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West Bengal Finance Minister Amit Mitra has been named the new chairman of the empowered committee of state Finance ministers that is working out the details of the proposed goods and services tax (GST). He will succeed Kerala Finance Minister KM Mani, who resigned in November over corruption charges. Mitra, an economist who was secretary general of the Federation of Indian Chambers of Commerce & Industry before joining politics in 2011 and becoming a minister in the Trinamool Congress government in West Bengal, was elected at a meeting of state finance ministers that was attended by Finance Minister Arun Jaitley. Minister of state for finance Jayant Sinha said Mitra was elected head of the committee at the meeting on Friday. Mitra didn't attend the meeting as he was unwell and was informed about the decision over the phone by Jaitley. The head of the panel has always been from an opposition partyruled state. CPI-M's Asim Dasgupta of West Bengal held the post when t...

Avoid generating higher tax revenue through indirect taxes that hit the poor the hardest As another session of Parliament looms, there is a pregnant pause over the delivery of the Goods & Services Taxes (GST) Bill. It seems tantalisingly close with no further complications barring just one — to fix a rate ceiling in the Constitution or not? Aspersions are cast and motives are questioned over this clamour for a constitutional tax cap. Inadvertently, French economist Thomas Piketty’s recent visit to India may have provided an intellectual basis to this debate on a tax cap. Piketty remarked that India needs a much higher tax-GDP ratio to fix its widening income and wealth inequality and that the current skewed tax structure is making inequality worse. Some sought to dismiss his arguments with the familiar ‘foreigner knows little about India’ disdain. Some others argued that improving efficacy of government spending and distribution are far more important than merely raising the ta...

The income tax department clarified that all the upcoming reporting in May 2016 for the purpose of adhering to the US Foreign Account Tax Compliance Act (Fatca) will have to be done in rupees. For 2017, the forms would be suitably modified to include other currencies. The clarification came because in the first reporting in September 2015, some banks had reported in rupees and others in dollars, explained Bahroze Kamdin, partner, Deloitte Haskins & Sells LLP. This would supersede the earlier circular that the value of an account in question should be reported in the currency in which it is denominated. “So, this clarification could impact those financial institutions which have created their systems for reporting in dollars and will entail time and cost to make changes to the systems designed or being designed,” said Kamdin. The department also clarified that all fixed deposits and auto sweep facilities in pre-existing savings bank accounts will not have to be reported in...

The Labour Ministry has sought Cabinet’s approval for the wage code Bill that seeks to empower the Centre to fix a minimum wage applicable across all sectors in the entire country. “We have already sent the wage code Bill for Cabinet approval. We will also send the Labour Code on Industrial Relations Bill in a week,” Labour Secretary Shankar Aggarwal said after a seminar on Labour Reforms. “We are trying to create a mechanism for minimum wage for all sectors in the country.” At present, the Centre and states fix minimum wages for different categories of workers in various sectors under their respective jurisdictions. Once it sees the light of day, the Wage Code will allow fixing a benchmark wage for workers, which will have to be adhered to by the states as well. This provision will ensure a minimum wage to workers across the country. However, the states will be free to prescribe higher wages.The Labour Ministry is likely to push the Code on Wages and Code on Industrial Relat...

FM Also Likely To Revise Limits, Reduce Rates For TDS Finance minister Arun Jaitley is likely to introduce some incentives in the budget that can make the life of the common taxpayer easy . These may include benefits for housing, healthcare and education and some steps to encourage savings and investment. The finance minister is also expected to lay down a clear road map for implementing his earlier promise of lowering the corporate tax rate to 25%, while balancing this with the exercise of pruning exemptions and deductions for the corporate sector. Revising limits and reducing rates for tax deduction at source (TDS), rationalizing several TDS procedures and raising monetary limits for maintenance of books of accounts and tax audit also appear to be receiving the attention of the North Block officials engaged in drafting of the Finance Bill, 2016. The se were among the key recommendations of the Justice Easwar Committee appoin ted by Jaitley. “Judging by the trend of several ...

The global economic outlook seems uncertain. With oil prices tumbling, a slowdown in the Chinese economy and devaluation of yuan, a general question today is what might be the potential impact on India. With the current Indian demography and a stable government at the centre, India has the potential to capitalise on this opportunity. Budget 2016 needs to focus on simplifying tax regulations and provide for increasing the rural demand for goods and services, attracting foreign investment, facilitating Indian corporates in their expansion plan and lay the ground for an export conducive environment. To start with we can expect a reduction in the corporate tax base rate of 30%. Earlier, the government had proposed to phase out the profit-linked incentives from April 2017.Given the need to attract foreign investment and push corporates towards expansion, the government may want to reconsider and defer this phase-out plan. Further, with the reducing difference between the base corporate ...

www.caonline.in News 1.Levy of tax on open space termed as “banquet halls” providing only accommodation or space for marriages/receptions in terms of section 2(c) in the manner stated under section 2(k) of the Haryana Tax on Luxuries Act, 2007. The validity of the same is upheld and the petition is dismissed. - HC. [M/s Laxmi Sadan, Sector 19, Rewari vs State of Haryana and others - 2016 (2) TMI 550 - PUNJAB AND HARYANA HIGH COURT] 2.Denial of benefit of CENVAT Credit on xerox copy of courier bill of entry, appellant have correctly claimed the CENVAT Credit on the photocopy of the courier bill of entry filed by them and CENVAT Credit cannot be denied on mere technical grounds - Tri.[Arbes Tools Pvt. Ltd. vs Commissioner of Central Excise, Mumbai-II - 2016 (2) TMI 555 - CESTAT MUMBAI] 3.All the services provided by the Government or local authority to a business entity, except the services that are specifically exempted, or covered by any another entry in the Negative List, shall b...