Source Business Line
Private companies excluded from mandatory secretarial audit
KR SRIVATS
ICSI to write to Ministry for inclusion
NEW DELHI, APRIL 1:
The Company Secretaries' Institute wants secretarial audit to be treated on par with the internal auditor appointment norms spelt out in the final rules under the new company law.
The new company law had stipulated mandatory secretarial audit for all listed companies and other classes of companies to be specified by the rules.
The Corporate Affairs Ministry on Monday issued new rules that stipulate secretarial audit for every public company with paid-up capital of ₹50 crore or more or every public company having a turnover of ₹250 crore or more.
The draft rules had proposed mandatory secretarial audit for public companies with a paid-up capital of ₹100 crore or more. There were no turnover criteria for public companies. For secretarial audit, the interesting part is that rules do not cover private companies. This would mean that such an audit would not be mandatory for these companies.
But the Companies Secretaries' Institute is keen that large private companies be included within the scope of mandatory secretarial audit.
"We are disappointed that private companies have not been brought under mandatory secretarial audit. Exclusion of private companies may not have been the intention of the Corporate Affairs Ministry," R Sridharan, President of the Institute of Company Secretaries of India (ICSI), told Business Line.
ICSI will soon write to the Corporate Affairs Ministry requesting that secretarial audit be treated on the same footing as internal auditor appointment norms in the case of private companies, he added.
The effort should be to bring large private companies within the mandatory secretarial audit fold," Sridharan said.
The draft rules had recommended that all non-listed companies with paid-up capital of ₹100 crore and above be brought under mandatory secretarial audit
However, the Company Secretaries Institute wanted the secretarial audit trigger to be based on multiple factors including bank borrowings of the company.
But the Corporate Affairs Ministry had settled for a criteria based on turnover and paid-up capital only.
(This article was published on April 1, 2014)
Source Business standard
| Bank proposes no minimum balance penalty |
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New Delhi/ Mumbai, 1 April Customers might not be required to pay for non- maintenance of a minimum balance in a bank but could have to pay additional charges for use of other services in such cases, such as an account statement or ATM withdrawals or cheque book issuance. In its bi- monthly monetary policy review on Tuesday, the Reserve Bank of India ( RBI) said instead of penal charges for non- maintenance of a minimum balance in ordinary savings bank accounts, banks should limit the services available on such accounts, to those available to basic accounts. While the decision on penalty removal is yet to be finalised, senior bankers said this would mean an increase in the charges paid by customers for transactions of all kinds. Further, RBI said banks should restore the services when the balances improve to the minimum required level. Aditya Puri, managing director, HDFC Bank, said: " The consumer will end up paying more in the alternative. Let us say the minimum balance is ₹ 10,000 and we earn four per cent on it. For ₹ 400, we give you cheque books for the full year, ATM transactions, we give you the account balance and the statements. Break- even for the bank to provide those services is ₹ 30,000. If you have consumer interest in mind, you will not push this because the alternative is, then you are charged for these services. If I start charging you for these, you will end up paying more. It is implied that if you dont charge on non- maintenance of minimum balance, you are authorised to charge on the transaction." However, this proposal is still under consideration. Puri explained this was a suggestion by RBI and the Indian Banks Association will explain its viewpoint to the regulator. He noted a bank was also there to make a profit, not give free service. "This is a cost. To break even, to provide you the services, I actually need a minimum balance of ₹ 20,000," he said. KR Kamath, chairman and managing director, Punjab National Bank, said for a basic account, the clear instructions are that you cannot charge for not maintaining the balance. He said the direction is to have an entire set of accounts where it is defined that they wont be charged for non- maintenance of balance but would only be entitled to certain services. Soumya Kanti Ghosh, chief economic advisor — economic research department, State Bank of India (SBI), said, " It will be a decision by individual banks how they take the decision of non– maintenance of minimum balance. Since the policy suggests that the banks should limit the services to such accounts, so, if that is the case, there is a possibility that there is a re- look at the charges for things such as charges for number of ATM transactions etc. The RBI still needs to clarify what it means by limit services." Rupa Rege Nitsure, chief economist, Bank of Baroda, said a penalty for non- maintenance of a minimum balance was more relevant from the viewpoint of private sector and foreign banks, which charge a huge penalty or even make accounts defunct if a customer did not maintain aminimum balance. " If we want more people to use banking facilities and talk about financial inclusion, one cannot be so harsh on customers," she said. According to the head of retail operations of a public sector bank, these charges are levied to recover the operational costs incurred by banks for maintaining the accounts. "Even if there is just ₹ 100 in such accounts, in our books it is still an account and we have to maintain it. There is no benefit except paying the minimum four per cent interest. Following computerisation, the cost for maintaining such accounts has come down but still it is an expense for banks. The penalty was intended to gradually weed out such accounts, he said. The central bank also said that in the interest of their consumers, banks should consider allowing their borrowers the possibility of pre- paying floating rate term loans without any penalty. "The consumer will end up paying more in the alternative" ADITYA PURI MD & CEO, HDFC Bank |
Source Business line
Being rich may get more 'taxing' OUR BUREAU
Direct Taxes Code Bill not in favour of raising lowest income tax slab NEW DELHI, APRIL 1: The country's super-rich may end up paying more tax on their earnings if the recommendations in the draft Direct Taxes Code Bill, 2013, become a reality. A week ahead of the general elections, the Centre has suggested imposing additional tax on the super-rich, while rejecting a proposal to raise the lowest slab of income tax to ₹3 lakh annually. The draft Direct Taxes Code Bill, 2013, was put in the public domain on Tuesday. The Government cannot make any legislative changes to the tax structure but has prepared the base for the new Government to usher in a new income-tax regime. The original Direct Taxes Code Bill, 2010, will lapse with the end of the 15th Lok Sabha and the new Government will have to initiate the process for the introduction of the Bill. "With a view to maintain overall progressivity in levy of income tax, the revised Code provides for a fourth slab for individuals, Hindu Undivided Families (HUFs) and artificial juridical persons. In their case, if the total income exceeds ₹10 crore, it is proposed to be taxed at the rate of 35 per cent," the draft said. There is an additional surcharge of 10 per cent on income exceeding ₹1 crore. This was to end on March 31, but the interim Budget extended this to the current fiscal year, too. However, the Finance Ministry has not accepted a recommendation from the Standing Committee on Finance, headed by senior BJP leader Yashwant Sinha, on revising the tax slabs. The Committee favoured revising the slab with no tax on income up to ₹3 lakh (now ₹2 lakh), 10 per cent on income between ₹3 lakh and ₹10 lakh (₹2-5 lakh), 20 per cent on ₹10-20 lakh (₹5-10 lakh) and 30 per cent for income beyond ₹20 lakh (now ₹10 lakh and above). "The recommendation is not acceptable as it will result in huge revenue loss. The total revenue loss on account of recommended changes in personal income tax slabs and revenue of cess worked out to ₹60,000 crore," the draft said. The draft has retained the 'controversial' dividend taxation provision. There is a 10 per cent additional tax on the recipient if the total dividend in his hand exceeds ₹1 crore. Under the present regime as well as the one proposed by the original DTC in 2010, dividend distribution tax is to be levied at the rate of 15 per cent. This, as the draft argues, favours high net-worth taxpayers who only pay a fraction of their earnings as tax on their investments in the capital market. Interestingly, provisions such as tax on the super-rich and on dividend were part of the official amendments to the Direct Taxes Code Bill brought before the Cabinet last August. But due to strong objections on these two provisions, the Cabinet deferred considering official amendments in the Bill. (This article was published on April 1, 2014) |
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