INSITE - India - July 2024

MCA Update | Amendments to e-Form MGT-6

Summary: On July 15, 2024, the Ministry of Corporate Affairs (MCA) of the Government of India issued a notification amending the Companies (Management and Administration) Rules, 2014, through the Companies (Management and Administration) Amendment Rules, 2024. This amendment, under the authority of subsections (1) and (2) of section 469 of the Companies Act, 2013, introduces changes to improve corporate management and administration efficiency and transparency. A key highlight is the replacement of Form MGT-6 with a new form to streamline reporting and compliance for companies.

In Detail: The Companies (Management and Administration) Rules, 2014, regulate the management and administrative functions of companies in India, including the maintenance of registers and the filing of returns and reports.

The MCA has amended e-Form MGT-6 under the Companies (Management and Administration) Amendment Rules, 2024.

The e-Form MGT-6 is used to declare to the Registrar of Companies (ROC) the person listed as the registered owner of shares, while another person holds the beneficial interest. This form provides details about both the registered and beneficial owners of the shares.

Key Change in the Amendment:

1. Substitution of Form MGT-6: The amendment replaces the existing Form MGT-6 with a new form. Form MGT-6 relates to the return filed with the registrar regarding the declaration of beneficial interest in shares. The new form aims to provide more detailed and structured information, improving compliance and transparency.

2.  Form MGT-6: Detailed Breakdown

Corporate Information:

• Corporate Identity Number

• Name and registered office address of the company

• Email ID of the company

Declaration of Beneficial Interest:

• Information on the beneficial owner, including their identification details and the nature of their interest in the company’s shares

• Details of the shares held, voting rights, and other relevant particulars that establish the beneficial interest

Changes in Beneficial Interest:

• Fields for reporting changes in beneficial interest, including the date of change and updated information on the beneficial owner

• Provisions for attaching supporting documents to verify the changes reported

Implementation and Compliance:

• The new form comes into force from the date of its publication in the Official Gazette

• Companies must promptly adopt the new form and comply with the updated reporting requirements

• Companies are required to ensure all declarations and changes in beneficial interest are accurately reported using the revised Form MGT-6

Key Links: getdocument (mca.gov.in)

CBIC Announces IGST Rate Changes on Goods Following 53rd GST Council Meeting

Summary: On July 12, 2024, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 02/2024-Integrated Tax (Rate) following the 53rd GST Council Meeting. This notification announced significant changes in Goods and Service Tax (GST) rates for various goods, aiming to reduce the tax burden on essential items and streamline the tax structure. These changes will take effect on July 15, 2024.

In Detail: The CBIC issued Notification No. 02/2024-Integrated Tax (Rate) following the 53rd GST Council Meeting.

Below is a detailed analysis of the new GST rates and their implications.

• Reduction in GST Rate for cartons, boxes, and cases: The GST rate for cartons, boxes, and cases made of corrugated and non-corrugated paper or paperboard has been reduced from 18% to 12%.

• Uniform GST Rate for milk cans: All milk cans, regardless of whether they are made of iron, steel, or aluminium, will now have a uniform GST rate of 12%. This change simplifies the tax structure for milk cans.

• Reduced GST Rate for solar cookers: The GST rate for solar cookers, whether single or dual energy source, has been reduced to 12%.

• GST Rate for parts of brooders: The GST rate for parts of brooders is now set at 12%, benefiting the poultry industry.

Conclusion: These changes simplify the tax structure and reduce the tax burden on essential items. Lower GST rates for cartons, milk cans, solar cookers, and parts of brooders are expected to positively impact businesses and consumers.

Key Links: Explore (cbic.gov.in)

CBIC Exempts CGST on Railway and Accommodation Services

Summary: The CBIC has issued Notification No. 04/2024-Central Tax (Rate) on July 12, 2024, introducing significant changes effective from July 15, 2024, following the recommendations of the 53rd GST Council Meeting. The key amendments exempt Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) on various services provided by Indian Railways and certain accommodation services.

In Detail: The GST Council recommended streamlining tax policies and has decided to reduce the burden on essential services. Following this, CBIC issued Notification No. 04/2024-Central Tax (Rate) to exempt certain services from CGST and SGST. These exemptions cover services provided by Indian Railways to the public, intra-railway transactions, and specific accommodation services. This change is expected to benefit both service providers and recipients.

1. Exemption on Services Provided by Indian Railways

Effective July 15, 2024, several services provided by Indian Railways are exempt from GST:

• Platform Tickets: No GST on platform tickets, making them cheaper.

• Retiring/Waiting Rooms: Use of these rooms at railway stations is now more affordable without GST.

• Cloak Room Services: Passengers can store their luggage without GST charges.

• Battery-Operated Car Services: These mobility services for elderly and differently-abled passengers are now GST-free.

Further, intra-railway transactions between different zones or divisions under the Ministry of Railways are exempt from GST, effective retroactively from October 20, 2023. This regularizes any past tax issues up to the issuance of this notification.

2. Exemption on Services by Special Purpose Vehicles (SPVs)

The notification also exempts GST on services provided by SPVs to Indian Railways. This includes:

• Usage of SPV-Built Infrastructure: Indian Railways can use infrastructure built by SPVs without paying GST, making it easier to use this infrastructure without extra tax costs.

• Maintenance Services: GST is also exempt on maintenance services provided by Indian Railways for infrastructure built by SPVs, keeping maintenance cost-effective.

This exemption is retroactive from July 1, 2017, addressing past tax liabilities and regularizing the issues.

3. Exemption on Accommodation Services

The notification updates Notification No. 12/2017-Central Tax (Rate) to exempt certain accommodation services. Key points are:

• Value of Accommodation: GST is exempt for accommodation services costing up to Rs. 20,000 per person per month, benefiting those seeking affordable long-term stays.

• Continuous Stay Requirement: The exemption applies only if the stay is for a minimum of 90 consecutive days, focusing on long-term stays.

• Exclusions: The exemption does not cover accommodation for students in student residences, hostels, camps, or paying guest accommodations.

Conclusion: The CBIC’s amendments in Notification No. 04/2024-Central Tax (Rate) aim to reduce the tax burden on essential services and support economic activities. By exempting GST on services from Indian Railways and certain accommodation services, the CBIC supports the GST Council's goal of simplifying tax policies and improving public welfare.

Key Links: Tax Information (cbic.gov.in)