differential voting rights

PIB press release dated 16th August, 2019

The Ministry of Corporate Affairs has amended the provisions relating to issue of shares with Differential Voting Rights (DVRs) provisions under the Companies Act with the objective of enabling promoters of Indian companies to retain control of their companies in their pursuit for growth and creation of long-term value for shareholders, even as they raise equity capital from global investors.

            The key change brought about through the amendments to the Companies (Share Capital & Debentures) Rules brings in an enhancement in the previously existing cap of 26% of the total post issue paid up equity share capital to a revised cap of 74% of total voting power in respect of shares with Differential Voting Rights of a company.

Another key change brought about is the removal of the earlier requirement of distributable profits for 3 years for a company to be eligible to issue shares with Differential Voting Rights.

            The above two initiatives have been taken by the Government in response to requests from innovative tech companies & startups and to strengthen the hands of Indian companies and their promoters who have lately been identified by deep pocketed investors worldwide for acquisition of controlling stake in them to gain access to the cutting edge innovation and technology development being undertaken by them.

The Government had noted that such Indian promoters have had to cede control of companies which have prospects of becoming Unicorns, due to the requirements of raising capital through issue of equity to foreign investors.

Alongside the above two changes, another major step taken is that the time period within which Employee Stock Options (ESOPs) can be issued by Startups recognized by the Department for Promotion of Industry & Internal Trade (DPIIT) to promoters or Directors holding more than 10% of equity shares, has been enhanced from 5 years to 10 years from the date of their incorporation.

GI tag for 4 new products

PIB press release dated 16th August, 2019

The Geographical Indication (GI) under the Department for Promotion of Industry and Internal Trade hasrecenly registered 4 new GIs. PalaniPanchamirtham from Palani Town in Dindigul District of Tamil Nadu State, Tawlhlohpuan and Mizo Puancheifrom the state of Mizoram and Tirur Betel leaf from Kerala are the latest additions to the list of registered GIs.

GI is an indication used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. Such a name conveys an assurance of quality and distinctiveness which is essentially attributable to its origin in that defined geographical locality.

PalaniPanchamirtham, an abishegaPrasadam, from Palani Town is one of the main offerings in the Abisegam of Lord Dhandayuthapani Swamy, the presiding deity of ArulmiguDhandayuthapaniswamy Temple, situated in palani Hills, Palani Town in Dindigul District of Tamil Nadu. It is a combination of five natural substances, namely, banana, jaggery sugar, cow ghee, honey and cardamom in a definite proportion. It is prepared in a natural method without addition of any preservatives or artificial ingredients and is well known for its religious fervour and gaiety. This is the first time a temple ‘prasadam’ from Tamil Nadu has been bestowed with the GI tag.

Tawlhlohpuan, a medium to heavy, compactly woven, good quality fabric from Mizoram is known for warp yarns, warping, weaving & intricate designs that are made by hand. Tawlhloh, in Mizo language, means 'to stand firm or not to move backward’. Tawlhlohpuan, which holds high significance in the Mizo society, is produced throughout the state of Mizoram, Aizawl and Thenzawl town being the main centre of production.

Mizo Puanchei, a colourful Mizo shawl/textile, from Mizoram, is considered as the most colourful among the Mizo textiles. It is an essential possession for every Mizo lady and an important marriage outfit in the state. It is also the most commonly used costume in Mizo festive dances and official ceremonies. The weavers insert the designs and motifs by using supplementary yarns while weaving to create this beautiful and alluring textile.

Tirur betel vine from Kerala, which is mainly cultivated in Tirur, Tanur, Tirurangadi, Kuttippuram, Malappuram and Vengara block panchayaths of Malappuram District, is valued both for its mild stimulant action and medicinal properties. Even though it is commonly used for making pan masala for chewing, it has many medicinal, industrial and cultural usagesand is considered as a remedy for bad breath and digestive disorders.

GI products can benefit the rural economy in remote areas, by supplementing the incomes of artisans, farmers, weavers and craftsmen. India’s rural artisans possess unique skills and knowledge of traditional practices and methods, passed down from generation to generation, which need to be protected and promoted.The Department for Promotion of Industry and Internal Trade has taken several initiatives in this regard and is actively involved in promotion and marketing of GIs.

transparency in tax administration

PIB press release dated 14th August, 2019

With a view to bringing greater transparency in the functioning of the tax-administration and improvement in service delivery, almost all notices and orders of Income Tax Department are being generated electronically on the Income Tax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes (CBDT) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as “communication”) were found to have been issued manually, without maintaining a proper audit trail of such communication.

In order to prevent such instances and to maintain proper audit trail of all communication, the CBDT has, vide Circular No.19/2019 dated 14.08.2019 laid down parameters specifying the manner in which any communication issued by any income-tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person will be dealt with. All such communication issued on or after the 1st of October, 2019 shall carry a computer-generated Document Identification Number (DIN) duly quoted in the body of such communication.

CBDT has also specified exceptional circumstances where the communication may be issued manually but only after recording reasons in writing and with the prior written approval of the Chief Commissioner / Director General of Income-Tax concerned. In cases where manual communication is required to be issued, the reason for issue of manual communication without DIN has to be specified alongwith the date of obtaining written approval of the Chief Commissioner / Director General of Income-Tax in a particular format. Any communication which is not in conformity with the prescribed guidelines shall be treated as invalid and shall be deemed to have never been issued. Further, CBDT has also laid down the timelines and procedure by which such communication issued manually will have to be regularised and intimated to the Principal Director General of Income-tax (Systems).

            In addition to the above, in all pending assessment proceedings, where notices were issued manually, prior to issuance of the above referred Circular, all such cases would be identified and the notices so sent would be uploaded on ITBA by 31st October, 2019.

This is another step taken by CBDT towards better delivery of taxpayer services while ensuring accountability in official dealings.

free ATM transactions

RBI circular dated 14th August, 2019

Usage of ATMs – Free ATM transactions – Clarifications

Please refer to our circulars DPSS.CO.PD.No. 316/02.10.002/2014-2015 dated August 14, 2014 and DPSS.CO.PD.No. 659/02.10.002/2014 -2015 dated October 10, 2014 on the subject.

2. It has come to our notice that transactions that have failed due to technical reasons, non-availability of currency in ATMs, etc., are also included in the number of free ATM transactions.

3. It is hereby clarified that transactions which fail on account of technical reasons like hardware, software, communication issues; non-availability of currency notes in the ATM; and other declines ascribable directly / wholly to the bank / service provider; invalid PIN / validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no charges therefor shall be levied.

4. Non-cash withdrawal transactions (such as balance enquiry, cheque book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e., when a card is used at an ATM of the bank which has issued the card) shall also not be part of the number of free ATM transactions.

5. This directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).

The Last Cop Out

The Last Cop out by Mickey Spillane, my first one by him, is an edge of the seat thriller of gangster wars gone wrong. Nobody knows who is killing the mobsters off one by one in clinical fashion. Gillian Burke is a knocked off ex-cop with a grudge against the underworld. He gets to come back to the police force to find out the goings on, because ostensibly he is the one who knows more about these gangsters. Frank Verdun is a Frenchman with a penchant for killing and Mark Shelby is eyeing the top spot after everybody is wiped out. Papa Menes is an old wizened hat at these matters. Couple of female characters as well, love as well as lust interest. Few oddball characters as well in the story. Goodreads 5/5

Amazfit Bip watch review

Purchased a Xiaomi Amazfit Bip A-1708 watch online through Amazon. Was using the TomTom watch earlier whose dial face got scrambled and so could not continue using it. Sad because it served me well for so many years. Could integrate TomTom with Strava so all the data was available to view on Strava as well as on Tom Tom web page. The statistics were all there - kms run, pace, cadence, elevation etc.

So got this watch, the cost was only Rs.5490 on Amazon and checked all the features online as well as confabulated with a couple of friends. It supposedly had basic features of a GPS tracker such as distance, time and pace. Struggled with the strava integration until a friend told me to do via Amazfit app. So that was also done and all ready for a run today morning. 

The first time I used Amazfit today morning, it was pouring continuously for hours together with no relent. So okay I decided to go out anyways for a run. The GPS started quickly but the dial face got off to the normal watch face so could not see anything on the watch - the distance, time, pace etc. Plus it was also raining heavily so the visibility was also poor. So no complaints on that count at least on the first day. I finished the run, switched it off, showed me a distance of 10.08 kms and also the running map. I was happy that the watch is working fine. But when I tried to log into Strava, there was no data. I tried Amazfit app to check whether today's data is logged in - nothing. Checked in MI Fit App - again zilch. So not at all happy. Checked my mobile whether the blue tooth is on or off. It was on but the integration has not happened. That is first day report. Hopefully will manage to navigate the features better as days go along and able to master the integration as well. Otherwise I am not happy with the watch on the first day. First day review 1/5 

Picture above is taken from internet and used for representational purposes only.  

External Commercial Borrowings

Gist of RBI circular dated 30th July, 2019 on the subject.

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to paragraphs 2.1.(v) and 2.1.(viii) of Master Direction No.5 dated March 26, 2019 on the above subject in terms of which, inter alia, ECB proceeds cannot be utilised for working capital purposes, general corporate purposes and repayment of Rupee loans except when the ECB is availed from foreign equity holder for a minimum average maturity period of 5 years. Further, on-lending for these activities out of ECB proceeds is also prohibited.

2. Based on the feedback from stakeholders and with a view to further liberalise the ECB framework, it has been decided, in consultation with the Government of India, to relax the end-use restrictions. Accordingly, eligible borrowers will now be permitted to raise ECBs for the following purposes from recognised lenders, except foreign branches/ overseas subsidiaries of Indian banks, subject to paragraph 2.2 of the direction ibid:

1. ECBs with a minimum average maturity period of 10 years for working capital purposes and general corporate purposes. Borrowing by NBFCs for the above maturity for on lending for the above purposes is also permitted.
2. ECBs with a minimum average maturity period of 7 years can be availed by eligible borrowers for repayment of Rupee loans availed domestically for capital expenditure as also by NBFCs for on-lending for the same purpose. For repayment of Rupee loans availed domestically for purposes other than capital expenditure and for on-lending by NBFCs for the same, the minimum average maturity period of the ECB is required to be 10 years.
3. It has been decided to permit eligible corporate borrowers to avail ECB for repayment of Rupee loans availed domestically for capital expenditure in manufacturing and infrastructure sector if classified as SMA-2 or NPA, under any one time settlement with lenders. Lender banks are also permitted to sell, through assignment, such loans to eligible ECB lenders, except foreign branches/ overseas subsidiaries of Indian banks, provided, the resultant external commercial borrowing complies with all-in-cost, minimum average maturity period and other relevant norms of the ECB framework.

3. The prescribed minimum average maturity provision, as above, for the aforesaid end-uses will have to be strictly complied with under all circumstances.

4. All other provisions of the ECB policy remain unchanged. AD Category - I banks should bring the contents of this circular to the notice of their constituents and customers.

5. The Master Direction No. 5 dated March 26, 2019 is being updated to reflect the above changes.

6. The directions contained in this circular have been issued under section 10(4) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.