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www.caonline News... 1>SEBI clarified that in case an eligible seller does not receive the tender/offer form, he can participate in the delisting by providing the application in writing on plain paper, signed by the eligible seller, by introducing the issue in the FAQs on SEBI (Delisiting Of Equity Shares) Regulations, 2009 2>Fee charged by Finance Co. for collecting EMI from bank customers would be considered for sec. 36(viii) deduction. [Gruh Finance Ltd. v. Assistant Commissioner Income-tax, Circle-4, Ahmedabad] 3>The assessee is eligible for the claim of depreciation u/s 32(1)(ii) on the amount of intangible assets acquired by it as per Business Transfer Agreement. [Grindwell Norton Ltd. vs Addl. CIT 1 (1) , Mumbai and Vice-Versa - 2016 (8) TMI 222 - ITAT MUMBAI] 4>Only when a corresponding liability arises on the ONGC to pay up the accrued amount, the income will become taxable. [Deep Industries Limited vs Assistant Commissioner of Income Tax, Circle-1-2016(8)TMI ...

Since the Rajya Sabha okayed the constitutional amendment for anational goods and services tax ( GST), businesses have been trying to understand the looming change to the indirect tax structure. That they have much to learn was shown at a GST training seminar hosted by Punebased Pritam Mahure, a chartered accountant, at the Confederation of Indian Industry in Gurgaon on Friday. Participants voiced common concerns about the openended nature of the model law and its increased compliancebased requirements. Features such as the importance of correctly categorising inter- state and intra- state transactions, requiring tax payouts under separate heads, are being seen as hard to determine. The threat of jail associated with the making of mistakes, if the discrepancies exceed ? 25 lakh, alongside the lack of a showcause notice- based structure, add to the apprehension. Pratik Shah, partner, SKP Business Consulting LLP, says the inclusion of provisions relating to arrest and prosecuti...

The standard tax rate near 18 per cent under GST will prove to be an ideal one and in all probability, will not stoke significantinflation as assumed by many, the Confederation of All India Traders ( CAIT) on Sunday said. However, finalisation of the tax rate depends much on the classification of goods and services under the exempted category, and alsoundernominaltaxrate, which may be one per cent, CAIT said. CAIT national President BC Bhartia and Secretary General Praveen Khandelwal said under the current VAT regime, items placed under the the 5- per cent tax slab will be attracting standard rate of tax, which may be 18percent, and itisfearedsuch asituation will lead to inflation. However, it may be noted that goods placed under 5per cent are largely used as raw material for the finished goods and have been attracting excise and service tax so far with no advantage of input credit for MSME ( micro, small and medium enterprise). UnderGST, these will be placed under a higher sla...

HP, Uttarakhand, Gujarat, TN to be worst hit as some of the backward areas in the states have tax holidays Many companies, especially in the fast moving consumer goods (FMCG) and auto sectors, are reaching out to state and central governments seeking clarity on whether there could be a way to grandfather tax incentives by state governments because under the goods and services tax (GST) regime, the ongoing tax holidays for investing in underdeveloped areas would mean little. “This is not just a tax issue; it is a sensitive political issue. While many companies that had invested in these areas due to lower taxation will see rising costs, state governments may not be able to abide by the MOUs they had signed with these companies,“ said a person close to the development. In many cases the companies are far from their sunset clauses or the time frame when they no longer are eligible for tax exemptions. The government may not be in a position to continue the current exemptions once G...

When the performance of Infosys failed to meet market expectations in the quarter ended June, the media reported it as the first failure of Vishal Sikka, who is the chief executive officer of the company. The media gives total credit for the consistently excellent performance of ITC to Y C Deveshwar, who has been the chairman and CEO of the company for quite a long time. Cyrus P Mistry had revised the strategy of the Tata Group, when he took over as the chairman. It is obvious that the media and the market believe, and rightly so, that the board does not contribute significantly in the performance of the company. The leadership qualities and managerial capabilities of the CEO ( and his team) determine the performance. In case of companies, where the controlling shareholder runs the company directly, or through its nominee, the firm’s performance reflects the quality of decision- making by the controlling shareholder. The board of directors gives the CEO a free hand to manage the co...

Litigation may stonewall economic reforms’ Businesses have only 240 days to realign their systems and processes in line with the new indirect tax regime in the country. Experts share their views on the steps that will help them become GST- ready An important objective of the proposed Goods and Services Tax ( GST) is to ensure a uniform tax base, same or similar tax rates, and aharmonised tax regime in India, which would unify India into a single market. However, under the Indian federal system, such need for harmonisation is often in conflict with the principles of fiscal autonomy enshrined in the Constitution. To achieve a balance between these competing principles, the Constitution ( 122nd Amendment) Bill, 2014, ( GST Bill) proposes setting up of a GST Council, comprising the finance minister ( FM), minister of state in charge of revenue, and state FMs. Among other things, the Council would make suggestions on important issues such as tax base, tax rates, exemptions and model...

Though the law sets a time limit for the arbitrator to pass an award, the period could be extended in one exceptional case, — when both parties consent to do so, the Supreme Court stated in its judgment in Electrical Manufacturing Co vs Power Grid Corporation. If there is no within the time frame. In this case, the time was not kept after disputes arose between Electrical Manufacturing and NTPC over payment for a contract to execute the RihandKanpur transmission line. The company approached NTPC and other authorities, but to no avail. So, it invoked the arbitration clause and appointed its nominee. However, NTPC failed to name its arbitrator. The company got the Institution of Engineers ( India) to appoint the other two arbitrators. The arbitration went ahead, despite protests by NTPC ( now Power Grid Corporation), and the award was passed in the company’s favour. When Electrical Manufacturing approached the Delhi High Court for execution, NTPC objected. While accepting the objection...

Estate planning has become an area of priority for high net worth individuals (HNIs), as they wish to transfer their riches to the next generation without acrimony. There are two popular options, will and trust. The latest edition of Kotak Wealth Management’s ‘ Top of the Pyramid’ report says, a will remains the popular instrument of choice for bequeathing wealth but trusts are gaining traction. A number of issues can arise when wealth is transferred through awill. This document can be easily challenged in a court. When a person dies after writing a will, his heirs need to get a certificate, called probate, from a court, saying the will is authentic and the heirs agree to abide by it. During the probate proceedings, inheritors can challenge the will. The probate certificate is issued only after the dispute gets sorted. This can delay the transfer of estate to the next generation. No probate certificate has to be obtained in case of a trust. “A will becomes effective after the d...

When the GST is enforced, exemptions from central excise on tea, coffee, food might go PRUNING PLAN About 200 items, including premium tea and coffee, ready- toeat food and branded biscuits, could lose tax exemptions when the goods and services tax comes into effect. The Union government is planning to prune the list of excise duty exemptions from the current 300 to the states’ list of 90 items that are exempted from value added tax ( VAT). After the Rajya Sabha passed the Goods and Services Tax ( GST) Constitution (Amendment) Bill last week, the Centre and the states are working to make a uniform list of items that would exempt from the unified indirect tax. “The idea is to keep exemptions at a minimum. We have prepared a draft exemption list. The list will be pruned to 90 items to match the state level,” said an official The Constitution ( amendment) Bill will be introduced in the Lok Sabha on Monday. The lower House of Parliament has to pass it again — it had passed the Bill...

Guess which department of the Union government had the dubious distinction of seeing the biggest increase in its headcount last year? Not the police or the postal department, not even the railways. It was the revenue department, whose staff strength improved by a whopping 84 per cent at the end of March 2016, compared to what it was in the same month of the previous year. From about 96,000 employees (mostly engaged in the business of tax collection) at the end of March 2015, the revenue department saw its manpower strength go up to about 177,500 by the end of March 2016. Among the big departments in the government, defence was the only other one that saw double- digit increase in the space of just one year with its civilian staff strength going up by 25 per cent from about 40,000 to over 50,000. The manpower strength of the police department under the Union home ministry went up by just three per cent in this period. And the railways that has over 1.3 million employees, accountin...