Changes in payment and set off rules under GST from 1st February 2019
On and from 1st February 2019, The Order for availing the set off of ITC has been changed and new Sections 49A & 49B under The CGST Act 2017 have been made effective. Let us analyse the impact of the same on Trade & Industry –
The Amendment –
- 21. After section 49 of the principal Act, the following sections shall be inserted, namely:–
“Utilisation of input tax credit subject to certain conditions.
“49A. Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment.
I also would like to bring to your notice circular of IBBI dated 17th October 2018 which mandates as under :
“In view of the above, every valuation required under the Code or any of the regulations made there under is required to be conducted by a ‘registered valuer’, that is, a valuer registered with the IBBI under the Companies (Registered Valuers and Valuation) Rules, 2017. It is hereby directed that with effect from 1st February, 2019, no insolvency professional shall appoint a person other than a registered valuer to conduct any valuation under the Code or any of the regulations made there under.”
Hence the Valuation Reports under Companies Act, 2013 after 1st Feb 2019 has to be obtained from Registered Valuers registered with IBBI only.
Usually Valuations reports are required for following:
a. Issue of Shares & Securities
b. Fair Value Determination as per IND-AS / IFRS
c. Valuation of Intangibles
d. Related Party Transactions
e. Issue of Shares for Non-cash consideration
f. Valuation of Goodwill and Intangibles.
g. Fairness opinion for Scheme of Amalgmation & Arrangement
h. ESOP Valuation
i. Valuations for special purposes such as disputes, exits, etc.
As per Companies Act 2013, following sections requires valuation from Registered Valuers in following areas:
|1||62(1)C||Valuation report for Further Issue of Shares||If any company proposes to issue new shares (except a rights issue to existing shareholders or to employees under employees stock options), the price of such shares should be determined by the valuation report of a Registered Valuer.|
|2||192(2)||Valuation of Assets Involved in Arrangement of Non cash transactions involving Directors||In case of sale or purchase of any asset involving a company and the directors of the company (or its holding, subsidiary or associate company) or a person connected with the Director for consideration other than cash, the value of the assets has to be calculated by a Registered Valuer.|
|3||230(2)(c)(v||Valuation of shares, property and assets of the Company under a scheme of Corporate Debt Restructuring||In case of a compromise or arrangement between members (such as in mergers or amalgamations) or with creditors (such as in corporate debt restructuring), a valuation report in respect of shares, property or assets, tangible and intangible, movable and immovable of the company, or a swap ratio report by a Registered Valuer is required.
In case of mergers, the directors are also required to circulate a report to members specifying, inter alia, any
|4||230(3)||Valuation report along with Notice of creditors/shareholders meeting –Under scheme of compromise/Arrangement||In case of a compromise or arrangement between members (such as in mergers or amalgamations) or with creditors, a valuation report in respect of shares, property or assets, tangible and intangible, movable and immovable of the company, or a swap ratio report by a Registered Valuer is required.|
|5||232(2(d)||The report of the expert with regard to valuation, if any, would be circulated for meeting of creditors/Members||Same as above|
|6||232(3)(h)||The Valuation report to be made by the tribunal for exit opportunity to the shareholders of transferor Company –Under the scheme of Compromise/Arrangement in case the Transferor company is Listed Company and the Transferee-company is an unlisted Company||Same as above|
|7||236(2)||Valuation of equity shares held by the Minority Share Holders||In case an acquirer or person acting in concert with the acquirer acquire 90% or more of the equity capital in a company, they can offer to the minority shareholder (or the minority shareholder can offer to the acquirer) to acquire the minority shareholding at a valuation determined by the Registered Valuer.|
|8||281(1)||Valuing assets for submission of report by liquidator||A valuation of assets of the company prepared by the Registered Valuer is required in case of winding up, voluntarily or otherwise.|