APRIL 2021

1. All taxpayers having aggregate turnover up to Rs 5 crores, under QRMP Scheme (w.e.f. 01.01.2021 onwards), are required to furnish return on quarterly basis, along with payment of tax on monthly basis.

2. Persons availing QRMP Scheme are required to pay tax due, in each of the three months of the quarter, by depositing the due amount as discussed below.

3. Payment of Tax for first two months of a quarter (M1 & M2 ie for January and February month for Jan-March Quarter):

a. While generating the challan, taxpayers must select “Monthly payment for quarterly taxpayer” as reason for generating the challan.

b. They can choose either of the following two options to generate the Challan:

i.35% Challan (Fixed Sum Method): For taxpayers opting for this method, portal will generate a pre-filled challan in Form GST PMT-06, for an amount equal to 35% of the tax paid in cash, in the preceding quarter, if the return was furnished quarterly or equal to the tax paid i cash in the last month of the immediately preceding quarter, if the renturn was furnished monthly.

ii. Challan on a self-assessment basis (Self-Assessment Method): These taxpayers can pay tax due by considering the tax liability on inward and outward supplies and the input tax credit as available, in FORM GST PMT-06.
Note: The aforesaid options are not available for payment of tax for third month (M3) of the quarter to persons availing QRMP Scheme.

c. Payment of Tax for third month of a quarter (M3 ie for March month for Jan-March Quarter): For third month of the quarter (M3), taxpayers can click button ‘Create Challan’ in Payment Table 6 of Form GSTR-3B and file GST-PMT-06 Challan, for depositing any amount towards their tax liability.

Filing GSTR-1 (Q) for Jan-Mar 2021 under QRMP Scheme

The taxpayers under QRMP scheme have a facility to file Invoice Furnishing Facility (IFF) in first two months of the quarter and file Form GSTR-1 in third month of the quarter. As IFF is an optional facility it cannot be filed after the end date (13th of the month succeeding the IFF period). The document saved in IFF, where taxpayer has not filed by the end date, cannot be filed anymore. Hence taxpayers are requested to declare such document in the GSTR-1 for the quarter. Hence, before filing of GSTR-1 for Jan-Mar-2021 quarter, the taxpayer must ensure that:

1. Any saved but not Filed/Submitted IFF records for the first two months of the quarter i.e. month of Jan-2021 or Feb-2021 must be deleted using RESET button before filing GSTR-1 for Jan-Mar-2021 quarter. The deleted records should be added in GSTR-1 for Jan-Mar-2021 quarter after deleting the saved records from IFF. In future this may not be required as invoices already saved in any of the months on the quarter may be either deleted/moved to quarterly GSTR-1 by a functionality to be introduced shortly.

2. Any submitted but not filed IFF for the month of Jan-2021 or Feb-2021 must be filed before filing GSTR-1 for Jan-Mar-2021 quarter.

• Banking Regulations Act 1949
• Companies Act 2013
• Reserve Bank of India Act 1934
• Foreign Exchange Management Act 1999
• Payments and Settlement Act 2007
• Deposit Insurance and Credit Guarantee Corporation Act 1961

WHO CAN FORM A PAYMENTS BANK?

The following are considered to be eligible promoters for setting up a Payments Bank:
1) Existing non-bank Pre-Paid Payment Instrument (PPI) issuers authorised under the Payment and Settlement Systems Act, 2007 (PSS Act);
2) individuals / professionals
3) Non-Banking Finance Companies (NBFCs)
4) Corporate BCs
5) Mobile telephone companies
6) Super-market chains, companies, real sector cooperatives; that are owned and controlled by residents; and public sector entities
Existing PPI (Pre-paid Payment Instrument) holders can apply for conversion into a Payment Bank.
A promoter / promoter group can have a Joint Venture with an existing scheduled commercial bank and can take equity stake to the extent permitted under Section 19 (2) of the Banking Regulation Act, 1949.
A Government Entity after obtaining necessary permission.

ELIGIBILITY CHECK:

A) Entities should be Fit and Proper in order to be eligible to promote payment banks.
B) RBI would assess the ‘fit and proper’ status of the applicants and group entities on the basis of their past record of sound credentials and integrity; financial soundness and successful track record of at least 5 years professional experience or in running their businesses.

ALLOWED SCOPE OF ACTIVITIES:

scope of activities that a Payment Bank can engage in is restricted and are as follows:
1) ACCEPTANCE OF DEPOSITS: Acceptance of demand deposits, i.e., current deposits, and savings bank deposits from individuals, small businesses and other entities restricted to the tune of Rs 2,00,000 per individual customer (w.e.f. 8th April 2021). Such Deposits will be covered under the deposit insurance scheme of deposit insurance and credit guarantee corporation.
2) Payment Banks can issue ATM/ Debit Cards but cannot issue Credit Cards.
3) REMITTANCE SERVICES: Payments and remittance services are allowed through various channels like branches, ATM Machines, mobile banking etc.,
4) Issuance of PPIs as per instructions issued from time to time under the PSS Act
5) Internet Banking Services can be provided by complying with RBI Instructions on internet banking, information security, electronic banking, technology risk management and cyber frauds.
6) Functioning as Business Correspondent (BC) of another bank
7) Payments bank can accept remittances from multiple banks under a payment mechanism approved by RBI such as RTGS/NEFT/IMPS.
8) Handling Cross Border remittance transactions.
9) Undertaking other non-risk sharing simple financial service activities such as distribution of mutual fund units, insurance products, pension products, with prior RBI approval and complying with specific sectoral regulatory requirements.
10) Undertaking utility bill payments on behalf of customers and general public

PROCEDURE FOR APPLICATION:

a) Application in prescribed form with Business Plan and other requisite information should be submitted to the Department of Banking Regulation, Mumbai.
b) The applications will be initially screened by RBI to ensure prima facie eligibility of the applicants. RBI may apply additional criteria to determine the suitability of applications, in addition to the prescribed ‘fit and proper’ criteria.
c) Thereafter an External Advisory Committee (EAC) comprising eminent professionals like bankers, chartered accountants, finance professionals, etc. will evaluate the applications.
d) The EAC will reserve the right to call for more information as well as have discussions with any applicant/s and seek clarification on any issue as may be required by it. The EAC will submit its recommendations to RBI for consideration. The decision to issue an in-principle approval for setting up of a bank will be taken by RBI. RBI’s decision in this regard will be final.
e) The validity of the in-principle approval issued by RBI will be eighteen months from the date of granting such in-principle approval and would thereafter lapse automatically. Therefore, the bank will have to be set up within eighteen months of grant of in-principle approval.
f) After issue of the in-principle approval for setting up of a bank, if any adverse features are noticed subsequently regarding the promoters or the companies/entities with which the promoters are associated and the group in which they have interest, the RBI may impose additional conditions and if warranted, it may withdraw the in-principle approval.
g) The names of applicants for bank licences will be placed on the RBI website on receipt of the applications. The names of successful applicants will also be placed on the RBI website.

Amendments to Schedule III

MCA has recently on 24th of March, 2021 issued a notification amending Schedule III – General Instructions for Preparation of Balance sheet & Statement of Profit and Loss of a Company. The amendment includes series of changes in the way the balance sheet and profit and loss must be prepared and introduced plenty of disclosures must be made to the financial statements of the Company. The said notification is applicable with effect from 1st April, 2021 and hence these amendments have to be given effect to the financial statements prepared for the financial year 2021-22.

In this article, we will cover the major amendments brought in for preparing the financial statements and the new disclosure requirements.

1. Shareholding of promoters:

Currently a company is required to disclose only the details of shareholders holding more than 5% of the share capital. This amendment has made it mandatory for the companies to disclose the shareholding percentage and changes during the year of all the promoters. A promoter shareholder is defined in the companies act as follows:

“promoter” means a person—

(a) who has been named as such in a prospectus or is identified by the company in the annual return referred to in section 92; or
(b) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or
(c) in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act:
Provided that nothing in sub-clause (c) shall apply to a person who is acting merely in a professional capacity;

2. Ageing of Trade payables and Trade Receivables:

Companies must disclose an ageing schedule for both Trade payables and Trade receivables in their financial statements. The schedule for payables must disclose the payable due to their vendors for a period of less than 1 year, due for 1-2 years, due for 2-3 years and due for more than 3 years with the payables classified into payable to MSME, to others, disputed dues for MSMEs and disputed dues for others. The trade receivable ageing schedule must disclose dues outstanding for less than 6 months, 6 months to 1 year, 1-2 years, 2-3 years, More than 3 years and the receivables are classified into undisputed trade receivables – considered good, undisputed trade receivables – considered doubtful, disputed trade receivables – considered good, and disputed trade receivables – considered doubtful.

3. Title deeds of Immovable property not held in the name of the Company:

Companies shall provide the details of immovable properties whose title deeds are not in the name of the Company and also where such immovable property is jointly held with others, details are required to be given to the extent of Company’s share.