Crypto Assets are borderless, require international collaboration to prevent regulatory arbitrage
Under PMLA, Rs. 936 crore related to crypto currency is attached/seized/freezed by ED as on 31.01.2023
Posted Date:- Feb 06, 2023
Crypto Assets are by definition borderless and require international collaboration to prevent regulatory arbitrage. This was stated by the Union Minister of State for Finance, Shri Pankaj Chaudhary, in a written reply to a question in Lok Sabha today.
Therefore, the Minister stated, any legislation for regulation or for banning can be effective only with significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.
The Minister stated that the Directorate of Enforcement is investigating several cases related to crypto currency frauds wherein a few crypto exchanges have also been found involved in money laundering. Necessary action as per provisions of Prevention of Monyt Laundering Act, 2002 (PMLA) has been taken by the Directorate of Enforcement. As on 31.01.2023, proceeds of crime amounting to Rs. 936 crore have been attached/seized/freezed, 05 persons have been arrested and 06 prosecution complaints (PCs) including 01 supplementary PC have been filed before the Special Court, PMLA in these cases.
Further, the Minister stated, under Foreign Exchange Management Act, 1999 (FEMA) assets amounting to Rs. 289.28 crore have been seized under section 37A of FEMA and 01 Show Cause Notice to cryptocurrency exchange Zanmai Labs Pvt Ltd, known as WazirX and its directors under FEMA for transactions involving cryptocurrencies work Rs. 2,790 crore has also been issued.
Giving more information, the Minister staetd that RBI has been cautioning users, holders and traders of Virtual Currencies (VCs) vide public notices on December 24, 2013, February 01, 2017 and December 05, 2017 that dealing in VCs is associated with potential economic, financial, operational, legal, customer protection and security related risks. RBI, vide its circular dated May 31, 2021 has also advised its regulated entities to continue to carry out customer due diligence processes for transactions in VCs, in line with regulations governing standards for Know Your Customer (KYC), Anti- Money Laundering (AML), Combating of Financing of Terrorism (CFT), obligations under Prevention of Money Laundering Act (PMLA), 2002, etc. in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.
The Reserve Bank of India (RBI) has furnished the list of Digital Lending Apps (DLAs) being used by Regulated Entities (REs) of RBI to the Ministry of Electronics & Information Technology (MeitY), which in turn, has shared the list with respective intermediary (App Stores) and requested them to ensure that only the apps figuring in the list are hosted on their app stores. This was stated by Union Minister of State for Finance Dr Bhagwat Kisanrao Karad in a written reply to a question in Rajya Sabha today.
Giving information on addressing the issue of money laundering through illegal loan apps, the Minister stated that the Directorate of Enforcement (ED) has been entrusted to curb money laundering under the provisions of PML Act, 2002. ED has initiated investigation under PMLA in several cases where the proceeds of crime has been generated and acquired by accused persons/entities through illegal loan apps, the Minister stated.
In these cases, the Minister stated that as on date, proceeds of crime of Rs. 2,116 crore (approx) has been identified, out of which proceeds of crime amounting to Rs. 859.15 crore have been attached / seized / freezed under the provisions of PMLA. Further, assets amounting to Rs. 289.28 crores have been seized under section 37A of Foreign Exchange Management Act, 1999.
Giving more information, the Minister stated that the RBI has issued master circular on Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards/Combating Financing of Terrorism (CFT)/Obligation of banks and financial institutions under Prevention of Money Laundering Act (PMLA), 2002. Under this circular, banks and financial institutions have been advised to follow certain customer identification procedure for opening of accounts and monitoring of transactions of suspicious nature to avoid its misuse for money laundering and reporting the same to appropriate authority, the Minister stated.
The Minister further stated that RBI has issued digital lending guidelines dated 2.9.2022 which advises measures including, inter alia, due diligence of Loan Service Providers (LSPs), direct disbursal of loan from bank account of lender to bank account of the borrower without any pass-through/pool or third-party account to avoid layering, publishing of the list of DLAs, LSPs engaged by REs and details of activities to avoid anonymity.
The draft scheme has been framed in accordance with the announcement made by the Union Finance Minister in the Union Budget 2023-24. In Para 67 of the Union Budget Speech, Smt. Nirmala Sitharaman had announced that:
To settle contractual disputes of government and government undertakings, wherein arbitral award is under challenge in a court, a voluntary settlement scheme with standardized terms will be introduced. This will be done by offering graded settlement terms depending on pendency level of the dispute.
The Government has appreciated that special efforts are required to clear the backlog of old disputes and litigation. Such cases are not only holding back fresh investment but are also reducing the ease of doing business with the Government. Therefore, after due study of the past cases, the government intends to bring one time settlement scheme called “Vivad se Vishwas II (Contractual Disputes)” to effectively settle pending disputes.
The salient features of the proposed scheme are as under:
The scheme will apply to disputes where one of the parties is either the Government of India or its following bodies: All Autonomous Bodies of the Government of India; Public sector banks and public sector financial institutions; All Central Public Sector Enterprises; Union Territories, National Capital Territory of Delhi and all agencies/ undertakings thereof; and All organisations, where Central Government like Metro Corporations, where Government of India has shareholding of 50%; however, these bodies can opt out of the scheme at their discretion, with approval of the Board of Directors. Only disputes involving above entities where the claim for proceedings (either to Court or for Arbitration or Conciliation) were submitted by the contractor on or before 30.09.2022 and Arbitral Tribunal/ Committee for Conciliation etc. for the specific case has been already notified by the procuring entity shall be eligible for settlement through this scheme. Disputes, where claims are raised against procuring entities as above along with some other party (State Government or private party), shall not be eligible under the scheme. Disputes having only financial claims against the procuring entities will be settled through this scheme. The Scheme will be applicable to all contractors/ suppliers who wish to participate. In case Central Public Sector Enterprises (CPSEs) etc. are the contractors/ suppliers in a particular contract, they are also eligible to submit their claims under the scheme. The Scheme proposes a graded settlement terms depending on pendency level of the dispute. It is proposed to cover only for cases involving domestic arbitration and cases under international arbitration are not eligible to be settled under this scheme. The scheme will be implemented through Government e-Marketplace (GeM), which shall provide an online functionality for the same. The draft scheme document also provides a broad functionality that the GeM portal shall provide to implement the scheme.
The draft scheme also contains a draft settlement agreement between the litigating parties to bring finality to the contractual dispute settlement.
As per Section 2(5) of the Companies Act, 2013 “articles” means the articles of association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or of this Act;
By-laws or rules and regulations which govern the management of its internal affairs and the conduct of its business.
Company can alter its AOA by way of addition, deletion, modification, substitution, or combination of them.
They are framed with the object of carrying out the aims and objects as set out in the Memorandum of Association.
Section 14 of the Companies Act, 2013
14. Alteration of Articles
(1) Subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of–(a) a private company into a public company; or(b) a public company into a private company:
Provided that where a company being a private company alters its articles in such a manner that they no longer include the restrictions and limitations which are required to be included in the articles of a private company under this Act, the company shall, as from the date of such alteration, cease to be a private company:
[Provided further that any alteration having the effect of conversion of a public company into a private company shall not be valid unless it is approved by an order of the Central Government on an application made in such form and manner as may be prescribed:Provided also that any application pending before the Tribunal, as on the date of commencement of the Companies (Amendment) Ordinance, , shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement.]]]*
(2) Every alteration of the articles under this section and a copy of the order of the [Central Government]] Tribunal approving the alteration as per sub-section (1) shall be filed with the Registrar (INC -27), together with a printed copy of the altered articles, within a period of fifteen days in such manner as may be prescribed, who shall register the same.(3) Any alteration of the articles registered under sub-section (2) shall, subject to the provisions of this Act, be valid as if it were originally in the articles.
Notice of Board Meeting :
Issue notice in writing to every director
The notice must be a seven day notice.
The notice must contain time, date and venue for the meeting and detailed agenda of the business, Notes to agenda & draft resolution.
(As per section 173 and SS-1)
2. Hold Board Meeting
Consider and decide which of the articles are to be altered and pass a formal resolution in this respect (Refer Draft resolution).
Approve notice, agenda and explanatory statement to be annexed to the notice of the general meeting as per 102 of the Act (Refer Draft resolution & Explanatory statement).
Authorize the Company Secretary or any other competent officer of the company to issue notice of the general meeting as approved by the Board.
3. Notice of General Meeting:
Issue notice of the general meeting to all the members of the company, its directors and the auditors (Section 101).
.4.Hold the general meeting
Check the Quorum;
Check whether auditor is present, if not. Then Leave of absence is Granted or Not. (Section- 146) and
Pass the proposed special resolution.[Section-114(2)],
Approval of Alteration in AOA.
5. File with the ROC, Form MGT – 14 within 30 days
File with the ROC, Form MGT – 14 along with a certified copy of the special resolution and the explanatory statement annexed to the notice of the general meeting at which the resolution was passed and a copy of the Articles of Association, within 30 days of the passing of the resolution along with the prescribed filing fee.
6. File with the ROC, Form INC-27 within 15 days
Every alteration of the articles under this section and a copy of the order of the [Central Government]] Tribunal approving the alteration as per sub-section (1) shall be filed with the Registrar (INC -27), together with a printed copy of the altered articles, within a period of fifteen days in such manner as may be prescribed, who shall register the same.
7. Make necessary changes in all the copies of the articles of association of the company lying in the office of the company.
For Listed Company:
Sendcopiesofthenoticetoeachstockexchange where the securities of the company are listed within 24 hour of the occurrence of event [Refer Regulation 30(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]. A general notice of the general meeting may also be published in newspapers.
Intimate stockexchange about alterations in memorandum and articles of the company within 24 hours of the occurrence of event. [Refer Regulation 30(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]
Send to each stock exchanges, a copy of the proceedings of the general meeting in case of a listed company within 24 hour of the occurrence of event [Refer Regulation 30(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015].
Draft Agenda, proposal, resolution of Board Meeting, Minutes – Gist of Discussion
Agenda Title: To amend Articles of Association of the Company
An amendment to the AOA of the Company is required in view of __________. A detailed proposal is placed before the Board for the same.
The Board members may discuss and approve the following resolution.
“Resolved that subject to the provisions of Section 14 and other applicable provisions, if any, of the Companies Act, 2013 and subject to the approval of the members at the General Meeting, the Articles of Association of the Company be and hereby amended by inclusion of the following clause at__________________.
Resolved further that an Extraordinary General Meeting of the members of the Company be called and held at _______ on _________ day of_________at ___________ as per the draft notice and explanatory statement placed before the meeting duly initiated by the Chairperson for the purpose of identification.
Resolved further that the draft notice of Extraordinary General Meeting be and is hereby approved and the Company Secretary and the Directors be and are hereby authorized severally to issue the said notice to the members and others who are entitled for the same, and take all necessary action in this regard.
Resolved further that Directors and the Company Secretary of the Company be and are hereby authorized severally to file necessary e-forms with the Registrar of Companies, __________, in applicable e-Forms and to do all such acts, deeds and things as may be necessary to give effect to the above resolution.”
Minutes – Gist of Discussion
The Board discussed the proposal to amend the Articles of Association of the Company in view of ____________, a copy of which was tabled at the meeting for approval. The following resolution was approved.
Draft Agenda, Explanatory Statement, proposal, resolution of General Meeting, Minutes – Gist of Discussion
Agenda Title: Amendment to Articles of Association
To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:
“Resolved that pursuant to Section 14 of the Companies Act, 2013, the Articles of Association of the Company be and is hereby altered as below:________________.
Resolved further that the Board of Directors and Company Secretary be and are hereby severally authorised to sign all such forms and returns and other documents and to do all such acts, deeds and things as may be necessary to give effect to the aforesaid resolution.”
Minutes – Gist of Discussion
Proposed by _________________, seconded by ___________ Resolution passed unanimously/ by majority / rejected.
The Board of Directors of the Company at its meeting held on DD/MM/YYYY_ recommended that the existing Article of Association be altered with the text as set out in the resolution. Consent of the Members by way of Special Resolution is required for such alteration of Articles of Association in terms of the provisions of Section 14 of the Act.
None of the Directors and Key Managerial Personnel of the Company, or their relatives, is interested in this Special Resolution.
The Board recommends this Special Resolution for your approval.
In our continuous endeavour to serve you better, the Ministry of Corporate Affairs is launching Second set of Company Forms covering 56 forms in two different lots on MCA21 V3 portal.
10 out of 56 forms will be launched on 09th January 2023 at 12:00 AM and the remaining 46 forms on 23rd January 2023.
Following forms will be rolled-out on 09th January 2023:
SPICe+ PART A, SPICe+ PART B, RUN, AGILE PRO-S, INC-33, INC-34, INC-13, INC-31, INC-9 and URC-1.
46 forms which will be rolled-out on 23rd January 2023 ( List given).
To facilitate implementation of these forms in V3 MCA21 portal, stakeholders are advised to note the following points:
(1) Company e-Filings on V2 portal will be disabled from 07th January 2023 12:00 AM to 08th January 2023 11:59 pm for 10 forms which are planned for roll-out on 09th January 2023.
(2) Company e-Filings on V2 portal will be disabled from 07th January 2023 12:00 AM to 22nd January 2023 11:59 pm for 46 forms which are planned for roll-out on 23rd January 2023.
(3) All stakeholders are advised to ensure that there are no SRNs in pending payment and Resubmission status.
(4) Offline payments for the above 56 forms in V2 using Pay later option would be stopped from 28th December 2022 12:00 AM. You are requested to make payments for these forms in V2 through online mode (Credit/Debit Card and Net Banking).
(5) In view of the upcoming launch of 56 Company forms, V3 portal will not be available from 07th January 2023 12:00 AM to 08th Jan 2023 11:59 pm due to 10 company forms roll-out and from 21st January 2023 to 22nd January 2023 for 46 company forms roll-out.
(6) V2 Portal for company filing will remain available for all the forms excluding above mentioned 56 forms.
GST Council recommends to decriminalise certain offences u/s 132, increase in threshold of amount of tax for prosecution and reduction in amount of compounding in GST.
The 48th GST Council met under the Chairmanship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman via virtual mode in New Delhi today. The meeting was also attended by Union Minister of State for Finance Shri Pankaj Choudhary besides Finance Ministers of States & UTs (with legislature) and senior officers of the Ministry of Finance & States/ UTs.
1. The GST Council has inter-alia made the following recommendations relating to changes in GST tax rates, measures for facilitation of trade and measures for streamlining compliances in GST:
2. It was also decided to include supply of Mentha arvensis under reverse charge mechanism as has been done for Mentha Oil.
3 It was decided to clarify that: Rab (rab-salawat) is classifiable under CTH 1702 which attracts GST at the rate of 18%. fryums manufactured using the process of extrusion is specifically covered under CTH 19059030 and attract GST at the rate of 18%. The higher rate of compensation cess of 22% is applicable to motor vehicle fulfilling all four conditions, namely, it is popularly known as SUV, has engine capacity exceeding 1500 cc, length exceeding 4000 mm and a ground clearance of 170 mm or above goods falling in lower rate category of 5% under schedule I of notification No. 1/2017-CTR imported for petroleum operations will attract lower rate of 5% and the rate of 12% shall be applicable only if the general rate is more than 12%
4 As a relief measure, the Council decided to regularise the intervening period starting from the date of issuance of Circular (3.08.2022) in respect of GST on ‘husk of pulses including chilka and concentrates including chuni/churi, khanda’ on “ as is basis” on account of genuine doubts.
5. No GST is payable where the residential dwelling is rented to a registered person if it is rented it in his/her personal capacity for use as his/her own residence and on his own account and not on account of his business.
6. Incentive paid to banks by Central Government under the scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions are in the nature of subsidy and thus not taxable
Measures for facilitation of trade
1. Decriminalization under GST: The Council has recommended to – raise the minimum threshold of tax amount for launching prosecution under GST from Rs. One Crore to Rs. Two Crores, except for the offence of issuance of invoices without supply of goods or services or both; reduce the compounding amount from the present range of 50% to 150% of tax amount to the range of 25% to 100%; decriminalize certain offences specified under clause (g), (j) and (k) of sub-section (1) of section 132 of CGST Act, 2017, viz.- obstruction or preventing any officer in discharge of his duties; deliberate tempering of material evidence; failure to supply the information.
2. Refund to unregistered persons: There is no procedure for claim of refund of tax borne by the unregistered buyers in cases where the contract/ agreement for supply of services, like construction of flat/house and long-term insurance policy, is cancelled and the time period of issuance of credit note by the concerned supplier is over. The Council recommended amendment in CGST Rules, 2017, along with issuance of a circular, to prescribe the procedure for filing application of refund by the unregistered buyers in such cases.
3. Facilitate e-commerce for micro enterprises: GST Council in its 47th meeting had granted in-principle approval for allowing unregistered suppliers and composition taxpayers to make intra-state supply of goods through E-Commerce Operators (ECOs), subject to certain conditions. The Council approved the amendments in the GST Act and GST Rules, along with issuance of relevant notifications, to enable the same. Further, considering the time required for development of the requisite functionality on the portal as well as for providing sufficient time for preparedness by the ECOs, Council has recommended that the scheme may be implemented w.e.f. 01.10.2023.
4. Paras 7, 8(a) and 8(b) were inserted in Schedule III of CGST Act, 2017 with effect from 01.02.2019 to keep certain transactions/ activities, such as supplies of goods from a place outside the taxable territory to another place outside the taxable territory, high sea sales and supply of warehoused goods before their home clearance, outside the purview of GST. In order to remove the doubts and ambiguities regarding taxability of such transactions/ activities during the period 01.07.2017 to 31.01.2019, the Council has recommended to make the said paras effective from 01.07.2017. However, no refund of tax paid shall be available in cases where any tax has already been paid in respect of such transactions/ activities during the period 01.07.2017 to 31.01.2019.
5. The Council has recommended to amend sub-rule (1) of rule 37 of CGST Rules, 2017 retrospectively with effect from 01.10.2022 to provide for reversal of input tax credit, in terms of second proviso to section 16 of CGST Act, only proportionate to the amount not paid to the supplier vis a vis the value of the supply, including tax payable.
6. The Council recommended to insert Rule 37A in CGST Rules, 2017 to prescribe the mechanism for reversal of input tax credit by a registered person in the event of non-payment of tax by the supplier by a specified date and mechanism for re-availment of such credit, if the supplier pays tax subsequently. This would ease the process for complying with the condition for availment of input tax credit under section 16(2)(c) of CGST Act, 2017.
7. Sub-rule (3) of rule 108 and rule 109 of the CGST Rules, 2017 to be amended to provide clarity on the requirement of submission of certified copy of the order appealed against and the issuance of final acknowledgment by the appellate authority. This would facilitate timely processing of appeals and ease the compliance burden for the appellants.
8. Rule 109C and FORM GST APL-01/03 W to be inserted in the CGST Rules, 2017 to provide the facility for withdrawal of an application of appeal up to certain specified stage. This would help in reducing litigations at the level of appellate authorities.
9. Circular to be issued to clarify that No Claim Bonus offered by the insurance companies to the insured is an admissible deduction for valuation of insurance services.
10. Circular to be issued for clarifying the issue of treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalised under Insolvency and Bankruptcy Code, 2016. Rule 161 of CGST Rules, 2017 and FORM GST DRC-25 also to be amended for facilitating the same.
11. Sub-rule (3) of rule 12 of CGST Rules, 2017 to be amended to provide for facility to the registered persons, who are required to collect tax at source under section 52 or deduct tax at source under section 51 of CGST Act, 2017, for cancellation of their registration on their request.
12. Circular to be issued for clarifying the issues pertaining to the place of supply of services of transportation of goods in terms of the proviso to sub-section (8) of section 12 of the IGST Act, 2017 and availability of input tax credit to the recipient of such supply. It has also been recommended that proviso to sub-section (8) of section 12 of the IGST Act, 2017 may be omitted.
13. Issuance of the following circulars in order to remove ambiguity and legal disputes on various issues, thus benefiting taxpayers at large:
Procedure for verification of input tax credit in cases involving difference in input tax credit availed in FORM GSTR-3B vis a vis that available as per FORM GSTR-2A during FY 2017-18 and 2018-19.
Clarifying the manner of re-determination of demand in terms of sub-section (2) of section 75 of CGST Act, 2017.
Clarification in respect of applicability of e-invoicing with respect to an entity
Measures for streamlining compliances in GST
14. Proposal to conduct a pilot in State of Gujarat for Biometric-based Aadhaar authentication and risk-based physical verification of registration applicants. Amendment in rule 8 and rule 9 of CGST Rules, 2017 to be made to facilitate the same. This will help in tackling the menace of fake and fraudulent registrations.
15. PAN-linked mobile number and e-mail address (fetched from CBDT database) to be captured and recorded in FORM GST REG-01 and OTP-based verification to be conducted at the time of registration on such PAN-linked mobile number and email address to restrict misuse of PAN of a person by unscrupulous elements without knowledge of the said PAN-holder.
16. Section 37, 39, 44 and 52 of CGST Act, 2017 to be amended to restrict filing of returns/ statements to a maximum period of three years from the due date of filing of the relevant return / statement.
17. FORM GSTR-1 to be amended to provide for reporting of details of supplies made through ECOs, covered under section 52 and section 9(5) of CGST Act, 2017, by the supplier and reporting by the ECO in respect of supplies made under section 9(5) of CGST Act, 2017.
18. Rule 88C and FORM GST DRC-01B to be inserted in CGST Rules, 2017 for intimation to the taxpayer, by the common portal, about the difference between liability reported by the taxpayer in FORM GSTR-1 and in FORM GSTR-3B for a tax period, where such difference exceeds a specified amount and/ or percentage, for enabling the taxpayer to either pay the differential liability or explain the difference. Further, clause (d) to be inserted in sub-rule (6) of rule 59 of CGST Rules, 2017 to restrict furnishing of FORM GSTR-1 for a subsequent tax period if the taxpayer has neither deposited the amount specified in the intimation nor has furnished a reply explaining the reasons for the amount remaining unpaid. This would facilitate taxpayers to pay/ explain the reason for the difference in such liabilities reported by them, without intervention of the tax officers.
19. Amendment in definition of “non-taxable online recipient” under section 2(16) of IGST Act, 2017 and definition of “Online Information and Database Access or Retrieval Services (OIDAR)” under section 2(17) of IGST Act, 2017 so as to reduce interpretation issues and litigation on taxation of OIDAR Services.
“Private Company” means a company having a minimum paid-up share capital as may be prescribed, and which by its articles:–
(i) restricts the right to transfer its shares;
(ii) except in case of One Person Company, limits the number of its members to two hundred:
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:
Provided further that –
(a) persons who are in the employment of the company; and
(b) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and
(iii) prohibits any invitation to the public to subscribe for any securities of the company.
(Section 2(68) of the Companies Act, 2013)
Points to be noted
Definition of private limited company specifies the restrictions, limitations and prohibitions must be expressly provided in the articles of association of a private limited company.
Only the number of members that is limited to two hundred. A private company may issue debentures to any number of persons, the only condition being that an invitation to the public to subscribe for debentures is prohibited.
if a private company alters its articles in such a manner that they no longer include the restrictions and limitations which are required to be included in the articles of a private company under this Act, such company shall, as from the date of such alteration, cease to be a private company.( Section 14 (1) of the CA 2013)
The words ‘Private Limited’ must be added at the end of its name by a private limited company.
A private company may be formed for any lawful purpose by two or more persons, by subscribing their names to a memorandum and complying with the requirements of this Act in respect of registration. (Section 3(1), of CA 2013)
A private company shall have a minimum number of two directors. (Section 149(1) of the CA 2013 ) . The only two members may also be the two directors of the private company.
194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—
(i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;
(ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,
of such sum as income-tax on income comprised therein.
(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with his Permanent Account Number, to the person paying or crediting such sum.
(7) The person responsible for paying or crediting any sum to the person referred to in sub-section (6) shall furnish, to the prescribed income-tax authority or the person authorised by it, such particulars, in such form and within such time as may be prescribed.
Format of Declaration Under Section 194C(6) For Non – Deduction of Tax at Source (TDS) to be furnished by the Transporter.. NO TDS in case where such transporter owns ten or less goods carriages at any time during the previous year and furnishes a declaration to such effect, along with PAN.
I, Name of vehicles owner, Proprietor/ Partner/ Director of M/s Name of the company or firm and address of the company, (hereinafter “The Contractor”) do hereby make the following declaration as required by sub section (6) of section 194C of the Income Tax, 1961 for receiving payments from the payer without deduction of tax deduction at source (TDS).
1. That name of party authorized to make this declaration in the capacity as proprietor/ partner/ Director.
2. That the contractor is engaged by the payer for hiring or leasing of goods carriage for its business.
3. That I have not own more than ten goods carriage vehicles as on date.
4. That if the number of goods carriages owned by the contractor exceeds ten at any time during the previous year 2022-23 (01-04-2022 to 31-03-2023), the contractor shall forthwith, in writing intimate the prater of this fact. 5. That the Income Tax permanent account number (PAN) of the contractor is …………………… A photocopy of the same is furnished to the payer along with this declaration.
The Foreign Contribution (Regulation) Act, 2010 (FCRA, 2010) and the Foreign Contribution (Regulation) Rules, 2011 (FCRR, 2011) came into force with effect from 01.05.2011. The provisions under the Act/Rules relating to ‘foreign hospitality’ and guidelines to be followed for consideration of proposals for acceptance of the same was circulated vide O.M. No. 11/21022/58(97)/2011 -FCRA-1 dated 20.09.2011. However, subsequent amendments in the FCRA, 2010 and FCRR, 2011 have necessitated review of those guidelines. Therefore these guidelines have been reviewed and fresh guidelines are hereby circulated for information and compliance by all concerned. It is requested that wide publicity may be given to these guidelines. In case of any doubt, relevant provisions of the FCRA, 2010, FCRR, 2011 and other statutory notifications may be referred.
Income Tax Department initiated a Search & Seizure action on few groups engaged in the business of gold & diamond jewellery and real estate, on 17.11.2022. The searches were carried out at more than 30 premises spread over Patna, Bhagalpur, Dehri-on-Sone, Lucknow and Delhi.
During the course of the search, large number of incriminating documents and digital evidence demonstrating evasion of income have been found & seized.
In one of groups, engaged in the business of gold & diamond jewellery, analysis of seized evidence reveals that this group has invested its unaccounted income in cash purchase of jewellery, renovation of shops and immovable properties. This group has been found to have introduced unaccounted money of over Rs. 12 crore in its books of account, in the garb of advance from customers. Further, upon physical verification of stock, during the search action, unaccounted stock of more than Rs. 12 crore has been found.
In the case of another group engaged in real estate business, evidences of unaccounted cash transactions in purchase of land, construction of buildings and sale of apartments, have been found and seized. The evidence seized in the case of a prominent land broker has further corroborated the above unaccounted transactions. The quantum of such unaccounted cash transactions is more than Rs. 80 crore. The unaccounted income so earned by the key persons of the group has been invested in acquisition of many immovable properties including large parcels of land.
During the search operation, unaccounted cash and jewellery worth more than Rs. 5 crore have been seized. A total of 14 bank lockers have been put under restraint. So far, the search action has led to detection of unaccounted transactions exceeding Rs. 100 crore.