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In this edition, we will be seeing about Quarterly Return, Monthly Payment of Taxes (QRMP) Scheme at GST. We will have our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST following the article.

 CS Saranya Deivasigamani,

CEO

QRMP Scheme

Quarterly Return, Monthly Payment of Taxes (QRMP) Scheme is a scheme to simplify compliance for small taxpayers. Under this scheme, taxpayers having an aggregate turnover at PAN level up to Rs. 5 crore can opt for quarterly GSTR-1 and GSTR-3B filing. Payment can be made in the first two months by a simple challan in FORM GST PMT-06. For the ease of taxpayers, system has assigned quarterly frequency to small taxpayers automatically.

Eligibility

For the purpose of determining the eligibility for QRMP, the turnover was determined on the basis of the values declared by taxpayers in Table-3.1 of GSTR-3B (except inward supplies attracting reverse charge) for the Financial Year 2019-20. If a component of the turnover, like exempted or non-GST turnover, was not declared by a taxpayer in GSTR-3B or was declared in next financial year, then the turnover computed by the system for such taxpayers could be less than Rs. 5 crore. Such taxpayers may have been assigned to QRMP on the basis of values declared by them in GSTR-3B. Such taxpayers are advised to opt-out of scheme for quarter Apr-Jun’21 by 30 th April 2021.

For the quarter of April to June 2021, taxpayers may change their filing frequency from quarterly to monthly from 1st February, 2021 to 30 th April, 2021. It may be noted that profile selection is not a recurring requirement every quarter. Once a frequency has been opted for, it is applicable for all future periods unless changed further.

IFF

Invoice Furnishing Facility (IFF) is an optional facility made available as per Rule-59(2) of the CGST Rules, 2017. This is provided for those quarterly taxpayers who want to pass on input tax credit (ITC) to their recipients (buyers/customers) in first two months of a quarter. Since IFF is an optional facility, it poses no additional compliance burden. It is a facility for those quarterly filers who intend to pass ITC to their recipients in first two months of the quarter. Since IFF is an optional facility, IFF for a month will expire after the due date of 13th of next month, and cannot be filed after this date.

Invoice Furnishing Facility (IFF) shall be availed by those taxpayers who want to pass on input tax credit (ITC) to their recipients (buyers/customers) in first two months of a quarter. Those taxpayers who do not have to pass credit to their recipients need not file IFF in the first two months of the quarter. They may declare their outward supplies in the quarterly FORM GSTR-1. It may be noted that since IFF is an optional facility, IFF for a month will expire after the due date of 13th of next month, and cannot be filed after this date.

Payment of Liability

In first two months of the quarter, payment of liability can be made by either of the following two methods:

1. Fixed Sum Method: Portal will generate a pre-filled challan in Form GST PMT-06. The system generated pre-filled challan in this case is commonly also known as 35% challan.
2. Self-Assessment Method: The actual tax due is to be paid through challan, in Form GST PMT-06, by considering the tax liability on inward and outward supplies and the input tax credit available for the period as per law.

The due date for making payment by challan is 25th of the next month.

Fixed Sum Method

In fixed sum method, the taxpayer is required to pay a system generated challan in the first two months of a quarter. The system generated pre-filled challan in this case is commonly also known as 35% challan. If fixed sum method is opted for by the taxpayer & there is no ITC to be passed in that month, then except for paying system generated challan, no other compliance requirement is there in the first two months of the quarter.

Supplies made to unregistered persons (also called B2C supplies) are not required to be declared in IFF. These may be declared in FORM GSTR-1 for the quarter.

Reconciliation of IIF and GSTR-1

Taxpayers will be provided with a draft GSTR-3B, which will contain the details of the liability to be paid by taxpayers in the quarterly GSTR-3B. This will be prepared on the basis of the supplies declared in FORM GSTR-1 for the quarter. It will also contain data from the optional IFF, if any is filed in either of the first two months of the quarter. The said system computed values will also be auto-populated in quarterly GSTR-3B.

Claiming ITC

In first two months of the quarter, no declaration pertaining to ITC is required to be made. The available ITC for the entire quarter will be made available by the system in quarterly FORM GSTR-2B.

This quarterly facility will be in addition to the FORM GSTR-2B being made available on monthly basis, which can still be used for doing self-assessment.

Due Dates

The due dates are critical for claiming ITC or changing the frequency of the return which shall be planned accordingly.

Filing frequency either monthly or quarterly can be selected as per timelines mentioned in below table.

Legal Terms

Cestui Que Trust

n. an old-fashioned expression for the beneficiary of a trust.

MCA Updates

• Commencement notification dated 05 March 2021.
• Companies (Incorporation) Third Amendment Rules, 2021.
• Companies (Management and Administration) Amendment Rules, 2021.
• Companies (Specification and definitions details) 2nd Amendment Rules 2021.
• Companies (Incorporation) 2nd Amendment Rules 2021.
• Companies (Specification of Definition details) Amendment Rules 2021.

SEBI Updates

• Review of norms regarding investment in debt instruments with special features, and the valuation of perpetual bonds.
• Rollout of Legal Entity Template.
• Amendments to provisions in SEBI Circular dated September 16, 2016 on Unique Client Code (UCC) and mandatory requirement of Permanent Account Number (PAN).
• Circular on Guidelines for votes cast by Mutual Funds.
• Circular on Mutual Funds.
• Code of Conduct & Institutional mechanism for prevention of Fraud or Market Abuse.
• Master Circular on Surveillance of Securities Market.
• Extension of facility for conducting meeting(s) of unitholders of REITs and InvITs through Video Conferencing (VC) or through other audio-visual means (OAVM).
• Pre-Expiry Margin on commodities under Alternate Risk Management Framework.

RBI Updates

• Extension of Cheque Truncation System (CTS) across all bank branches in the country.
• Data Format for Furnishing of Credit Information to Credit Information Companies and other Regulatory Measures.
• Investment by Foreign Portfolio Investors (FPI) in Defaulted Bonds – Relaxations.
• Master Direction on Digital Payment Security Controls.

IT Updates

• Amendment of Rule 114E of the Income tax Rules, 1962.
• ​Income-tax (3rd Amendment) Rules, 2021.
• Notification No. 14/2021 [F. No. 187/7/2021 (ITA-I)] / SO 1160(E).
• Income-tax (2nd Amendment) Rules, 2021.
• Notification No. 12 /2021 [F. No. 203/13/2019/ITA-II] / SO 1069(E).
• Income-tax (1st Amendment) Rules, 2021.
• Notification No. 10/2021 [F. No. 370142/35/2020-TPL] / S.O. 966(E).
• ​Amendment of notification no. 85 of 2020 for extension of date in Direct Tax Vivad se Vishwas Act, 2020.
• Notification No. 8/2021 [F.No.300196/35/2019-ITA-I] / SO 813(E).
• Notification No. 7/2021 [F. No. 370149/154/2019-TPL] / SO 742(E).
• ​Faceless Assessment (1st Amendment) Scheme, 2021.

GST Updates

• GSTN Webinar on e-invoicing for taxpayers.
• Module wise new functionalities deployed on the GST Portal for taxpayers.
• Advisory on Annual Return (GSTR-9).
• Advisory on Reconciliation Statement (GSTR-9C ).
• Know more about “QRMP scheme and how to furnish details in IFF” and Answers to Frequently Asked Questions.

Quality in Business

CEO of Zappy has achieved India 5000 Women Achiever Awards, 2020 and Zappy have received Quality in Business Certificate by the International Trade Council. Try Zappy Compliance a new way of Compliance Calendar that will help you maintain Statutory Registers, Minutes Books and other Repositories online at ease in a safe and secure way.

In this edition, we will be seeing about Director-related Loans by Urban Co-operative Banks (UCBs) Guidance issued by RBI. We will have our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST following the article.

 CS Saranya Deivasigamani,

CEO

DIRECTOR-RELATED LOANS BY UCBs

The Banking Regulation Act, 1949 (“the Act”) has been amended by the Banking Regulation (Amendment) Act, 2020 notified for the Primary (Urban) Co-operative Banks (UCBs) on September 29, 2020 and deemed to have been effective from June 29, 2020. Consequently, section 20 of the principal Act has become applicable to UCBs. Keeping in view the above, the extant directions on the subject issued to UCBs have been reviewed and the revised directions are issued as under.

UCBs shall not make, provide or renew any loans and advances or extend any other financial accommodation to or on behalf of their directors or their relatives, or to the firms / companies / concerns in which the directors or their relatives are interested (collectively called as “director-related loans”). Further, the directors or their relatives or the firms / companies / concerns in which the directors or their relatives are interested shall also not stand as surety/guarantor to the loans and advances or any other financial accommodation sanctioned by UCBs. ‘Advances’ for the purpose shall include all types of funded / working capital limits such as cash credits, overdrafts, credit cards, etc.

The following categories of director-related loans shall, however, be excluded from “loans and advances” for the purpose of these directions:

Regular employee-related loans to staff directors, if any, on the Boards of UCBs;

Normal loans, as applicable to members, to the directors on the Boards of Salary Earners’ UCBs;

Normal employee-related loans to Managing Directors / Chief Executive Officers of UCBs;

Loans to directors or their relatives against Government Securities, Fixed Deposits and Life Insurance Policies standing in their own name.

Explanation: For the purpose of these directions –

The term ‘any other financial accommodation’ shall include funded and non-funded credit limits and underwritings and similar commitments, as under:

The funded limits shall include loans and advances by way of bill/cheque purchase/ discounting, pre-shipment and post-shipment credit facilities and deferred payment guarantee limits extended for any purpose including purchase of capital equipment and acceptance limits in connection therewith sanctioned to borrowers, and guarantees by issue of which a bank undertakes financial obligation to enable its constituents to acquire capital assets. It shall also include investments which are in the nature of / in lieu of credit.

The non-funded limits shall include letters of credit, guarantees other than those referred to in paragraph (a) above, underwritings and similar commitments. It shall also include off-balance sheet exposure in the form of derivatives.

The word “relative” shall have the meaning as under:

A person shall be deemed to be a relative of another, if and only if:-

a) They are members of a Hindu Undivided Family; or

b) They are husband and wife; or

c) The one is related to the other (or vice-versa) in the manner indicated below:

• Father (including step-father)
• Mother (including step-mother)
• Son (including step-son)
• Son’s wife
• Daughter (including step-daughter)
• Daughter’s husband
• Brother (including step-brother)
• Brother’s wife
• Sister (including step-sister)
• Sister’s husband

iii. The word “interested” shall mean the director of the UCB or his relative, as the case may be, being a director, managing agent, manager, employee, proprietor, partner, coparcener or guarantor, as the case may be, of the firm / company / concern (including HUF):

Provided that a director of a UCB or his relative shall also be deemed to be interested in a company, being the subsidiary or holding company, if he/she is a director, managing agent, manager, employee or guarantor of the respective holding or subsidiary company:

Provided further that a director of a UCB shall also be deemed to be interested in a company/firm if he/she holds substantial interest in or is in control of the company/firm or in a company, being the subsidiary or holding company, if he/she holds substantial interest in or is in control of the respective holding or subsidiary company:

Provided further that a relative of a director of a UCB shall also be deemed to be interested in a company/firm if he/she is a major shareholder or is in control of the company/firm or in a company, being the subsidiary or holding company, if he/she is a major shareholder or is in control of the respective holding or subsidiary company:

The term “substantial interest” shall have the same meaning as assigned to it in section 5(ne) of the Banking Regulation Act, 1949.

The term “control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in another manner.

The term “major shareholder” shall mean a person holding 10% or more of the paid up share capital.

UCBs shall submit information pertaining to their director-related loans as at the end of each quarter (i.e. Mar 31, Jun 30, Sep 30 and Dec 31), in the format given in the Annex to these directions, to the concerned Regional Office of Department of Supervision of Reserve Bank of India within fifteen days from the end of the respective quarter. In the case of UCBs functioning under Administrator(s) / Person(s)-in-Charge / Special Officers, the UCBs concerned should submit the information in respect of loans and advances availed by the Administrator(s) / Person(s)-in-Charge / Special Officers, including their relatives.

These directions supersede the earlier directives / instructions issued on the subject and shall come into force on Feb 5, 2021. The existing director-related loans sanctioned/granted by UCBs prior to Feb 5, 2021, if any, may continue till their respective maturity and shall not be renewed further.

Legal Terms

Acquiesce

To accept without protest; to give implied consent by silence.

MCA Updates

• Companies (Incorporation) 2nd Amendment Rules 2021.
• Companies (Specification of Definition details) Amendment Rules 2021
• Companies (compromises, arrangements and amalgamations) Amendment Rules 2021
• Companies (CSR Policy) Amendment Rules, 2021

SEBI Updates

• Revised disclosure formats under Regulation 7 of SEBI (Prohibition of Insider Trading) Regulations, 2015.
• Master Circular for Depositories.
• Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2021.
• Revised Framework for Innovation Sandbox.
• Setting up of Limited Purpose Clearing Corporation (LPCC) by Asset Management Companies (AMCs) of Mutual Funds.
• Circular on Revision of Monthly Cumulative Report.
• Securities and Exchange Board of India (Intermediaries) (Amendment) Regulations, 2021.
• Corrigendum to the Securities and Exchange Board of India (Investment Advisers) (Amendment) Regulations, 2021.
• Relaxations relating to procedural matters – Issues and Listing.

RBI Updates

• Margin for Derivative Contracts.
• Investment in NBFCs from FATF non-compliant jurisdictions.
• Basel III Framework on Liquidity Standards – Net Stable Funding Ratio (NSFR).
• Basel III Capital Regulations- Review of transitional arrangements.
• Loans and advances to directors, their relatives, and firms / concerns in which they are interested.
• Risk-Based Internal Audit (RBIA).
• Strengthening of Grievance Redress Mechanism in Banks.

IT Updates

• Procedure, Formats and Standards of issue of Permanent Account Number (IPAN).
• Notification No. 04/2021/ F.No. IT(A)/01/2020-TPL / S.O. 471(E).

GST Updates

• Advisory on Reconciliation Statement (GSTR-9C ).
• Know more about “QRMP scheme and how to furnish details in IFF” and Answers to Frequently Asked Questions.
• Due dates for filing of Form GSTR-3B from the Tax Period of January, 2021.
• Webinar on furnishing of details in IFF and payment of tax (Form GST PMT-06) by Taxpayers in QRMP Scheme.
• Payment of Tax by Fixed Sum Method under QRMP Scheme.
• Auto-population of e-invoice details into GSTR-1.
• Module wise new functionalities deployed on the GST Portal for taxpayers.