Big Changes by Ministry of Company Affairs wef 1st April 2021 to enhance transparency

Schedule III of the Companies Act 2013 contains the general instructions for preparation of the Balance Sheet and Statement of Profit and Loss of a Company.

Following are the changes made in the financials/ notes to accounts on account of amendments in Schedule III brought about by MCA:

1. Now companies have to round off the figures appearing in the financial statements, hitherto it was optional. Further, the criteria for rounding off shall be based on “total income” in place of “turnover”.

2. Company shall disclose the Shareholding of Promoters.

3. Current maturities of Long term borrowings shall be disclosed separately.

4. Trade Payables ageing schedule to be given.

5. Trade Receivables ageing schedule to be given.

6. Security deposits shall not be disclosed under ‘Long term loans and advances’ but disclosed under ‘Other non-current assets’.

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7. The company shall disclose the reason for the utilization of funds for purposes other than for which they were borrowed and shall also disclose the purposes for which the funds were utilised.

8. Company needs to disclose if the books of accounts are tallied with the quarterly or monthly returns filed with a banker in cases where the company has borrowed funds from banks on the basis of securities of current assets, or else a separate reco statement needs to be provided.

9. The company shall provide the details of all the immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held and where such immovable property is jointly held with others, details are required to be given to the extent of the company’s share.

10. In cases where revaluation has been done in the case of Property Plant and Equipment, the company shall disclose if the valuation was done by a registered valuer.

 

SEBI – Approved amendments in SEBI LODR Regulations Board Meeting


11. Disclosures to be made where Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and related parties (loans given to promoters as a % of total loans)

12. For Capital-work-in progress, an ageing schedule shall be given

13. For Intangible assets under development, an ageing schedule to be given.

14. Disclosure of any proceedings initiated or pending against the company for holding any Benami property under the Benami Transactions (Prohibition)Act, 1988 to be made.

15. Where a company is a declared wilful defaulter by any bank or financial institution or other lender, details to be given.

16. Disclosure of any transactions with companies struck off

17. Where any charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period, details and reasons thereof shall be disclosed.

18. Following Ratios to be disclosed:

(a) Current Ratio,(b)Debt-Equity Ratio,(c)Debt Service Coverage Ratio, (d) Return on Equity Ratio,(e) Inventory turnover ratio,(f)Trade Receivables turnover ratio, (g) Trade payables turnover ratio, (h) Net capital turnover ratio, (i) Net profit ratio, (j)Return on Capital employed, (k) Return on investment
(xv) Disclosure of Utilisation of Borrowed funds and share premium to be given
An explanation is required if there’s a change of more than 25% as compared to the preceding financial year.

19. Further disclosures shall be made where the company has received funds from any persons or entities including foreign entities to further lend or invest or provide any guarantee, security to third parties.

20. Where a scheme of arrangement has been approved, disclosure shall be made of the effect of the same on the books of accounts and any deviation from the accounting standards for the same.

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Why Composition Scheme In GST (Authoritative)

What is the importance of Composition Scheme under GST?

Creation conspire is an elective tax assessment exact under GST. It is a discretionary plan acquainted with advantage the little citizens. This will spare them from the hustle of long expense compliances like support of definite records, the documenting of different returns month to month and so on. Additionally, the strategies as far as the issue of solicitations and so on are exceptionally negligible and improved.

Under this plan, an enrolled citizen would be required to pay tax(GST) on their turnover dependent on the endorsed rate. The assessment rate is nearly lower than those recommended for ordinary citizens.

Is there any limit to opt for composition scheme?

Truly, a provider having turnover upto Rs 1 Cr in the former budgetary year can select the arrangement assess require in the present year. For informed classes of states, the limit is Rs 75 lakhs.

What is the eligibility criteria for composition scheme?

The individual having a turnover above Rs 1 crore (when all is said in done) or above Rs. 75 lakh (for informed states) can’t settle on arrangement plot. Aside from this, the accompanying classes of providers can’t profit the advantage of composition

  • An individual making interstate supplies
  • An individual making the supply of administrations with the exception of those providing nourishment and refreshments like lodgings, open air cooking and so forth
  • Provider moving through E-Commerce administrator
  • A maker of following advised products, for example, Ice cream, Pan Masala, tobacco and so on
Goods Tariff Item / Chapter
Ice cream including other ice (with or without cocoa) 2105 00 00
Pan Masala 2106 90 20
Tobacco and its manufactured substitutes 24

 

  • An individual Not taxable under CGST/SGST/UTGST Act.
  • Easygoing Taxable Person or Non-Resident Taxable Person
  • Individual acquiring products from unregistered provider with the exception of on the off chance that it has officially paid GST on such supply under Reverse Charge.

What are the GST rates under the composition scheme?

In Goods and Service Tax fluctuated arrangement rates have been endorsed for various providers. Coming up next are the expense rates under piece conspire as changed by Notification Number 1/2018 – Central duty

Manufacturer Trader Food and beverages suppliers (except alcoholic liquor) Tax rate to be charged on Turnover of
CGST 0.5% 0.5% 2.5% State
SGST / UTGST 0.5% 0.5% 2.5% Taxable Supplies in State
Aggregate Tax 1% 1% 5% State

 

How a composite merchant can be recognized from an ordinary tax payer?

A composite provider has an alternate and decreased arrangement of consistence when contrasted and the ordinary citizen. The equivalent can be better comprehended through an examination as under

Composite Supplier Normal Supplier
Rate of GST A lower tax of rate up to the maximum of 5% has been prescribed. A higher rate of tax upto 28% has been notified in this case.
Input Tax Credit Cannot take benefit of ITC on inward supply (purchases) ITC can be availed to set off the output tax liability
Pass on the credit and incidence of the tax The composite supplier cannot pass on the credit of tax to the recipient. The normal taxpayer can pass on the credit as well as incidence of taxes payable onto the recipient
Annual Return Annual summary of the transaction is to be filed in form GSTR 9A Annual summary of the transaction is to be filed in form GSTR 9
Monthly / Quarterly Returns One quarterly return i.e. GSTR 4 needs to be filed by composition taxpayer Three monthly returns need to be filed by a normal supplier namely GSTR 1, GSTR 2 & GSTR 3/ 3B
Inter-State Supply Cannot make interstate supply Can make interstate supply without restrictions

 

Disadvantages of composite scheme?

Every single beneficial thing accompany a cost so does Composition plot. With its complex advantages creation has the accompanying drawbacks

  • No Input Tax Credit is accessible
  • Can’t issue assessable solicitations which implies the weight of arrangement charge can’t be passed onto the customer
  • Can’t give impose credit advantage to other people
  • Nothing more than a bad memory will lie in the supply of organization citizen which he acquired before going into the plan of piece

In which circumstances composition levy can be pulled back?

In the event that a citizen falls in any of the underneath referenced criteria, it will result in discontinuance of organization collect for him

  • In the event that the turnover surpasses the edge of Rs 1 Cr or 75 Lakhs in the first budgetary Year.
  • On making internal supplies (buys) frame an unregistered individual and not making good on government expense under RCM on the equivalent.
  • In the event that the composite citizen begins making the interstate outward supply.
  • Accepting enrollment as CTP (Casual Taxable Person) or NRTP (Non-Resident Taxable Person)
  • Embraces supply of products which are outside the domain of GST law.
  • On making supply thorugh internet business administrator who is required to gather impose at source (TCS u/s 52 of CGST Act, 2017)
  • On the off chance that the creation citizens get occupied with making the supply of told merchandise, for example,

Details on Composition Scheme In GST

What is the importance of Composition Scheme under GST?

Structure plot is an elective tax assessment collect under GST. It is a discretionary plan acquainted with advantage the little citizens. This will spare them from the hustle of long duty compliances like upkeep of itemized records, the documenting of various returns month to month and so on. Additionally, the systems regarding the issue of solicitations and so on are exceptionally insignificant and improved.

Under this plan, an enrolled citizen would be required to pay tax(GST) on their turnover dependent on the endorsed rate. The duty rate is nearly lower than those endorsed for typical citizens.

Is there any threshold limit to choose composition scheme?

Indeed, a provider having turnover upto Rs 1 Cr in the first monetary year can pick the creation assess exact in the present year. For informed classifications of states, the limit is Rs 75 lakhs.

 

composition scheme under GSTWhat is the eligibility criteria for threshold limit?

The individual having a turnover above Rs 1 crore (as a rule) or above Rs. 75 lakh (for advised states) can’t pick sythesis conspire. Aside from this, the accompanying classes of providers can’t profit the advantage of organization

  • An individual making interstate supplies
  • An individual making the supply of administrations with the exception of those providing sustenance and refreshments like lodgings, open air cooking and so on
  • Provider moving through E-Commerce administrator
  • A producer of following informed products, for example, Ice cream, Pan Masala, tobacco and so on
Goods Tariff Item / Chapter
Ice cream including other ice (with or without cocoa) 2105 00 00
Pan Masala 2106 90 20
Tobacco and its manufactured substitutes 24
  • A person Not taxable under CGST/ SGST/ UTGST Act.
  • Casual Taxable Person or Non-Resident Taxable Person
  • Person purchasing goods from unregistered supplier except in case it has already paid GST on such supply under Reverse Charge.

What are the GST assess rates under the arrangement plot?

In Goods and Service Tax shifted organization rates have been recommended for various providers. Coming up next are the duty rates under organization conspire as altered by Notification Number 1/2018 – Central tax

Manufacturer Trader Food and beverages suppliers (except alcoholic liquor) Tax rate to be charged on Turnover of
CGST 0.5% 0.5% 2.5% State
SGST / UTGST 0.5% 0.5% 2.5% Taxable Supplies in State
Aggregate Tax 1% 1% 5% State


How a composite merchant can be recognized from an ordinary citizen?

A composite provider has an alternate and diminished arrangement of consistence when contrasted and the ordinary citizen. The equivalent can be better comprehended through a correlation as under

Composite Supplier Normal Supplier
Rate of GST A lower tax of rate up to the maximum of 5% has been prescribed. A higher rate of tax upto 28% has been notified in this case.
Input Tax Credit Cannot take benefit of ITC on inward supply (purchases) ITC can be availed to set off the output tax liability
Pass on the credit and incidence of the tax The composite supplier cannot pass on the credit of tax to the recipient. The normal taxpayer can pass on the credit as well as incidence of taxes payable onto the recipient
Annual Return Annual summary of the transaction is to be filed in form GSTR 9A Annual summary of the transaction is to be filed in form GSTR 9
Monthly / Quarterly Returns One quarterly return i.e. GSTR 4 needs to be filed by composition taxpayer Three monthly returns need to be filed by a normal supplier namely GSTR 1, GSTR 2 & GSTR 3/ 3B
Inter-State Supply Cannot make interstate supply Can make interstate supply without restrictions.


What are the demerits of composition scheme?

Every single beneficial thing accompany a cost so does Composition plot. With its complex advantages structure has the accompanying detriments

  • No Input Tax Credit is accessible
  • Can’t issue assessable solicitations which implies the weight of structure charge can’t be passed onto the customer
  • Can’t give impose credit advantage to other people
  • Nothing more than trouble will lie in the supply of creation citizen which he acquired before going into the plan of organization

In which circumstances composition scheme can be pulled back?

In the event that a citizen falls in any of the underneath referenced criteria, it will result in end of structure require for him

  • In the event that the turnover surpasses the edge of Rs 1 Cr or 75 Lakhs in the former money related Year.
  • On making internal supplies (buys) frame an unregistered individual and not making good on government expense under RCM on the equivalent.
  • In the event that the composite citizen begins making the interstate outward supply.
  • Accepting enlistment as CTP (Casual Taxable Person) or NRTP (Non-Resident Taxable Person)
  • Attempts supply of products which are outside the domain of GST law.
  • On making supply thorugh online business administrator who is required to gather impose at source (TCS u/s 52 of CGST Act, 2017)
  • On the off chance that the sythesis citizens get occupied with making the supply of told products, for example, Ice Cream, Pan Masala, Tobacco etc.

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