Corporate Governance

SPICe+ A Step in The Right Direction

The Chartered Accountant • April 2020 • pp. 74–76 (Journal pp. 1342–1344)

CA. Chandrashekhar Vasant Chitale

The author is a member of the Institute. He can be reached at eboard@icai.in.

SPICe+ is an integrated web form offering 10 services by 3 Central Government Ministries and Departments (Ministry of Corporate Affairs, Ministry of Labour and Department of Revenue in the Ministry of Finance and One State Government, Maharashtra). The integrated web form is instrumental in saving many procedures, time and cost for Starting a Business in India. SPICe+ is part of various initiatives and commitment of Government of India towards Ease of Doing Business (EODB). Read on…

Ease of Doing Business

Government of India is very keenly following the benchmarks set by the Doing Business Project of the World Bank to improve the business environment in the country. India is a nation of possibilities and we want to explore and avail every opportunity to promote development led growth in the country.

Hon’ble Prime Minister Narendra Modi, in a tweet, has emphasised on the need to focus on last mile delivery, simplifying systems and procedures, which will improve both ‘Ease of Doing Business’ and ‘Ease of Living’. He stated that we are devoting all possible efforts to further improve our ‘Ease of Doing Business’ rankings.

Tax Rates

One such step taken in September, 2019 was reduction of corporate tax rates. The Centre slashed effective corporate tax to 25.17%, inclusive of all cess and surcharges, for domestic companies. Making the announcement, Hon’ble Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal which began on April 1, 2019.

The move is a lift for PM Narendra Modi who was facing increasing pressure to relight once-stellar economy after five consecutive quarters of slowing growth that India witnessed this year, losing its status as the fastest-expanding major economy to China.

The FM said, “the new rates would be comparable with the lowest tax rates in South Asian region and in South East Asia.”

Concessional Tax Regime under Section 115BAB

Newly enacted Section 115BAB of the Income-tax Act, 1961, offers concessional tax rate for new manufacturing companies. New domestic manufacturing companies incorporated after October 1, can pay income tax at a rate of 15% without any incentives. That means, effective tax rate for new manufacturing companies will be 17.01% inclusive of all surcharge and cess.

The Finance Minister further said that companies can opt for lower tax rate after expiry of tax holidays and concessions that they are availing now.

Ministry of Corporate Affairs (MCA) Initiative

To facilitate mission of the Prime Minister of ‘Ease of Doing Business’, MCA has taken a new initiative by introducing a new Web Incorporation Form ‘SPICE+’. The set of Forms has been notified and deployed on the MCA Portal, replacing the existing SPICe form. The services of this New Form are applicable on New Incorporations w.e.f. 15.02.2020.

It is important to note that the new SPICE+ form shall provide all the services right from the name reservation for the Company till opening of Bank account post incorporation. This will undoubtedly bring Ease of Doing Business for New Corporate entities.

It will increase prosperity and make India a USD 5 trillion economy, PM said on Twitter.

MCA has taken a new initiative by introducing a new Web Incorporation Form ‘SPICE+’. The set of Forms has been notified and deployed on the MCA Portal, replacing the existing SPICe form.

SPICe+

SPICe+ is an integrated Web form offering 10 services by 3 Central Govt Ministries & Departments (Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance and One State Government (Maharashtra). This will facilitate saving as many procedures, time and cost for Starting a Business in India. SPICe+ is part of initiatives and commitment of Government of India towards Ease of Doing Business (EODB).

The new SPICE+ form provides all the services right from the name reservation for the Company till opening of Bank account post incorporation.

The form is an Integrated Web Form to be filed on MCA Portal.

SPICe+ Form has two Parts viz. (i) Part A – for name reservation and (ii) Part B: offers multiple facilities including incorporation, DIN, PAN, TAN, GSTN till opening of bank account.

Users may either choose to submit Part-A for reserving a name first and thereafter, submit Part B for incorporation and other services or file Part A and B together at one go for incorporating a new company and availing the bouquet of services as above.

Salient Features

The Following are features of both the parts of SPICe+ Forms:

(i) Part A: for Name reservation for new companies

The MCA states that user has to enter the name he wants to reserve, for incorporation of a new company. Users are requested to ensure that the proposed name selected does not contain any word which is prohibited under Section 4(2) & (3) of the Companies Act, 2013 read with Rule 8 of the Companies (Incorporation) Rules, 2014. Users are also requested to read and understand Rule 8 of the Companies (Incorporation) Rules, 2014 in respect of any proposed name before applying for the same.

For Name Search: http://www.mca.gov.in/mcafoportal/showCheckCompanyName.do

Stakeholders are requested to also check the Trademark search to ensure that the proposed name is not in violation of provisions of Section 4(2) of the Companies Act, 2013, failing which it is liable to be rejected.

For Trade Mark Search: http://www.ipindia.nic.in/index.htm

This Part A can also be used for changing the name of an existing company.

The approved name and related incorporation details as submitted in Part A, would be automatically Pre-filled in all linked forms also viz., AGILE-PRO, eMoA, eAoA, URC-1, INC-9 (as applicable).

(ii) Part B: for offering multiple incorporation services

  1. Incorporation
  2. DIN allotment
  3. Mandatory issue of PAN and TAN
  4. Mandatory issue of EPFO registration
  5. Mandatory issue of ESIC registration
  6. Mandatory issue of Profession Tax registration (Maharashtra)
  7. Mandatory Opening of Bank Account for the Company and
  8. Allotment of GSTIN (if so applied for)

This is a web-based form and the form should be filed through a Front office dashboard along with other applicable linked forms. The new web form facilitates On-screen filing and real time data validation for seamless incorporation of a company. Information once entered can be saved and modified in the Form. After the SPICe+ is filled with all relevant details, the Form should thereafter have to be converted into pdf format, this is possible with just a click of the mouse button for affixing DSCs.

Declaration by all Subscribers and first Directors in INC-9 gets auto-generated in pdf format and would have to be submitted only in Electronic form in all cases, except where:

  • (i) Total number of subscribers and/or directors is greater than 20 and/or
  • (ii) Any such subscribers and/or directors have neither DIN nor PAN.

All Check form and Pre-scrutiny validations happens on webform itself. Only exception is DSC validation. Changes/modifications to SPICe+ can also be done by editing the same web form application which has been saved, generating the updated pdf affixing DSCs and uploading the same. Such alterations are possible even after generating PDF and affixing DSCs.

DSC validation and other validations will happen at Upload Level.

Resubmission of applications for company name reservation and/or incorporation shall also be handled through the application number/Name applied for link on the new dashboard. A hyperlink will be available for the SRN/application number, so as to enable easy resubmission, wherever required.

Fees

A consolidated challan gets generated at the time of filing SPICe+ (INC-32) which shall contain applicable fee towards:

  • Form Fee
  • MoA
  • AoA
  • PAN
  • TAN

Companies getting incorporated through SPICe+ with an Authorised Capital up to INR 15,00,000 would continue to enjoy ‘Zero Filing Fee’ concession.

Additional Features

  • On approval of SPICe+ forms, the Certificate of Incorporation (CoI) is issued with PAN and TAN, as allotted by the Income Tax Department. An electronic mail with Certificate of Incorporation (CoI) as an attachment along with PAN and TAN is also sent to the user. Further PAN card shall be issued by the Income Tax Department.
  • From 15 February 2020, registration for EPFO and ESIC is mandatory for all new companies incorporated since then. No EPFO & ESIC registration nos. shall be separately issued by the respective agencies.
  • Since this date registration for Profession Tax is also mandatory for all new companies incorporated in the State of Maharashtra.
  • All new companies incorporated through SPICe+ (i.e. since 15th February, 2020) are mandatorily required to apply for opening the new company’s Bank account through the AGILE-PRO linked web form.

Grievances Redressal

It is possible that one may face technical problems like, form upload, pre-scrutiny errors, DSC related, payment related queries, please raise a ticket on www.mca.gov.in/myservices, Resolution of the issue will be made.

For interaction on such issues, one may also call up Corporate Seva Kendra at 0124-4832500 after 48 hours if ticket is not resolved. In case of resubmission / rejection remarks, contact should be to 0124-4832500 by selecting option 1 for CRC. For escalation one should send a mail to crc.escalation@mca.gov.in.

Next Gen

The newly introduced SPICe+ initiative takes the corporate filings to the next gen and makes company incorporation simple as 1-2-3!

This initiative provides an express way for promoters desirous of setting up manufacturing and other set up in India. Road to realisation of USD 5 Trillion economy is made seamless by this initiative. Corporate world, for this reason, has welcomed it. ■