes up for the weak story. The singing and dancing are super throughout. IMDB 3/10

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