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Taxation & Accounting

Category: Service Tax (page 3 of 418)

Procedure and Criteria for Export of N-95/FFP2 Masks

Procedure and Criteria for Export of N-95/FFP2 Masks

The Directorate General of Foreign Trade (DGFT)  has specified the procedure and criteria for the export of N-95/FFP2 Masks vide Trade Notice No. 25/2020-2021. With this notification, the DGFT has amended the Export Policy of N-95/FFP2 Masks and placed their exports in the Restricted Export Item (Non-SCOMET) category from prohibited earlier. Hence the exporter needs to obtain an export authorization from the Government for shipments of N-95/FFP2 Masks.

DGFT also announced that the export quota for N-95/FFP2 Masks has been fixed and shipment will be allowed only based on the export quota. The exporter can apply for export authorization/license online through the New DGFT Platform under Non-SCOMET Restricted items sections. The present article briefs the Procedure to obtain an export license for the export of N-95 or FFP2 Masks.

Important Announcement for Exporter

The Trade Notice on 31st August 2020 has outlined the detailed Procedure and Criteria for submission and approval of applications for the export of N-95 or FFP2 Masks.

  • The DGFT has announced that the N-95/FFP2 Masks is put it in the restricted category, making it mandatory for exporters to get a license from DGFT for export of the product.
  • As per the trade notice, the DGFT also announced that the export quota for N-95/FFP2 Masks has been fixed and shipment will be allowed only based on the export quota.
  • The exporter can apply for an export license as Non-SCOMET Restricted items and exports are not required to forward any hard copy of the application via email or post to DGFT.

Note: All masks except N95/FFP2 masks or its equivalent are freely exportable.

Export Quota for N-95/FFP2 Masks

The DGFT is fixed the export quota for N-95/FFP2 Masks. As per the notification, the export of only 50 lakh N-95 /FFP2 Mask will be allowed per month.

Export of only 1 crore total units of N-95/FFP2 Masks will be allowed for August and September.

Prescribed Date for Application Submission

The application filed for the export of N-95 or FFP2 Masks from 7th – 9th September 2020 will only is considered for the issue of export authorization. All applications for the export of N-95 or FFP2 Masks will be examined as per the Handbook Procedure.

The validity of Export Authorization/License

The validity of Export Authorization/License for the export of N-95 or FFP2 Masks is 3 months from the date of the issue.

Eligibility Criteria to Obtain Export License

The firm applies for the export license should be the manufacture of N-95/FFP2 Masks.

Documents Required for Export License

The exporter needs to furnish the following documents to obtain export authorization for the shipment of N-95/FFP2 Masks.

  • Documentary proof of manufacturing N-95/FFP2 Masks
  • Bureau of Indian Standards (BIS) certification for medical N-95/FFP2 Masks
  • Copy of Purchase order
  • Copy of the Import Export Code  of the Firm

Note: All documents must be duly self – attested by the authorized person of the firm.

Only one application per Import Export Code (IEC) will be considered for processing for a month.

Procedure to get the license for Export of FFP2/N-95 Masks

The exporter can obtain the Export Authorization of Non-SCOMET Restricted items by applying DGFT‘s ECOM application module.  After a successful login using the ECOM application module through Digital Certificate on the DGFT website, the ECOM Reference number will be displayed.

After furnishing the following details, the exporter needs to upload all supporting documents.

  • Shipment Details
  • Details of Products to be exported
  • Details of foreign Buyer or Consignee

Once the DGFT accepted the license request, the export authorization for the shipment of N-95 or FFP2 Masks will be issued.

Click here to know more about Procedure to get Export Authorization of Non-SCOMET Restricted items

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Faceless Assessment Scheme

Faceless Assessment Scheme

E-assessment Scheme 2019 was introduced vide two notifications, i.e. 61/2019 and 62/2019. Recently, on 13th August 2020, the Prime Minister, Shri Narendra Modi launched a new platform ‘Transparent Taxation- Honoring the Honest’. The new platform announces faceless assessment scheme, faceless appeal and taxpayers charter. Notably, the faceless assessment and the taxpayers charter is given immediate effect. However, the faceless appeal will be effective from 25th September 2020.

Accordingly, two notification, i.e. notification no. 60/2020 and notification no. 61/2020 both dated 13th August 2020 substituted the e-assessment scheme to the faceless assessment scheme. The same is taken up and briefly explained in the current article.

The structural framework of faceless assessment

Following table explains the number of units involved in the faceless assessment and its respective working-

Unit Working of the unit
National e-Assessment Centre (shortly known as NeAC) It will facilitate and control the entire faceless assessment.
Regional e-Assessment Centre (shortly known as ReAC) It is situated in different States. Via automated allocation system, NeAC shall allocate the cases to ReAC.
Assessment Unit (shortly known as AU) AU shall carry out the Assessment of the selected case.
Verification Unit (shortly known as VU) It will perform the verification functions like cross verification, recording of the statement, an examination of books of accounts etc.
Technical Unit (shortly known as TU) It will provide technical assistance like advice on accounting or legal or forensic or information technology or transfer pricing etc.
Review Unit (shortly known as RU) It will review the draft assessment order.

The process adopted for faceless assessment

The faceless assessment will work as follows-

  1. Issuance of the notice and reply thereon-

On selection of the case for assessment, the National e-Assessment Centre shall serve the notice to the assessee. In-turn, the assessee, needs to reply, within a period of fifteen days from the date of receipt of the notice.

  1. Allocation of the case-

The case shall be allocated via the automated allocation system to an Assignment Unit in any one Regional e-Assessment Centre

  1. Action by an Assignment Unit-

Post allocation of the case, the Assignment unit may request the National e-Assessment Centre to-

  • Obtaining additional information or document from the assessee or any other person, or
  • Conducting certain inquiry or verification by the Verification Unit, or
  • Getting technical assistance from the Technical Unit.
  1. Making of draft assessment order-

The Assignment Unit will prepare a draft assessment order based on the information and details/ inputs received. In case the penalty proceedings are to be initiated, the Assignment Unit should provide the details of the same in the draft assessment order.

  1. Assessing the draft assessment order-

The National e-Assessment Centre shall study/ review the draft assessment order and take any of the following action-

  • Finalize the assessment-

If satisfied, the National e-Assessment Centre can finalize the assessment as per the draft assessment order. Accordingly, the assessee will be served a copy of assessment order, and if applicable, the notice initiating the penalty proceedings shall also be served.

Further, based on the assessment, the assessee will also be served a demand notice specifying the total sum payable or refund amount due.

  • Provide an opportunity of being heard-

In case a modification is proposed, the assessee will be provided with an opportunity of being heard.

  • Assign the draft assessment order to a review unit-

Through an automated allocation system, the National e-Assessment Centre can assign the draft assessment order to a review unit. The order can be assigned to a review unit in any one Regional e-Assessment Centre.

If the draft assessment order is finalized, no further action is required. However, the above process will continue based on the reply filed by the assessee or based on the suggestions given by the Review Unit. Markedly, the above process shall continue untill the draft assessment order gets finalized.

  1. Action post finalization of the assessment order-

Once the assessment order is finalized, the National e-Assessment Centre will transfer all the electronic records to the Assessing Officer having jurisdiction over the assessee.

Cases not covered under Faceless Assessment

The assessment of the following cases is kept outside the purview of the Faceless Assessment-

  1. The cases related to international tax.
  2. The cases related to the Search Assessment under section 153A.

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GSTR-2B – Auto-drafted Input Tax Credit Statement

GSTR-2B – Auto-drafted Input Tax Credit Statement

Recently, the Central Board of Indirect Taxes and Customs has launched Form GSTR-2B. Form GSTR-2B is a static auto-drafted statement which contains input tax credit details. The form will indicate availability/ non-availability of input tax credit to the registered taxable person against each document filed by their suppliers. Accordingly, the new form will undoubtedly help the taxpayer in reconciling the data generated in Form GSTR-2B with the data in their books of accounts.

Importantly, Form GSTR-2B for the month of July 2020 is made available on the GST portal for reference and feedback purpose.

The salient features of the new form and the steps to download the same from the GST portal is explained in the current article.

Salient Features of Form GSTR-2B-

In order to understand Form GSTR-2B, it is important to go through the salient features of the same which are listed hereunder-

  • Form GSTR-2B is an auto-drafted Input Tax Credit Statement.
  • The statement will be generated, monthly, on 12th day of the next month for every registered person.
  • The input tax credit will be reflected in the statement based on the information furnished by the suppliers vide the following forms-
  • Form GSTR-2B mainly consists of two tables. The coverage of both the tables are explained hereunder-
Coverage of Table 3 Coverage of Table 4

Table 3 covers the input tax credit available as on the date of generation of Form GSTR-2B.

 

The summary is divided into two parts-

Part A – covers the input tax credit that may be availed and

Part B – covers the input tax credit that shall be reversed.

Table 4 covers the input tax credit not available as on the date of generation of Form GSTR-2B.

 

The summary is divided into two parts-

Part A – covers the input tax credit that is not available and

Part B – covers the input tax credit reversal.

The form also covers the information on the import of goods from the ICEGATE system. The same also includes the inward supplies of goods received from Special Economic Zone Units and Special Economic Zone Developers.

It is important to note here that the form doesn’t cover the information of reverse charge credit on import of services and hence the taxpayer should enter the same in Table 4(A)(2) of Form GSTR-3B.

Further, Part A of Table 4 covers only the following two cases-

  1. Cases, wherein, the recipient is not eligible for the input tax credit as per section 16(4) of the Central Goods and Service Tax Act, and
  2. Cases, wherein, the supplier (GSTIN) and the place of supply are in the same State and the recipient in another State.

For other reversals, the taxpayers are required to self-assess and reverse.

  • The taxpayer should avail the input tax credit on a self-assessment basis, in case the return filing date of Form GSTR-5 and Form GSTR-6 is later than the date of generation of Form GSTR-2B.

STEPS to download Form GSTR-2B-

The registered person can download Form GSTR-2B by following the below steps-

STEP 1 – Visit GST portal (i.e. https://www.gst.gov.in/ ).

STEP 2 – Click on ‘Login’ icon.

STEP 3 – Enter appropriate ‘Username’, ‘Password’ and the characters show.

STEP 4 – Navigate the path Services > Returns > Returns Dashboard.

STEP 5 – Select the ‘Financial Year’ and ‘Return Filing Period’.

STEP 6 – Select Form GSTR-2B.

Noticeably, the taxpayer can view or download Form GSTR-2B in both excel or PDF format. Further, the taxpayer can view/ download the supplier-wise summary. Also, the taxpayer can view/ download the document-wise details of all invoices, credit notes and debit notes etc.

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Guidelines for Farming Agreement

Guidelines for Farming Agreement

The Department of Agriculture, Cooperation, and Farmers Welfare issued the Guidelines for Farming Agreement as per the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020. As per the provisions of this Ordinance, a farmer/FPO may enter into a Farming Agreement for the sale of any farming produce before the actual production takes place. The agreement should cover all the relevant aspects related to parties, product, price, and conciliation process and delivery mechanism. The current article briefs the guidelines for Farming Agreement .

Farming Agreement

A Farming Agreement is a written document between the farmer or Farmer Producer Organization (FPO) and sponsor (the person purchasing the farming product).

  • The Farming Agreement should be written in the local language and the presentation of terms should be simple and easily understandable to the parties involved
  • A Farming Agreement should be prepared and signed by all the parties to the agreement
  • Farming Agreement may be registered in the e-registry constituted by the respective State Government as per rules framed under the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020

Know more about National e-Governance Plan in Agriculture (NeGP-A)

General Conditions for Framing the Farming Agreement

The condition for preparing the farming agreement is explained in detail below:

The farming agreement should be drafted through in-person discussions between the Sponsor or his representative and the FPO/Farmers or their representatives.

Note: The terms of the agreement need to be clear to all parties involved in the agreement.

Conditions for FPO

In case the Farmer Producer Organization enters into a Farming Agreement, responsibility for the performance of the Agreement should be appropriately assigned by the members of the FPO.

Conditions for sharecropper

In case a sharecropper is involved in the agreement, he will be responsible for the following activities:

  • Receiving and using any inputs from the sponsor
  • Cultivation of produce of the appropriate quality
  • Production of produce using good standard practices.

As per the agreement, delivering the contracted quantities will be one of the responsibilities of farmers. No clause in the agreement can be in derogation of rights of such sharecropper.

Conditions for sharecropper

The Farmer should read the framed Agreement or have the Agreement read over and explained to him /her by an appropriate independent third party. The farmer can also seek the advice of a legal advisor before signing the agreement.

Other Conditions’

The agreement needs to be made available to the farmer/FPO for signing at a reasonable time before the commencement of an agricultural season. The Farming Agreement should indicate the following details:

  • Nature of the farming
  • Size of land area
  • Survey number of the farmer’s field
  • The business address of Sponsor
  • Name of the village
  • Address of the farmer

Purpose of the Farming Agreement

  • The Sponsor will supply inputs, technology, and extension services to farmer/FPO, after framing the agreement.
  • The Farmer should agree to produce and sell the farming produce to the sponsor on the agreed terms and conditions

Period of validity of the

The period of validity farming agreement is subject to the minimum period of one crop season or one production cycle. Farming agreements are valid for the maximum period of five years.

In the case the single production cycle runs more than five years, the validity of the farming agreement can extend beyond five years.

Details to be Mentioned in the Farming Agreement

The details to be mentioned in the Farming Agreement are explained in detail below:

Supply of inputs by the Sponsor

Where the sponsor is required to supply inputs, it should be ensured that the agreement specifies this requirement. The Sponsor shall share the required inputs (including delivery) and technical advice to the farmer either on cost-basis/free of charge/cost-sharing basis. The sponsor must deliver the inputs to the farmer at the time and place specified in the agreement. The sponsor is responsible for any loss or damage to the farming produce, production site, assets, and any legal consequence of inputs supplied by him.

 Use of Inputs by the Farmer/FPO

The inputs supplied by the sponsor should be checked/verified for its quantity and quality by the farmer who can notify the sponsor in writing in case of any shortfall/defects. The farmer should use the inputs following any instructions framed in the Farming Agreement. The farmer would ordinarily be responsible for any loss or damage to the inputs after their acceptance from the sponsor. The farmer can return any unused inputs to the sponsor at the end of the production cycle or otherwise as per the agreement.

Production of Farming produces by the farmer/FPO

The Farmer must follow the production methods and standards (social, labour, environmental standards) for the cultivation of crop as outlined in the farming agreement. The Sponsor or his representative/s may visit the production site to provide advice, supervise any production process, and/or verifying the Farmer’s compliance with the prescribed production methods. Frequency and time of visits as provided in the agreement should be coincided with normal business hours and should not unduly burden or inconvenience the farmer.

Inspection of the Farming Produces

As per the Farming agreement, after production, the sponsor or his representative will inspect the farming produce to comply with the quality standards

Delivery of the farming produces

As per the agreement, the farming produce should be packaged by the farmer as per the commodity-specific requirements before delivery.

The Sponsor needs to weigh the packaged produce before accepting delivery.

Grades and Standards of Farming Produce

Promoting awareness among the Farmer/FPO about various grades and standards of the farming produce is one of the responsibilities of the Sponsor.

The grade standards to be followed for the farming produce may be related to physical/Physico-chemical/both attributes such as size, shape, colour, brix-acid ratio, oil content, specific gravity, acid value, free fatty acid, and Refractive index.

The quality grades may be categorized into the following:

  • Premium quality
  • Fair average quality
  • Below fair average quality

Pricing Mechanism

The product must be purchased at a price provided for in the farming agreement. The price may be linked to market price and in such cases; a minimum guaranteed price must be specified.

Sale of Farming produces by the Farmer to the sponsor:

The place and mode of delivery of the product should be specified in the farming agreement. The sale of farming produce by the farmer to the sponsor may be at the farm gate subject to provisions in the agreement, especially when there is no feasibility for transportation.

Payment of Sales Proceeds

The Sponsor should make the payment to the farmer on the day of delivery of the Farming Produce.

Availing Credit and Insurance Facilities

Either the Farmer/Sponsor can seek insurance for the crop. If the Farmer agrees to purchase the crop insurance or weather insurance, it may be at his own cost or be paid for by the sponsor if provided for in the agreement. If the sponsor agrees to purchase insurance on behalf of the farmer, it may be at the sponsor’s own cost.

Termination of the Farming Agreement

The Farming Agreement only is terminated between the two parties in any of the following circumstances:

  • By mutual agreement of the Parties
  • Either Party by giving written notice to the other Party, if the Agreement provides for the same

Upon expiration of the Farming Agreement, both the Parties may agree in writing to its renewal for the next crop cycle.

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Highlights of 41st GST Council Meeting

Highlights of 41st GST Council Meeting

The focus area of the 41st GST Council Meeting, held on 27th August 2020, was the only shortfall of GST compensation and ways to compensate the states for the revenue shortfalls.

Noticeably, the 41st GST Council Meeting was conducted via video conferencing under the Chairmanship of the Finance Minister, Shrimati Nirmala Sitharaman. The current article summarizes the key highlights of the GST Council Meeting.

Options made available to states to meet the shortfalls

The figurative working says that the total shortfall for the Financial Year 2020-2021 works out to be INR 2,35,000 Crores. Out of the said total shortfall of INR 2,35,000, only INR 97,000 Crore relates to a shortfall on account of GST implementation. The remaining shortfall is marked as a shortfall on account of COVID-19 pandemic.

In order to meet the shortfall, the states are given two options. The two options so available with the states are explained hereunder-

OPTION 1 – State borrowings via Centre facilitation-

  • Under this option, the Centre can facilitate the shortfall occurred only on account of GST implementation i.e. INR 97,000 Crore,
  • The borrowings will be possible through a special window by the Reserve Bank of India (RBI),
  • The borrowings can be repaid after 5 years on the collection of the cess, and
  • A reasonable rate of interest will be payable on such borrowings.

OPTION 2 – State direct borrowings from RBI –

Under this option, state can go for direct borrowing to the extent of INR 2,35,000 Crores from the RBI.

The states are required to communicate the selected option within a period of seven working days.

Certain clarifications

While addressing the press, certain clarifications were given. The said essential clarifications are-

  • The Government will provide further 0.5% relaxation in the state borrowings limit under the FRBM Act. The relaxation will facilitate the states to borrow more funds.
  • The above arrangement will remain valid only for the Financial Year 2020-2021. For the period from April 2021, the situation will be further re-assessed and decide accordingly.

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Late Fee Reduction under GST

Late Fee Reduction under GST 

For the first time, in the 40th GST Council meeting held on 12th June 2020, the council recommended late fee reduction/ waiver with respect to delay in filing Form GSTR-3B for the earlier period. The relief will help clear the backlog of returns and impart some working capital relief to the taxpayer in current pandemic situation.

Interestingly, after the recommendation, several notifications and press release were done on the matter. The flow of the same, along with the final outcome, is being taken up in the present article.

The flow of notifications and press release done with respect to Form GSTR-3B Late Fee Reduction/ Waiver-

  1. Recommendation done in 40th GST council meeting

The waiver / reduction of late fee, as recommended, for the delay in filing of Form GSTR-3B for the earlier period is tabulated hereunder-

Particulars Tax period Late fee payable
Cases, wherein, there is no tax liability (i.e., NIL return) July 2017 to January 2020 NIL
Any other case July 2017 to January 2020 INR 500 per return.
  1. Notification No. 52/2020- Central Tax dated 24th June 2020-

Based on the recommendation of the GST council, the following relief was notified vide notification no. 52/2020-

Particulars Tax period Late fee payable
Cases, wherein, there is no tax liability (i.e., NIL return) July 2017 to January 2020 NIL
Any other case July 2017 to January 2020 INR 250 per return.

As per the notification, the above relief is available only if the pending returns in Form GSTR-3B is filed between the period 1st July 2020 to 30th September 2020.

  1. Notification No. 57/2020- Central Tax dated 30th June 2020-

Late fee waiver/ reduction announced vide notification no. 57/2020, in case of the taxpayer having turnover up to INR 5 Crores in the preceding financial year, is-

Particulars Tax period Late fee payable
Cases, wherein, there is no tax liability (i.e., NIL return) February 2020 to July 2020 NIL
Any other case February 2020 to July 2020 INR 250 per return.

Late fee waiver/ reduction, in case the taxpayer having turnover more than INR 5 Crores in the preceding financial year, is-

Particulars Tax period Late fee payable
Cases, wherein, there is no tax liability (i.e., NIL return) February 2020 to July 2020 NIL
Any other case February 2020 to July 2020 INR 250 per return.

In both the above cases, relief is available only if the pending returns in Form GSTR-3B are filed by 30th September 2020.

  1. Press release dated 3rd July 2020-

As per the latest press released by the Central Board of Indirect Taxes and Customs (i.e., CBIC), the maximum late fee payable has now been capped at INR 500 per return.

Final relief

Clubbing up all the above and updating the same with the latest press release in the matter, the late fee waiver/ reduction in case of Form GSTR-3B is as under-

Particulars Tax period Late fee payable
Cases, wherein, there is no tax liability (i.e., NIL return) July 2017 to July 2020 NIL
Any other case July 2017 to July 2020 INR 500 per return.

Importantly, the above relief of late fee waiver/ reduction is available only if the pending returns are filed by 30th September 2020.

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Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP)

Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP)

The Government of India to encourage start-ups, launched the Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP). This scheme was initiated to reach out to start-ups and protect and promote their Intellectual Property Rights (IPR) and thus encourage innovation and creativity among entrepreneurs. The Scheme was started on a pilot basis in January 2016 and was in force up to March 2020. The Department of promotion of Industry and Internal Trade (DPIIT) has notified that the SIPP scheme is now being extended further for a period of three years that is up to March 31, 2023.

Objective of the SIPP

  • The primary objective of the SIPP is to promote awareness and acquire of Intellectual Property Rights among the Start-Ups.
  • The scheme also aims to nurture and mentor innovative and emerging technologies among Start-Ups
  • To assist Start-Ups in protecting and commercialize Intellectual Property Rights by providing access to high-quality IP services and resources.

SIPP Benefits for Start-Ups

  • To promote awareness and encourage IPR protection amongst Start-Ups the Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP) launched.
  • Start-ups can avail patent, trademark, and design services by paying them only required statutory fees and professional fees are excluded as part of the SIPP scheme.
  • The Government would pay nominal professional fees for the services related to procuring the Intellectual Property Rights (IPR) to the advocates or trademark agents in charge of handling the IPR process.
  • Start-ups can avail of a complete start-to-end array of services under this SIPP scheme, including general advice, assistance in drafting applications, preparing and filing responses to examination reports, appearing at hearings, contest opposition and ensuring the final disposal of the Intellectual Property Rights application.
  • For effective implementation of the scheme, the DPIIT has empanelled several facilitators, who are required to provide IPR related services to Start-Ups.
  • As per the scheme, facilitators will not charge anything from a Start-Up. The fees are paid directly by the government.

As per the revised guidelines, the Start-Ups enrolled under this scheme will not be required to obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification.

Start-Ups Eligibility Criteria for SIPP

To avail the benefit of the SIPP scheme, companies have to be recognized as Start-Ups by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Start-Up India initiative. Start-Ups recognized by DIPP can avail Intellectual property Rights (IPR) related benefits such as the SIPP scheme.

The Start-Up must meet the following eligibility criteria to avail the DPIIT Certificate of Recognition:

  • The Period of existence and operations of the Start-Ups should not exceed 10 years from the date of formation
  • The DPIIT Certificate of Recognition is provided for the Start-Ups which is incorporated as a Private Limited Company, a Limited Liability Partnership (LLP), or a Registered Partnership Firm.
  • The entity should have an annual turnover of Rs. 100 crore for any of the financial years since its federation
  • To get DPIIT Certificate of Recognition, the company should not have been incorporated by splitting up or recreating an already existing entity.
  • The entity should be working towards the development of a product, process, or service.
  • The entity should have a scalable business model with high potential for the creation of wealth and employment. The firm should have the potential to generate employment or create wealth.

Know more about the procedure to avail the DPIIT Certificate of Recognition for Startups

  • The Certificate of Recognition given by DPIIT may be verified from the Start-Up India web portal
  • The Start-Ups covered under this scheme will not be required to obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification.
  • However, Start-Ups will be required to give a self-declaration that they have not availed funds under any other Government scheme to pay the facilitator, patent agent, trademark agent for filing, and prosecute their IP application.

Empanelment of Facilitators

For effective implementation of the scheme, the DPIIT has empanelled several facilitators, who are required to provide IPR related services to startups. As mentioned above, the facilitators should not charge anything from the startup and the fees are paid directly by the government.

The facilitators will be empanelled by the Controller General of Patents, Designs and Trade Marks (CGPDTM). The CGPDTM will revise the list of eligible facilitators for SIPP scheme from time to time. The startups can check the list of facilitators from the official website of DPIIT.

Eligible Facilitator

  • Any Trademark Agent registered with the CGPDTM
  • Any Patent Agent registered with the CGPDTM
  • Any Advocate as defined under The Advocates Act, 1961 who is entitled to practice law as per the rules laid down by Bar Council of India, who is well-versed with the provisions of the relevant Acts and Rules, and is actively involved in filing and disposal of applications for trademarks.
  • A government department, organization, agency or CPSU (like TIFAC, NRDC, BIRAC, MeitY, CSIR, Patent Information Centers (PICs) through an authorized representative; and Technology and Innovation Centers (TISCs)

Note: However, it is to be clarified that the IP application has to be signed by a person authorized to do so under the provisions of the relevant Act and Rules.

Responsibility for Facilitators

Facilitators will be responsible for the following functions as per the Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP).

  • Facilitators will have to give general advisory on different intellectual property rights (IPR) to Startups on pro bono basis
  • Providing information on protecting and promoting IPRs to Startups in other countries on pro bono basis
  • The facilitator will assist in filing and disposal of the IP applications related to patents, trademarks and design at the national IP offices under the CGPDTM
  • Drafting provisional and complete patent specifications for inventions of Startups
  • The facilitator is required to prepare and file responses to examination reports and other queries, notices or letters by the IP office
  • Appearing on behalf of a startup at hearings
  • Contesting opposition, if any, by other parties
  • Ensuring final disposal of the IPR application

Duration of the SIPP Scheme

As mentioned above, The Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP) shall be applicable for 3 years with effect from 1st April 2020.

Fees for Patents, Designs, and Trademarks Application

The fee structure tabulated here will be applicable for any number of patents, trademarks, or designs that may be applied for by a Startup.

The facilitator will not charge anything from the Startup or the entrepreneur, and these fees will be paid directly to the facilitator by the Government through the office of the CGPDTM and disbursed by the respective IP office.

Sl.No

Stage of Payment Patent Trademark

Design

1

At the time of filing of Application 10,000 2,000 2,000

2

At the time of final disposal of Application Without Opposition 10,000 2,000 2,000
3 With Opposition 15,000 4,000 4,000

Payment of Fees to Facilitators

A facilitator can claim the fee from the IP office as per the stage of work completed.

The bill for the claim of the fee shall be accompanied by the self-declaration from the concerned startup that it has not availed of funds from any other Government scheme to pay the facilitator/patent agent/trademark agent for filing and prosecute their IP application.

If an application is withdrawn or abandoned before disposal of application, the facilitator shall be entitled to fees only for filing of the application and not for the disposal of the application.

For claiming the reimbursement of fees, the facilitator needs to submit an invoice to the respective IP Office mentioning the Registration Number obtained from DPIIT for the startup in respect of which the IP application is filed by the facilitator.

In the case of a Trademark application, final disposal of the application implies the registration of the Trademark

Statutory Fees

The startup needs to pay the statutory fees for patent, trademark, or design applied.

Procedure for filing application for Patents, Designs, and Trademarks

In respect to the Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP), the procedure to be adopted for applying for Patents, Designs, and Trademarks is as follows:

Procedure for Patent Application

The start-Ups willing to file a patent application can select the facilitator and the list facilitators are available in the official website of CGPDTM

Startups can contact him/her directly for the preparation of the SIPP scheme application. If startups are unable to select a facilitator, contact the Head office of the respective patent officer, get 3 names of facilitator and select the name of the facilitator from the three.

The facilitator after assessing the patentability of the invention and other aspects as per Patents Act and Rules and being satisfied that the patent application will be After that, the Facilitator will file a complete Patent specification at the appropriate Patent Office on behalf of the start-up as per jurisdiction by following the prescribed procedure under the Patent Act and Rules.

Fee for filing a patent application and other statutory fees will be borne from the startup.

After a patent application is received by the Patent Office, the facilitator can submit the claim for fees as per the fee schedule mentioned above. Furnish the following documents for fee reimbursement.

  • A letter addressed to the Head of Office of the respective Patent Office
  • Claimed fee for the drafting of the application
  • ID proof as a Registered Patent Agent
  • Invoice

The Head of Office will verify the ID of the facilitator and ascertain the suitability of payment and arrange for the payment of a fee to the facilitator after receiving the claim from the facilitator.

Simultaneously with making the payment to the facilitator, the Head of Office will forward to the Office of the CGPDTM the details of the application and payment made to the facilitator.

The facilitator shall monitor and perform further steps of proceedings of startup’s patent application, prepare the reply to any query from Patent Office, attend the hearings.

Designs Application

For filing and processing applications for designs, the list of Facilitators for Patents will be applicable. The procedure for claiming the fees by the Facilitator, application processing will be carried out as per the designs Act and Rules, as elaborated above.

Trade Marks Application

For filing and processing applications for trademarks, the list of Facilitators for Trademarks will be applicable. After filing a trademark application for a startup as per the Trade Marks Act and Rules, the Facilitator can submit the claim for payment of fees to the respective Head of Office of the Trade Marks Registry who will follow the same procedure as mentioned above.

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Deficiency Memo

Deficiency Memo

If the applicant’s refund application contains some deficiency, the proper officer is required to communicate such deficiency by electronically issuing Form GST RFD-03. Form GST RFD-03 is also known as a deficiency memo. The said form is systematically explained in the current article.

Different forms for the application of refund under GST

In all, there are three major forms relevant for the application of the refund under Goods and Service Tax. The said forms and its brief understanding are tabulated below-

Relevant Forms Brief explanation
Form GST RFD-01 The person claiming refund of tax; interest; penalty and fees paid is required to file an applicant in Form GST RFD-01.
Form GST RFD-02 In case the application filed in Form GST RFD-01 is complete. Then, the proper officer is required to issue an acknowledgment in Form GST RFD-02. Such acknowledgment is to be issued within a period of 15 days from the date of filing of a refund application.
Form GST RFD-03 In case there is any deficiency in the application, the proper officer will issue a deficiency memo in Form GST RFD-03. Such a deficiency memo is to be issued within 15 days from the date of filing a refund application.

Legal provisions attached with Form GST RFD-03

As seen above, the applicant is required to file a refund application in Form GST RFD-01. The refund processing officer will review and scrutinize the refund application so filed. If the officer finds the refund application proper and complete, then within 15 days, the officer will issue an acknowledgment in Form GST RFD-02. Once the acknowledgment in Form GST RFD-02 is issued, subsequently, no deficiency memo can be issued for the same application.

However, if the refund processing officer will reviewing/ scrutinizing the application finds/ concludes that there is a deficiency in the refund application. Then, the officer will issue a deficiency memo.

Provisions of rule 90(3) of the Central Goods and Services Tax Rules, 2017 direct the refund processing officer to figure out and communicate the deficiency, if any, in the refund application filed by the person.

As per the rule, the proper officer is required to communicate the deficiency, electronically via the GST portal, in Form GST RFD-03.  The deficiency memo so issued in Form GST RFD-03 instructs the applicant to rectify the deficiency and file a new refund application.

Important points relating to the deficiency memo-

The applicant receiving the deficiency memo should note the following points-

  • After issuing the deficiency memo, the amount of input tax credit or cash, that is debited from the electronic credit ledger or the electronic cash ledger will be automatically re-credited to the respective accounts. Such re-credit will be auto-credited and doesn’t require an order in Form GST PMT-03.
  • The applicant is required to rectify the deficiency (pointed via Form GST RFD-03). After rectification, the applicant is required to file a new refund application in Form GST RFD-01. The new refund application will be allotted a new and distinct ARN.
  • Importantly, the new refund application so filed by the applicant in Form GST RFD-01 will be treated as a new application. Hence, such an application (post rectification of deficiency) is to be filed within a period of two years of the relevant date as per explanation (2) after section 54(14) of the Central Goods and Service Tax Act, 2017 (clarified vide Circular No. 125/44/2019- GST dated 18th November 2019).
  • It is important to note that the proper officer cannot issue/ serve another deficiency memo, covering the same period, until the deficiency pointed out in the earlier/ original deficiency memo is not rectified.

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Extension of Annual General Meeting 2020

Extension of Annual General Meeting 2020

Holding an Annual General Meeting is a yearly procedure to be followed by every company. However, practically, it is quite challenging to hold an AGM due to present COVID-19 pandemic. The present article tries to clear up the basic provisions relating to holding of an AGM, various clarifications issued by the ministry with regard to holding of AGM 2020 and procedure to the followed for applying for an extension of time for holding an AGM.

Basic provisions relating to holding of an Annual General Meeting

Section 96 of the Companies Act, 2013 covers the provisions relating to the Annual General Meeting (i.e., AGM). The gist of the provisions is summarized hereunder-

  • Every company is required to hold a general meeting in each year.
  • One person company is not required to hold the annual general meeting.
  • In the case of first AGM, it should be held within a period of nine months from the end of the first financial year. However, in any other case, the AGM should be held within a period of six months from the end of the financial year. Accordingly, the due date will be as under-
First AGM Any other case
AGM holding period for companies whose financial year ends on 31st December AGM holding period for companies whose financial year ends on 31st March AGM holding period for companies whose financial year ends on 31st December AGM holding period for companies whose financial year ends on 31st March
30th September 31st December 30th June 30th September

 Summing up various circulars already issued in the matter

  1. General Circular No. 18/2020 dated 21st April 2020-

The circular allows the companies, whose financial year ended as on 31st December 2019, to hold its AGM within a period of nine months from the end of the financial year. In nut-shell, the companies having the financial year ending on 31st December 2019 can hold their AGM on or before 30th September 2020.

  1. General Circular No. 20/2020 dated 5th May 2020-

The circular allows the companies to conduct the AGM via video conferencing or other audio visual means.

  1. General Circular No. 28/2020 dated 17th August 2020-

The circular clarifies that if the company, whose financial year ended as on 31st March 2020, is unable to hold its AGM via video conferencing or other audio visual means. Then, such companies can file their application for extension of time for holding of AGM by submitting Form No. GNL-1 on or before 29th September 2020.

Recent clarification on an extension of holding AGM

Recently, vide General Circular No. 28/2020 dated 17th August 2020, the Ministry of Corporate Affairs clarified on an extension of holding AGM for companies whose financial year ended as on 31st March 2020. The circular states as under-

  • Companies whose financial year ended as on 31st March 2020 are required to hold their AGM via video conference mode or any other mode as specified vide General Circular No. 20/2020 dated 5th May 2020.
  • However, in case such companies are not able to hold the AGM, then the companies are required to file an application seeking an extension of time for holding of an AGM in Form GNL-1. Such an application is to be filed on or before 29th September 2020.
  • Based on the application, the registrar can grant an extension for a maximum period of three months.

In short, the extension of the maximum period of three months for holding an AGM will be available, if both the below conditions are satisfied-

Condition No. 1 – the financial year of the company must be ended as on 31st March 2020; and

Condition No. 2 – the company is not able to hold the AGM via video conferencing or any other applicable mode.

Steps for applying for an extension of holding of AGM

The company needs to follow the below steps for applying for an extension of holding of AGM as per general circular no. 28/2020 dated 17th August 2020-

STEP 1 – Calling a Board Meeting approving the proposal of extension of AGM.

STEP 2 – Passing of the board’s resolution.

STEP 3 – Filing of an application in Form GNL-1 on or before 29th September 2020. A true copy of board resolution is to be attached with the application.

STEP 4 – Payment of fees. Applicable Fees for applying for an extension of AGM are tabulated hereunder-

Nominal Share Capital Applicable Fees
Less than INR 1,00,000 INR 200
INR 1,00,000 to INR 4,99,999 INR 300
INR 5,00,000 to INR 24,99,999 INR 400
INR 25,00,000 to INR 99,99,999 INR 500
INR 1,00,00,000 or more INR 600

On being satisfied, the registrar will issue a certificate allowing extension of a time period for holding an AGM.

Conclusion

  1. Companies whose financial year ended on 31st December 2019 – due date for holding AGM extended up to 30th September 2020.
  2. Companies whose financial year ended on 31st March 2020 and who are able to hold the AGM via video conferencing or any other specified mode – there is no due date extension.
  3. Companies whose financial year ended on 31st March 2020 and who are not able to hold the AGM via video conferencing or any other specified mode – maximum three months extension will be available by applying in Form No. GNL-1.

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Amendment to GST registration process

Amendment to GST registration process

Recently, the CBIC, i.e. Central Board of Indirect Taxes and Customs came up with notification no. 62/2020- Central Tax dated 20th August 2020. The notification introduced the Central Goods and Services Tax (Tenth Amendment) Rules, 2020. Vide the said notification, the Goods and Services Tax (GST) registration procedure is amended.

The effect of the notification vis-à-vis amendment in GST registration process is taken up and explained in the present article.

Briefing of amendments in GST registration rules

The notification has amended rules as listed hereunder-

Rule Relevant amendment
Rule 8(4A) substituted

·     The date of submission of GST registration application, in case the applicant opts for Aadhaar authentication, will be earlier of the following-

1.      Date of authentication of the Aadhaar number; or

2.      Fifteen days starting from the date of the filing of an application in Part B of Form GST REG-01.

The proviso to rule 9(1) substituted

The GST registration shall be granted to the applicant only after physical verification of the place of business if any of the below condition is satisfied-

1.      The applicant fails to undergo the authentication of the Aadhaar number; or

2.      The applicant doesn’t opt for authentication of the Aadhaar number.

New proviso inserted to rule 9(2)

The proper officer might issue a notice in Form GST REG-03 within a period of 21 days beginning from the date of the filing of an application if any of the below condition is satisfied-

1.      The applicant fails to undergo the authentication of the Aadhaar number; or

2.      The applicant doesn’t opt for authentication of the Aadhaar number.

Rule 9(5) substituted The GST registration application shall be deemed to have been approved under the following circumstances-

Cases The time limit within the GST registration shall be deemed to be approved
The applicant has successfully undergone the authentication of the Aadhaar number.

Three working days

(starting from the date of filing of an application).

The applicant fails to undergo the authentication of the Aadhaar number.

Twenty-one days

(starting from the date of filing of an application).

The applicant does not opt for the authentication of the Aadhaar number

Twenty-one days

(starting from the date of filing of an application).

It is important to note that all the above amendments are effective from 21st August 2020.

Corresponding amendment in GST registration process

With effect from 21st August 2020, the applicant willing to obtain GST registration is required to opt for authentication of the Aadhaar number.

Notably, the requirement of Aadhaar authentication is optional. However, in case the applicant either does not opt for authentication of Aadhaar number or fails to undergo the Aadhaar authentication, the physical verification of the place of the business of the applicant will be mandatory.

Based on the application, if required, the proper officer may issue a notice. But, such notice has to be issued within the following period-

Particulars Period within which notice is to be issued
The applicant has successfully undergone the Aadhaar authentication Three working days from the date of the submission of the application.
Any other case Twenty-one working days from the date of the submission of the application.

On receiving the notice, the applicant is required to reply the same within a period of 7 days from the date of receipt of the notice.

Steps for undertaking the authentication of the Aadhaar number

The authentication of the Aadhaar number can easily be made by following the below steps-

  • On submission of the GST registration application, a verification link will be received on the registered mobile number and e-mail id,
  • Link the verification link,
  • Enter the Aadhaar number,
  • An OTP will be received on the mobile number linked with the Aadhaar,
  • Enter the OTP.

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