Checklist of documents for directorship in Indian companies by persons resident outside India

11th January, 2023

In the recent years, the Government of India has liberlised its policies for the Foreign Investors whereby they can come to India and invest in various sectors. Presently every sector except a few like railway, defence, agriculture, real estate etc are allowed by the Government, where Foreign Direct Investment can be made through automatic/ approval routes. However, by making FDI, a Person Resident Outside India can only become the shareholder, but theday to days affairs of the company shall lie with the Directors only. So while making investment the investor would like to be part of the Board of Directors of the company. Hence, the Ministry of Corporate Affairs have enacted the various provisions under the Companies Act, 213 through which Persons Resident Outside India can be allocated Directorship in Indian Companies by complying with the Companies Act, 2013 (hereinafter referred as "The Act") read along with the Companies (Appointment and Qualifications of Directors) Rules, 2014 (hereinafter referred as "The Rules")

Corporate Laws

Economists bat for hike in tobacco taxation for achieving Modi's USD 5 trillion economy vision

New Delhi: A substantial hike in tax on all tobacco items and stronger laws will not only bring the best out of human capital by ensuring better health of citizens, but also help in achieving Prime Minister Narendra Modi's vision of a five trillion dollar economy by 2025, experts have asserted. Noting that the health care burden due to tobacco consumption in India is around 1.04 per cent of GDP, pushing many into poverty, Arvind Mohan, Professor and Head, Department of Economics, University of Lucknow said a substantial increase in tax on these lethal items will close the gap.

Speaking at a webinar, he echoed views of the World Health Organisation (WHO) as well as many other international bodies like World Bank that tobacco taxation is an efficient tool, reducing tobacco consumption faster than any other single measure.

General

Dubai ends 30 per cent tax on alcohol sales, fee for liquor licenses

2nd Janurary, 2023

Dubai ended its 30 per cent tax on alcohol sales in the sheikhdom and made its required liquor licenses free to obtain, ending a long-standing source of revenue for its ruling family to apparently further boost its tourism to the emirate. The sudden New Year's Day announcement, made by Dubai's two state-linked alcohol retailers, came apparently from a government decree from its ruling Al Maktoum family. However, government officials did not immediately acknowledge the decision and did not respond to questions from The Associated Press

International Tax

Tax implications of mutual fund investments

02 January, 2023

Investing in mutual funds is as good as investing in the underlying security itself. So, the taxation aspect of each scheme depends upon the asset classes in which the scheme invests. Like any other investment, it is important to consider the tax implications of mutual fund investments before making them.

For taxation purposes, mutual fund schemes can be categorised into two main types—equity-oriented schemes and non equity-oriented schemes. The former are those that invest at least 65% and above of their net assets in shares of listed Indian companies. Schemes that invest less than 65% or don’t invest in equity are non-equity schemes, such as liquid funds, debt funds, gold funds, etc. Both types are taxed differently.

General

CA Institute open to allow UK, Canadian professionals provide audit services in India

02 January, 2023

Central Council approves draft market access offer of India in auditing and accounting services.The CA Institute is now open to offer market access in auditing services to audit and accounting professionals from the UK and Canada. 
The Central Council of the Institute of Chartered Accountants of India (ICAI) has at its recent meeting approved a draft market access offer from India in the ongoing  negotiations on trade in services with its FTA Partners – The UK and Canada.
 

Audits

Checklist on Disclosure requirements under AS 3: Cash Flow Statements

02 January, 2023

The economic decisions of users of financial statements require an evaluation of the ability of an enterprise to generate cash and cash equivalents and the timing and certainty of their generation. AS 3, Cash Flow Statements, deals with the provision of information about historical changes in cash and cash equivalents of an enterprise by means of a cash flow statement which classifies cash flows during the period from operating, investing and financing activities.
 
 

Accounting

CA Institute revises implementation guide on Auditing Standard on ‘audit documentation’

02 Janurary, 2023

The CA Institute has come up with a revised implementation guide to the auditing standard (SA230) on ‘audit documentation’. 

This has been done to provide practical implementation guidance to auditors on this standard. The implementation guide was last issued in 2018. 

Audits

US SEC heightening scrutiny of auditors' crypto work : report

31st December, 2023

The US Securities and Exchange Commission (SEC) is heightening the scrutiny of the work audit firms do for cryptocurrency companies, a senior official of the regulator told the Wall Street Journal. "We're warning investors to be very wary of some of the claims that are being made by crypto companies," said Paul Munter, SEC's acting chief accountant in an interview with the journal.The SEC did not immediately respond to a Reuters request for comment on the report.
The development comes as the implosion of FTX has rippled across the industry, hobbling liquidity at firms with exposure to what was once one of the world's biggest crypto exchanges, and has prompted investigations by regulators in several countries.
The development comes as the implosion of FTX has rippled across the industry, hobbling liquidity at firms with exposure to what was once one of the world's biggest crypto exchanges, and has prompted investigations by regulators in several countries.
Last month, FTX filed for US bankruptcy protection and its founder Sam Bankman-Fried resigned as chief executive, after rival exchange Binance walked away from a proposed acquisition.

US Accounting