Ahmedabad Chartered Accountant Journal October, 2023 453 applicant it is necessary to determine the supplier of services and the recipient of services in the transaction between the government and the applicant. To determine the supplier and recipient of services in the transaction it is necessary to analyse the terms of the contract with reference to the definition of consideration suppliers of services and recipient of services in the CGST Act, 2017. On analysis of the terms and condition of the contract with reference to the definition of the terms, consideration recipient of services and supplier of services as extracted above it is evident that the transaction covered by the subject contract between the applicant and the Government in sum and substances confers the right to the applicant to extract the mud and sand lying underneath the reservoir or Mangalam Dam and appropriate the same by way of sale or otherwise during the terms of the contract for a lumpsum consideration of Rs 15 Corres payable in instalments spread over the contract period. Therefore in the subject transaction the supplier of services is the Irrigation Department of the Government of Kerala and the recipient of services is the applicant. The next question to be answered is regarding the person who is liable to pay the tax whether the supplier of services under forward charge or the recipient of services under reverse charge. We have already discussed and concluded that in the instant case the applicant is the recipient of services supplied by the Irrigation Department of the Government of Kerala. As per entry at SL No 5 of Notification No 13/ 2017 Central Tax ( Rate) dated 28.03.2017 the tax in respect of services supplied by the Central Government, State Government, Union territory or local authority to a business entity shall be paid by the business entity located in the taxable territory on reverse charge basic. Therefore the applicant is liable to pay the GST on reverse charge basic on the consideration of Rs 15 Crores given to the State Government for grant of the right to desilt the dam and extract the sand and mud lying underneath for appropriation. Rulling: - No in view of the finding above that the applicant is the recipient of services supplied by the Irrigation department of the government of Kerala by way of transfer of right to extract the sand and mud lying underneath the reservoir of Mangalam Dam and to appropriate the same and the services are appropriately classified under SAC 997337 attracting GST at the rate of 18% ( CGST -9% + SGST – 9% ) as per entry at SL No 17 ( Viii) of Notification no 11/2017 Central Tax (Rate) dated 28.06.2017. - Yes, The applicant as the recipient of the services is liable to pay the GST on reverse charge basic on the consideration paid to the State Government as per entry at SL No. 5 of Notification No 13/2017 Central Tax (Rate) dated 28.06.2017. ❉ ❉ ❉ Advance Ruling under GST
454 Ahmedabad Chartered Accountant Journal October, 2023 MCA UPDATES: 1) The Limited Liability Partnership (Second Amendment) Rules, 2023: Vide these amendment rules, the MCA has notified and substituted the LLP Form No. 3 [Information with regard to Limited Liability Agreement and changes, if any, made therein] and LLP Form No. 4 [Notice of appointment, cessation, change in name/address/designation of designated partner or partner and consent to become a partner/ designated partner]. [F. No. 01/03/2021-CL-V (Pt. IV)dated 01.09.2023] 2) Clarification on hording of Annual General Meeting (AGM) and EGM through Video Conference (VC) or other Audio-Visual Means (OAVM) and passing of Ordinary and Special resolutions by the companies under the Companies Act,2013 read with Rules made thereunder -Extension of timeline: The MCA has decided to allow the companies to conduct their EGMs through video Conference (VC) or other Audio-Visual Means (OAVM) or transact items through postal ballot in accordance with framework provided in the Ministry’s General Circular No. 14/2020 dated 08.04.2020, General Circular No. 03/ 2022 dated 05.05.2022 and General Circular No. 11/2022 dated 28.12.2022, up to 30th September, 2024. [File No. Policy -17/57/2021-CL-MCA dated 25.09.2023] IFSCA Updates: 1) Authorisation of Scheme file under IFSCA (Fund Management) Regulations, 2022: CA. Naveen Mandovara [email protected] Update In order to provide operational clarity, it has been decided that all FMEs shall hence forth seek authorisation from the Authority for each scheme filed under Chapters III, IV and V of the Regulations. [Circular No. IFSCA-AIF/47/2023-Capital Markets dated 15.09.2023] SEBI UPDATES: 1) New format of Abridged Prospectus for public issues of Non-Convertible Debt Securities and/ or Non-convertible Redeemable Preference Shares: In order to further simplify, provide greater clarity and consistency in the disclosures across various documents and to provide additional but critical information in the abridged Prospectus, the SEBI has revised the format for disclosures in the abridged Prospectus and the same is placed at Annex-I of this Circular. This Circular shall be applicable for all public issues opening on or after October 1, 2023. Accordingly, for public issues that open on or after October 1, 2023, the format of an Abridged Prospectus shall be as per Annex-I of this Circular instead of Part B of Schedule I of the NCS Regulations. A copy of the Abridged Prospectus shall be made available on the website of issuer, merchant bankers, registrar to an issuer and a link for downloading Abridged Prospectus shall be provided in issue advertisement for the public issue. Further, the issuer/ Merchant Bankers shall insert a Quick Response (QR) code on the last on the last page of the Abridged Prospectus. The scan
Ahmedabad Chartered Accountant Journal October, 2023 455 of such QR code on the Abridged prospectus would lead to the Prospectus. Further, the issuer entity/ Merchant Bankers shall insert a QR code on the front page of the documents such as front outside cover page, advertisement, etc. as deemed fit by them. The scan of the QR code would lead to the prospectus or abridged prospectus as applicable. [Circular No.: SEBI/HO/DDHS/PoD1/CIR/P/2023/ 150 dated September 04, 2023: 2) Regulatory Reporting by AIFs: In order to enable the AIF industry to have uniform compliance standards, ease compliance reporting and for regulatory and developmental purposes, the existing quarterly reporting format has been reviewed in consultation with AIF Industry Associations – Indian Venture and Alternate Capital Association (IVCA) and Equalifi (hereinafter referred to as ‘association’) and the revised format has been prepared. The said revised reporting format shall be hosted by the AIF associations on their website within 2 working days of issuance of this circular. The association shall engage with all AIFs to ensure that to begin with and to carry out a trial run, quarterly report for the June, 2023 quarter is submitted in the revised format by October 15, 2023 on the SI Portal. The report for the quarter ending September 30, 2023 shall be submitted in the revised format by November 15, 2023. From quarter ending December 31, 2023 onwards, AIFs shall submit quarterly report in the revised format within 15 calendar days from the end of each quarter. [Circular No.: SEBI/HO/AFD/SEC-1/P/CIR/2023/ 0155 dated 14.09.2023] Corporate Law Update 3) Extension of timelines (i) for nomination in eligible demat accounts and (ii) for submission of PAN, Nomination and KYC details by physical security holders; and voluntary nomination for trading accounts: In the matter of freezing of trading accounts and demat account which do not have ‘choice of nomination’ by September 30, 2023, the SEBI has decided as under a) Submission of ‘choice of nomination’ for trading accounts has been made voluntary as a step towards ease of doing business; b) With respect to demat accounts, it has been decided to extend the last date for submission of ‘choice of nomination’ to December 31, 2023. In case of physical security holders, it has been decided to extend the last date for submission of PAN, Nomination, Contact details, Bank A/c details and Specimen signature for their folio numbers to December 31, 2023. [Circular No.: SEBI/HO/MIRSD/MIRSD-PoD-1/P/ CIR/2023/158 dated 26.09.2023] 4) Nomination for Mutual Fund Unit Holders – Extension of timelines: The requirement for nomination/ opting out of nomination for all the existing individual unit holder(s) holding mutual fund units either solely or jointly, has been extended to January 01, 2024 instead of September 30, 2023, failing which the folios shall be frozen for debits. [Circular No.: SEBI/HO/IMD/IMD-I POD1/P/CIR/ 2023/160 dated 27.09.2023] ❉ ❉ ❉
456 Ahmedabad Chartered Accountant Journal October, 2023 “Analyzing Landmark RERA Judgments: Legal Insights and Implications” Matter: Jurisdiction of RERA in case of co-operative societies Case: Praveen Alok Vs. Revanta Multi State CGHS Ltd. The present case deals with the issue of jurisdiction of Delhi RERA where the respondent is a society registered under the Multi State Cooperative Societies Act, 2002 (“MSCS Act”). The respondent, Revanta Multi State CGHS Ltd. contended that it is a society registered under MSCS Act and the Delhi RERA lacks jurisdiction to entertain the complaint as it is hit by Sections 84 and 115 of the MSCS Act. The respondent further submitted that Section 84 of MSCS Act makes it abundantly clear that the dispute between the parties is to be settled before the arbitrator appointed by the Central Registrar and the decision of the said arbitrator shall be final and cannot be called into question by any authority. As such, the obligations of both parties are defined under the MSCS Act and the respondent has not registered with RERA Delhi. The Delhi RERA observed that clause (iv) of Section 2(zk) of the Act defines the promoter as ”an apex State level co- operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its members or in respect of the allottees of such apartments or buildings”. Further, Section 89 of the Act gives overriding effect to anything inconsistent with the provisions of the Act. Considering the aforesaid provisions of the Act, the Delhi RERA held that the contention of the respondent that the Act is not applicable to co-operative housing societies cannot be considered valid. The reason for the same was that the respondents had placed a condition upon the members in the “Declaration cum Expression of Interest” that the project is subject to the provisions of the Act. Further, the Delhi RERA observed that Rule 33(1) of the National Capital Territory of Delhi Real Estate (Regulation and Development) (General) Rules, 2016, provides that an aggrieved person may file a complaint with Delhi RERA for any violation under the Act in Form M. The complainant, Praveen Alok was claiming a “refund” with interest, therefore, the complaint in Form M was maintainable in the present complaint. The Delhi RERA directed the respondents to refund the entire amount to the complainant within 45 (forty-five) days of issuance of the order along with interest at the rate of 9% (nine percent) per annum from the date of payment of each sum until the date of its actual return. Matter: Complaint not maintainable in absence of documentary proof Case: Manoj Kumar Kukreja Vs. Jaipur Landmark Pvt. Ltd In the present case, applicant, Manoj Kumar booked a flat in respondent’s, Jaipur Landmark Pvt. Ltd.’s (“Jaipur Landmark”) project of which delivery was promised within 6 (six) months. Since the delivery of the flat was not made within the stipulated time, Manoj Kumar prayed for a refund along with the bank loan amount. As a tripartite agreement was executed between Manoj Kumar, Jaipur Landmark and Axis Bank, Manoj Kumar also filed an application to CA. Manan Doshi [email protected] GujRERA Corner
Ahmedabad Chartered Accountant Journal October, 2023 457 GujRERA Corner implead Axis Bank in the complaint. Jaipur Landmark time and again asked for the submission of a copy of the agreement for sale as all records were burnt due to a fire accident in the office of Jaipur Landmark. The Rajasthan RERA observed that a lot of opportunities were given to Manoj Kumar, either before the conciliation forum or before the Rajasthan RERA, to provide a copy of the agreement for sale. The Rajasthan RERA also observed that Manoj Kumar did not prove the quantum of the amount that was deposited with Jaipur Landmark and details of payment of instalments were also never provided to the Rajasthan RERA. The Rajasthan RERA held that in the absence of documentary proof, it does not find it appropriate to entertain the complaint. The Rajasthan RERA also dismissed the application for impleading Axis Bank as a respondent on the ground that as per Section 31 of the Act only the promoter, allottee and real estate agent are the aggrieved parties and unless the bank takes over the property as assignee of the promoter, it is not a necessary party. Matter: Non-compliance of RERA order Case: Priyesh Vijaywargi Vs. Vikramprakash Takale & Harishwar Madhukarmendre and Anr. The complainant, Priyesh Vijaywargi filed the complaint seeking direction to the respondent from MahaRERA for refund of the entire amount paid along with interest and compensation under the provisions of Section 18 of the Act in respect of the booking of a flat. The complainant had earlier filed a complaint against the promoter since the promoter had accepted more than 10% (ten percent) of the consideration in respect of the said unit, however, no agreement for sale was registered. The MahaRERA in that earlier order levied a penalty on the promoter along with directions to register an agreement for sale. The claim of the complainant, Priyesh Vijaywargi in the latter complaint was refuted by the respondents, (i) Vikramprakash Takale & Harishwar Madhukarmendre and (ii) Kalash Builders and Developers, mainly on the ground that the MahaRERA cannot review its own order passed in the earlier complaint filed by the complainant as it had already been disposed of. The MahaRERA observed that the respondents have filed their written submissions on record of MahaRERA, however, they have not contested the non-compliance of the order passed by MahaRERA in the previous complaint and the reasons attached to it. The MahaRERA in the present case was of the view that the contention of the respondents has no substance in law nor is hit by the law of res-judicata as the cause of action and reliefs sought in both the complaints were different. The MahaRERA held that the respondents have failed to comply with the previous order passed by the MahaRERA, and the penalty to MahaRERA was increased exponentially as per the provision of Section 63 of the Act. Matter: Unilateral change in allotment of unit by promoter Case: Mrs. Raju Chawla Vs. Dilip Estate & Town Planners Pvt. Ltd. The complainant, Mrs. Raju Chawla a senior citizen booked a residential flat on the 6th floor, numbered 601, admeasuring 2300 sq. ft. with a commitment from the respondent, Dilip Estate & Town Planner Pvt. Ltd. that there would be 1 flat per floor along with 3 allotted open car parking. There was no agreement for sale executed and the allotment letter was silent on the date of possession, but the complainant was orally informed at the time of booking that the possession of the flat would be given within a span of 24 (twenty four) months from the date of the said allotment letter. However, the respondent unilaterally informed the complainant that in light of the proposed amendment of sanctioned plans, the respondent would now allocate the 1st floor
458 Ahmedabad Chartered Accountant Journal October, 2023 to her instead of the 6th floor. The complainant addressed multiple letters to the respondent to provide her with the proposed sanctioned plans, but the respondent replied with no- objection draft consent letters. The respondent contended that the Ministry of Civil Aviation raised an issue on the sanctioned height owing to a part of the project falling within the radius of the airport which resulted in a delay in construction and the respondent was constrained to demolish two slabs for the structure constructed and reduce the height and modify the plans accordingly. The complainant, on the other hand, mainly contended that the respondent has agreed to allot her flat on the 6th habitable floor, however now it is planning to add a podium on the 1st floor and is giving her a flat on the 5th floor and hence, she refused to sign the registered agreement for sale. The MahaRERA perused the allotment letter and the rival submissions made by both parties and observed that prima facie it appeared that the respondent had allotted Flat no. 601 on the 6th floor of the building, however nowhere it was mentioned that the said floor includes the 1st floor as a podium. Accordingly, MahaRERA held that since the flat on GujRERA Corner the 6th floor was allotted to the complainant, the respondent now cannot take the stand, after a lapse of about more than 6 (six) years, that the 1st floor is the podium and hence the 5th floor is actually allotted to the complainant. If that was the case, nothing should prevent the respondent to clarify the said issue in the allotment letter issued in favour of the complainant. The complainant, being an allottee should have been informed about the same at the time of booking. MahaRERA directed the respondents to refund the entire amount paid by the complainant along with interest at the rate prescribed under the Act and the relevant rules made thereunder from the date of payment till the actual realization of the said amount to the complainant. ❉ ❉ ❉
Ahmedabad Chartered Accountant Journal October, 2023 459 Summary: JP Morgan is going to include Indian Government Bond’s in its Government Bond Index- Emerging Markets Global Index Suite from June 2024. This is a positive development for India as it would lead to diversification of investor base for Indian Government Securities and also lead to development of domestic capital markets. G20 reached consensus on declaration, handing over the gravel to Brazil. Markets improved marginally due to positive sentiments as Nifty touched 20000 for the first time. With bullish markets, the IPO lane stayed busy as 11 IPOs hit the street in September; with a robust IPO pipeline in coming months. Key M&A deal includes Nirma Ltd. acquiring majority stake in Glenmark Lifesciences Ltd.and key Private Equity deal includesIndia Resurgence Fund acquiring majority stake in Ivy Health and Lifesciences Pvt. Ltd. Economic Update: India’s inclusion in JP Morgan’s Emerging market bond index: · JP Morgan Chase & Co. in September said that it would include Indian Government Bond’s in its Government Bond Index- Emerging Markets Global Index Suite from June 2024. CA. Karan Vora [email protected] · The inclusion of Indian Bonds in the JP Morgan index begins in June 2024 with a weight of 1%, increasing 1% each month until it reaches 10% by April 2025. · This will lead to inflow of about $ 25 to $ 30 Billion in the next 10 months from June 2024. · It’s a positive development for India as apart from passive flows, there would be active funds globally that would like to invest. · This development is good from Balance of Payment and Fiscal Deficit point of view as slowly and steadily funds will get infused. · This should also result in reduction of borrowing cost and yields should also fall, over a period of time. · However, this may lead to increased volatility for retail investors as FPIs are known for sudden entries and exits. · Rating Agency Fitch said that the inclusion will support diversification of Investor base for Indian Government securities, slightly lower funding cost, support further development of Domestic Capital Markets and increase India’s credit profile marginally in near term. G20 Summit Ends: · India formally handed over the G20 presidency to Brazil at the closing ceremony of the annual summit of the grouping that was held in New Delhi.Prime Minister Narendra Modi completed the transition by handing over the ceremonial gavel of the presidency to Brazil President Luiz Inacio Lula da Silva.
460 Ahmedabad Chartered Accountant Journal October, 2023 Capital Markets · India has had the presidency of the G20 since Dec. 1, when it took over from Indonesia, and will continue to hold the position until Nov. 30. · PM Modi announced that G20 countries have reached consensus on declaration. This is significant because of differences over RussiaUkraine war. Global leaders came to India for participating in G20. · Highlights: · All 83 paragraphs of G20 New Delhi leader’s declaration, including 8 Paragraphs on Ukraine conflicts were unanimously approved. · Declaration includes a concrete strategy for “Strengthening multilateral development banks, regulating crypto currency, digital infrastructure to enhance finance,and Agreement to boost World Banks financing capacity. · African Union is accepted as part of G20. · All countries came together for major Green Development pact to focus on financing, cutting global greenhouse gas emissions, a global biofuel alliance, sustainable development and ending plastic pollution among others. Secondary Market Update: · Indian indices corrected marginally by Nifty 50 and Sensex gaining 2% at 19,638.30 and 1.04% at 65,508.32 respectively. · In September, FPI sold total equities worth Rs 14,768 Crores. · During September, despite of the global concerns and subdued overseas cues, Nifty 50 had reached a significant milestone of 20,000 points. · Since April, Nifty has surged by an impressive 17%, driven by inflow of over $18.90 Billion. Domestic institutional investors have also played a pivotal role, buying Rs 33,397 Crore worth of stock during this period. · The positives for the Indian market include increased government infrastructure spending and recovery in private capex and real estate cycle. · Improvement in Power Sector was because of healthy pickup in hydro generation. Overall power generation is estimated to have risen 9-10% on-year in September to 150-152 BU, after surging to a record high of 159 BU in August 2023. To cater to the rising demand for electricity, generators have increasingly been turning to the short-term power market. Equity Markets Aug-23 Sep-23 % Change BSE Sensex 64,831.41 65,508.32 1.04% Nifty 50 19,253.80 19,638.30 2.00% BSE 500 26,848.76 27,213.53 1.36% BSE Healthcare 27,894.79 28,497.52 2.16% BSE IT 31,528.24 32,144.61 1.95% BSE FMCG 18,464.75 18,583.57 0.64% BSE Metal 21,817.72 22,594.59 3.56% Primary Market Update:
Ahmedabad Chartered Accountant Journal October, 2023 461 There were 11 main board IPO in September, 2023 of Yatra Online Limited, Sai Silks (Kalamandir) Limited, Signature Global India Limited, Zaggle Prepaid Ocean Services Limited, Samhi Hotels Limited, EMS Limited, R R Kabel Limited, Jupiter Life Line Hospitals Limited, Rishabh Instruments Limited, Ratnaveer Precision Engineering Limited, and Vishnu Prakash R Punglia Limited against 6 IPO in August, 2023. There were3 SME IPOs in September,2023 as against 5 SME IPOs in August. Jupiter Life Line Hospitals Limited: About Established in 2007, Jupiter Hospital is a tertiary and quaternary healthcare hospital located in Thane, Pune and in Indore with Vishesh Jupiter Hospital established in 2020. The hospital hosts more than 1100+ beds across three cities. Funds The funds will be utilized towards the Utilization Repayment of debt amounting to Rs 510.40 Crores. It intends to be debt free using the IPO Proceeds. IPO The Rs 869 Crore IPO had a fixed Performance band price of Rs 735 per share. The IPO was subscribed nearly 64 times and listed at a 32% premium to issue price. Funds Mobilization by Corporates (Rs. In Crore) Particulars July-23 Aug-23 I. Equity Issues 11,000 15,698 a. IPOs (i+ii) 3,610 5,124 i. Main Board 3,175 4,646 ii. SME Platform 435 478 b. FPOs 0 0 c. Equity Rights Issues 373 1,342 d. QIPs/IPPs 5,690 7,400 e. Preferential Allotments 1,327 1,831 II. Debt Issues 54,269 48,836 a. Debt Public Issues 3,665 1,455 b. Private Placement of Debt 50,604 47,381 Total Funds Mobilized (I+II) 65,270 64,534 Mergers and Acquisitions (M&A) and Private Equity (PE) key deals: M&A: Nirma Ltd. acquires majority stake in Glenmark Lifesciences Ltd. Transaction: · Glenmark Pharmaceuticals Limited (GPL) has entered into a share purchase agreement with Nirma Limited to divest a 75% stake in Glenmark Lifesciences (GLS) at an EV of Rs 7500 Crores. · Current Promoter group to be public shareholders. About Glenmark Pharmaceuticals Limited: · A global research-led pharmaceutical company, Glenmark was established in 1977. · Glenmark Pharmaceuticals Ltd has presence across generics, Specialty and OTC business with operations in over 80 countrieswith 14 manufacturing facilities and 4 R&D centers spanning across GPL and GLS. About Glenmark Lifesciences Limited: · Glenmark Life Sciences (GLS) is a subsidiary of Glenmark Pharmaceuticals Ltd which launched the API business by setting up a manufacturing facility in 2001 to cater to the growth in the API segment across the world. · In 2019, the API manufacturing business of Glenmark was spun off into GLS, which will act as an independent company and focus on API business. About Nirma Limited: · Established in 1980 by Dr. Karsanbhai Patel, Nirma manufactures detergents, expanded its operations to soaps, chemicals and processing of minerals. It has plants in Searles Valley, USA, and Mehsana, Ahmedabad, Vadodara and Bhavnagar in Gujarat. · The largest soda ash manufacturer in India, Nirma acquired the California-based natural soda ash producer, Searles Valley Minerals Inc., in fiscal 2008, having manufacturing facilities in Argus, Trona and Westend in USA. · In fiscal 2022, on a standalone basis operating income stands at Rs 6480 Crore with a profit after Capital Markets
462 Ahmedabad Chartered Accountant Journal October, 2023 tax (PAT) of Rs 546 Crore compared to Rs 5073 Crore and Rs 532 respectively in the previous fiscal. Rationale: · Acquisition of GLS follows Nirma’s earlier acquisition of Stericon Pharma, a CDMO firm from PE firm InvAscent in March 2023. · Nirma earlier brought Emami’s cement business for around Rs 5500 Crore in 22020 and Lafenge India for around 900 Crore in 2016. · Glen Life will continue to operate API Business under new ownership. · Glen Life science had been put for sale for a while and PE Funds like ChrysCapital, Blackstone and Sekhmet had shown interest in the company. · Nirma bought the shares of Glen life at Rs 615 per share, at slightly lower than its last trading price. Nirma would be doing the mandatory open offer at Rs 631 per share. · Transaction was done at around 11 times EBITDA and 15.26 times P/E. · GPL will retire outstanding debt of Rs 4340 Crores. · GPL has agreed to buy API from GLS for a period of five years and hold its share for at least 1 year. PE: India Resurgence Fund acquires majority stake in Ivy Health and Lifesciences Pvt. Ltd. Transaction: · India Resurgence Fund (IndiaRF), promoted by Piramal Enterprises Limited and Bain Capital, Invested Rs. 525 Crores in Ivy Health and Life Sciences Private Limited (Ivy). · The hospital is estimated to be valued at Rs 1100 Crores. About India Resurgence Fund: · India Resurgence Fund (“IndiaRF”), promoted by Piramal Enterprises Limited and Bain Capital, invests capital from its $629mn maiden fund along with its co-investors. · IndiaRF looks to invest in businesses that have fundamentally strong growth prospects linked to consumption and infrastructure needs of India, and sectors that have strong standing in the global export market. About Ivy Health and Lifesciences Private Limited: · Founded by Mr. Gurtej Singh and Dr Kanwaldeep Kaur in 2008, Ivy has grown to become the largest corporate chain of NABH-certified hospital. These facilities have a combined capacity of nearly 800 beds. · Ivy offers comprehensive multi-specialty care and procedures for patients, not just from Punjab but also from neighboring areas of Himachal Pradesh, Haryana and Jammu. The network treats over 300,000 patients a year. · The group is focused on cardiology, cardiac surgery, neurosurgery, orthopedics and urology. Rationale: · IndiaRF will acquire Ivy’s National Accreditation Board for Hospitals & Healthcare Providers (NABH)- certified facilities located in Mohali, Amritsar, Khanna, Hoshiarpur, and Nawanshahr. · The agreement also includes an infusion of growth capital, aimed at enhancing the quality and scope of patient care services provided by Ivy’s existing facilities while expanding its reach to other cities in Punjab and neighboring regions. · Following the transaction, IndiaRF has become the majority shareholder of Ivy. · Indian healthcare Industry is witnessing growth that can be seen in the recent hospital deals that include Manipal Hospitals acquiring 84% stake in AMRI Hospitals for Rs 2400 Crores, Fortis acquired Gurugram-based Medeor Hospital for Rs 225 Crore, Singapore’s sovereign wealth fund Temasek Holdings bought a majority stake in Bengalurubased Manipal Health Enterprises for over $2 billion, Marengo Asia Healthcare backed by Samara Capital, Havells Family Investment Office and Godrej Family Investment Office, has acquired W Pratiksha Hospital, Gurugram. Acknowledgements: RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com) ❉ ❉ ❉ Capital Markets
Ahmedabad Chartered Accountant Journal October, 2023 463 IND AS 17 - LEASES - Annual Report 2022-23 V Mart Retail Limited The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset Company as a lessee The Company’s lease asset classes primarily comprise of lease for stores, ware house, office premises and plant and machinery and office equipment. The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. As practical expedient of Ind AS 116 “Leases”, the company has considered Covid-19-related rent concessions not to be lease modification; hence the income towards rent concession is recognised in “Other Income” in the statement of profit and loss account. Right-of-use assets The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use) except for leases existing as on the date of transition to IND AS 116 i.e. April 1, 2019. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any measurement of lease liabilities. The cost of right of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: • Stores, ware house and 9 to 15 years office premises • Plant and Machinery/ 3 years Office equipment If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies in section (l) Impairment of non-financial assets. Lease Liabilities The Company recognises lease liabilities at the present value of lease payments to be made over the remaining lease term effective April 1, 2019. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price CA. Pamil H. Shah [email protected] From Published Accounts
464 Ahmedabad Chartered Accountant Journal October, 2023 of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. In calculating the present value of lease payments, the Company uses its incremental borrowing rate because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is premeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. Short-term leases and leases of low-value assets The Company applies the short-term lease recognition exemption to its short-term leases of rented premises, Plant and machinery and office equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. Indigo Paints Limited The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Company as a lessee The Company applies a single recognition and measurement approach for all leases, except for shortterm leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. From Published Accounts i) Right-of-use assets The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: a. Leasehold land – upto 99 years b. Building – upto 5 years If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. ii) Lease Liabilities At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
Ahmedabad Chartered Accountant Journal October, 2023 465 In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. Deepak Fertilisers and Petrochemicals Corporation Limited A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a define period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified assets, the Company assesses whether: (i) the contact involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset. As a lessee, the Company recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right of use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right of use asset or the end of the lease term. The estimated useful lives of right of use assets are determined on the same basis as those of property and equipment. In addition, the right of use asset is periodically reduced by impairment losses, if any, and adjusted for certain measurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. Lease payments included in the measurement of the lease liability comprise the fixed payments, including in-substance fixed payments and lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option. The lease liability is measured at amortised cost using the effective interest method. The Company has elected not to recognise right of use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The Company has applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date. The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. ❉ ❉ ❉ From Published Accounts
466 Ahmedabad Chartered Accountant Journal October, 2023 CA. Kunal A. Shah [email protected] From the Government CA. Ashwin H. Shah [email protected] institution or any hospital or other medical institution, under clause (b) of the tenth proviso to clause (23C) of section 10, or sub-clause (ii) of clause (b) of sub-section (1) of section 12A of the Income-tax Act, 1961 (the Act), as the case may be, is required to be furnished in Form No. 10B / Form No. 10BB. Representations have been received regarding difficulties in filling details of persons who have made a ‘substantial contribution to the trust or institution’, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds fifty thousand rupees (as referred to in section 13(3)(b) of the Act). The matter has been examined with reference to the issue raised in paragraph 2 and it is hereby stated that for the purposes of providing details in (i) Form No. 10B in the Annexure, in row 41; and (ii) Form No. 10BB in the Annexure, in row 28, for the assessment year 2023-24: (a) the aforesaid details (that is, of person making substantial contribution ) may be given with respect to those persons whose total contribution during the previous year exceeds fifty thousand rupees; (b) details of relatives of such person, as referred to in (a) above may be provided, if available. (c) details of concerns in which such person, as referred to in (a) above, has substantial interest may be provided, if available. (Circular No 17, dated 09/10/2023) INCOME TAX 1) Amendment in Rule 114B - CBDT notifies changes in declaration form 60 for Non-PAN holders including Foreign Company to carry out transactions specified in Rule 114B These changes pertain to individuals without PAN or a foreign company involved in transactions outlined in Rule 114B of the Income Tax Rules, 1962. The CBDT has officially introduced the income tax Rules 2023 w.e.f. 10th October, 2023. Pursuant to the authority granted by clause (vii) of sub-section (1), clause ©of sub-section (5), and sub-section (6A) of section 139A, in conjuction with section 295 of the Income tax Act, 1961, the CBDT has introduced the subsequent regulations to modify the income tax Rules, 1962. (For full text and substituted form 60 refer Notification no 88, dated 10/10/2023) 2) CBDT extends due date for filing of Form 10B/ 10BB and Form ITR-7 for the Assessment Year 2023-24. The due date of furnishing Audit reports in Form 10B/Form 10BB for the Financial Year 2022-23, which is 30.09.2023 has now been extended by the Central Board of Direct Taxes (CBDT) to 31.10.2023. The due date of furnishing of Return of Income in Form ITR-7 for Assessment Year 2023-24, which is 31.10.2023 is also extended to 30.11.2023. (Press Release dated 18/09/2023) 3) Order under section 119 of the Income-Tax Act, 1961 – reg clarification of filing details in form 10B/Form 10BB Audit report in the case of a fund or trust or institution or any university or other educational
Ahmedabad Chartered Accountant Journal October, 2023 467 GOODS AND SERVICE TAX 1) Advisory: e-Invoice JSON download functionality Live on the GST e-Invoice Portal (GST updates 03/10/2023) GSTN is pleased to inform you that the e-Invoice JSON download functionality is now live on the GST Portal. To help you to navigate and make the most of this feature, some key steps are as below. To download the generated and received eInvoices in JSON format, please follow these steps: Step 1: Log in • Visit the e-Invoice Portal at https:// einvoice.gst.gov.in • Log in using your GST Portal credentials. Step 2: Navigate to Download E-invoice JSONs Section • On the main portal page, find the “Download E-Invoice JSONs” section. It has two tabs: “Generated” and “Received.” • The “Generated” tab is designed for eInvoices generated by you, while the “Received” tab is meant for e-Invoices received by you. Step 3: Search for e-Invoice (By IRN) • Click the “By IRN” tab to search for a specific e-Invoice. • Enter the IRN (Invoice Reference Number) or pick the Financial Year, Document Type, and Document Number. • Hit the “Search” button. Step 4: View and Download • Once you hit search, you will see the specific IRN. • To download the signed e-invoice, click “Download PDF” (available for a single active IRN). • Or, choose “DOWNLOAD E-INVOICE (JSON)” for a JSON format download. From the Government Step 5: Bulk Download (By Period) • Use the “For Period” tab to download eInvoices in bulk for a specific period. • Select the Financial Year and Month. • Click “DOWNLOAD E-INVOICE (JSON)” to get all e-Invoices in JSON format for that month. Step 6: Excel Format e-Invoice List (By Period) • To get an e-invoice list in Excel format for a specific period: • Visit the “List of IRNs” tab. • Select the desired Financial Year and Month. • Click “DOWNLOAD E-INVOICE (Excel).” Step 7: Downloading History The requested e-Invoices remain in downloading history for 2 days only. Post 48 hours fresh request needs to be initiated. 3. Additionally, this functionality allows to download all e-invoices reported across all six IRPs (Invoice Registration Portals), i.e. complete data. 4. Regarding accessibility, you can download e-Invoice JSON files for up to 6 months from the date of IRN generation. 5. To ensure a smoother experience for all users. It is requested that taxpayers schedule their downloads in a staggered manner during off peak hours and refrain from overwhelming the system with large requests during the initial days. 6. Moreover, please note that this functionality is also accessible via GSP (GST Suvidha Providers) through G2B (Government-toBusiness) APIs. Comprehensive manual and FAQ can be accessed at: https://tutorial.gst.gov.in/downloads/news/einvoice_json_download_functionality.pdf ❉ ❉ ❉
468 Ahmedabad Chartered Accountant Journal October, 2023 Channelising the future: How Consultancy firms are harnessing technology to reshape the industry In the fast-paced world of technological advancements, one would assume that sectors like artificial intelligence (AI) and machine learning (ML) are solely the playgrounds for tech giants. However, traditional consultancy firms like EY, KPMG, and Accenture are making a substantial pivot, investing billions into these future technologies. Their aim? To disrupt how they operate and profoundly influence the industries they consult for—banking, consumer goods, healthcare, and more. The Big Moves EY: A Case Study in Technological Investment EY’s recent unveiling of its AI platform, EY.ai, backed by a staggering $1.4 billion (approximately INR 12,000 Crore) investment, signifies more than just an embrace of future technologies. This move is a calculated strategic bet designed to amplify and transform its existing consulting products. The firm has a multipronged approach: 1. Employee Training: EY has taken an in-house approach to tech advancement with its EY.ai EYQ platform to cultivate a tech-savvy workforce. The goal is to build an army of professionals who are not only experts in consultancy but also proficient in leveraging AI and ML tools for data analytics, predictive modelling, and other tech-based solutions. This gives EY a competitive edge and ensures the firm is self-reliant in technological expertise. 2. Client Integration: EY Fabric, their existing technology acceleration platform, is set to integrate AI technology to serve its vast client base. This will allow EY to provide its clients with AI-powered CA. Rushabh Shah [email protected] solutions that can help them improve their operations and efficiency. 3. Sectoral Amplification: EY aims to break the siloed approach to AI adoption across various industries by providing comprehensive AI solutions. EY can provide AI solutions to clients in multiple sectors rather than just one or two. 4. Value-Addition Metrics: With frameworks like the EY.ai Maturity Model and EY.ai Value Framework, EY aims to quantify the benefits of AI adoption for organisations. This will help organisations understand the potential value of AI and how it can be used to improve their business. 5. Efficiency Tools: EY understands that adopting AI isn’t just about grandiose strategies; it’s also about solving real-world operational problems. Their collaboration with Microsoft to create the EY.ai Intelligent Payroll Chatbot is a testament to this understanding. This tool aims to handle approximately 50% of payroll queries, reducing the workload on human HR teams and allowing them to focus on more strategic tasks. Overall, this investment by EY is a sign of the firm’s commitment to innovation and its belief in the potential of AI to transform the consulting industry. Beyond EY: KPMG and Accenture EY is not alone in this technological transformation. KPMG has invested in its own KPMG Ignite platform, a suite of AI capabilities from natural language processing to predictive analytics. Accenture, too, has its AI-powered analytics engine, SynOps, designed to enhance human-machine collaboration. EY is not alone in its technological transformation. KPMG has invested in its own KPMG Ignite platform, a suite of AI capabilities from natural language
Ahmedabad Chartered Accountant Journal October, 2023 469 processing to predictive analytics. Accenture, too, has its AI-powered analytics engine, SynOps, designed to enhance human-machine collaboration. These investments are part of a larger trend among accounting firms to adopt new technologies to improve efficiency and accuracy. AI has the potential to automate many of the tasks that are currently performed by accountants, freeing them up to focus on more strategic work. Additionally, AI can analyse large amounts of data to identify trends and patterns that would be difficult for humans to spot. This can help accountants provide better insights to their clients. In addition to the above, AI can also improve communication with clients. For example, AI can be used to generate personalised reports tailored to each client’s specific needs. This can help accountants build stronger relationships with their clients and provide them with the information they need to make better decisions. Overall, AI is having a significant impact on the accounting profession. By automating tasks, analysing data, and improving communication, AI is helping accountants to be more efficient, accurate, and strategic. The Multiplying Effect on Industries EY’s focus on channelling AI for sectors like banking, consumer goods, and healthcare signifies a broader trend—consultancy firms are harbingers of technological adoption across industries. This means that consultancy firms are often the first to adopt new technologies and then help their clients adopt them. This can lead to several benefits, including faster datadriven decisions, optimised supply chains, and increased operational efficiency. For example, AI can analyse large amounts of data to identify trends and patterns that would be difficult or impossible to spot with human eyes. This can help businesses make better decisions about pricing, marketing, and product development. AI can also be used to automate tasks, which can free up employees to focus on more strategic work. Additionally, AI can be used to improve the efficiency of supply chains by optimising things like inventory levels and transportation routes. As a result, consultancy firms are playing a vital role in IT Corner helping businesses adopt new technologies and reap their benefits. The Ripple Effect on Chartered Accountants in India While the focus here has been on global consultancy giants, the implications are far-reaching for professionals in India, particularly Chartered Accountants. As consultancy firms adopt more techdriven solutions, the demand for professionals adept in both financial acumen and technological understanding will surge. This is because these professionals can help firms make better decisions by providing insights from data and analytics. In addition, they will also be able to help firms automate tasks and improve efficiency. As a result, Chartered Accountants in India will need to upskill, not just in accounting software but also in understanding AI and data analytics, to stay relevant. Ethical Considerations: AI as a Force for Good As AI increasingly integrates into consultancy services, ethical considerations around data privacy and algorithmic bias become more pertinent. While the push for tech adoption is unequivocal, consultancy firms must also champion the cause for ethical AI. Conclusion The investment by consultancy firms in future technologies is not just reshaping their operational model but setting the stage for a broader transformation across multiple industries. As EY, KPMG, and Accenture continue to invest and innovate, the onus is on professionals, especially Chartered Accountants in India, to adapt and evolve. In the words of Peter Drucker, “The best way to predict the future is to create it.” These consultancy firms are doing just that—creating a future where technology and human expertise go hand in hand for both their benefit and the benefit of the industries they serve. ❉ ❉ ❉
470 Ahmedabad Chartered Accountant Journal October, 2023 CA. Mayur H. Modha Hon. Secretary CA. Prakash B. Nandola Hon. Secretary 1. Glimpses of Previous Events. Day & Date Program Speaker Venue Thursday, 12th Awareness Programme for Organ Donation Shri Dilipbhai Deshmukh 123, Sardar Patel October,2023 Jointly with the Ahmedabad Branch of Dr. Tushar Patel Colony, ICAI WIRC of ICAI. Dr. Mehul Shah Bhavan Ahmedabad. Friday, 13th Book Launch: Charitable Trust - CA Atul Shah 123, Sardar Patel October,2023 Law & Practice by CA Atul Shah Colony, ICAI Bhavan Ahmedabad. Thursday, 19th Recent Judgements under CA. Adv. VIjay Patel Online on Zoom October,2023 the Direct Tax Laws 2. Forthcoming Event Day & Date Program Speaker Venue Monday, 06th A 3-Day Workshop on Tech-Upgradation CA Rushabh Shah CAAA Office, November,2023 for Chartered Accountants CA Margik Doshi 201, 2nd Floor to CA Tapas Ruparelia Darshak Building Wednesday, 8th November, 2023 Wednesday, 22nd Diwali Get-to-gather - Ratnamani Farm November,2023 and Party Plot, Opp. Star Bazaar, Jodhpur-Satellite, Ahmedabad Monday 8th 54th Residential Refresher Course To be Announced Hotel Hyatt Regency January 2024, to Nepal-The Land of Himalayas. Kathmandu, Nepal Friday 12th Hotel Hyatt Regency Kathmandu, Nepal January, 2024 Association News
Ahmedabad Chartered Accountant Journal October, 2023 471
472 Ahmedabad Chartered Accountant Journal October, 2023 Across 1. GST – TDS can be used by the ____________ for making the payment of the output liability. 2. The GST Tax payer can reclaim the earlier reversal of Input Tax Credit by 30th ___________ 2023. 3. The dividend declared by an Indian Company is now taxable in the hands of ___________. ACAJ Crossword Contest - 29 ❉ ❉ ❉ Notes: 1. The Crossword puzzle is based on this issue of ACA Journal. 2. Two lucky winners on the basis of a draw will be awarded prizes. 3. The contest is open only for the members of Chartered Accountants Association and no member is allowed to submit more than one entry. 4. Members may submit their reply either physically at the office of the Association or by email at [email protected] on or before 20-11-2023. 5. The decision of Journal Committee shall be final and binding. Prize Courtesy Winners of ACAJ Crossword Contest – 28 1. CA. Bishan Shah 2. CA. Virang Mehta ACAJ Crossword Contest 28 - Solution Across: Down: 1. Sanghi 4. Ten 2. Force 5. Thirty 3. Twenty 6. Fear Down 4. The best way to predict future is to _________ it. 5. India has handed over the G20 Presidency to ____________ 6. CA Association has recently come out with a publication titled - ________________ - Law and Practice. 5 6 1 2 4 3