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Showing posts from August 10, 2016

Income tax deparment set for action against ‘shell’ firms

The income-tax (I-T) department will crack down on “shell” or “jamakharchi” (deposit and withdrawal) companies that are used as money laundering tools. The Central Board of Direct Taxes (CBDT) recently took a decision to focus on such companies as well as individuals and entities engaged in such activities, sources said.
These operators have “laundered several hundreds of crores of black money and have earned commission income,” sources told HT. Kolkata-based tax authority , directorate of investigation, in its findings has said that a chunk of operators work from Ahmedabad, Mumbai, Hyderabad, Delhi and Bengaluru.
“Principal chief commissioners of income tax Ahmedabad, Mumbai, Hyderabad, Delhi and Bengaluru have been asked to take a suitable action against persons who had laundered black money with the help of such operators,” sources said. According to the tax department investigations, these operators work through shell companies, which do not have any genuine business, and are formed an…

Lok Sabha Clears Amendments to Compensation Act

In a move that would reduce litigation in cases of disputes arising over compensation to workers, the Lok Sabha on Tuesday passed the Employees' Compensation (Amendment) Bill 2016 that would raise the cap on amount of compensation to be taken up by high courts. Section 30 of the Employees' Compensation Act 1923 provides for appeal in high courts whenever the disputed amount of compensation is more than Rs.300. The bill seeks to raise this to Rs.10,000, which may be further increased through a notification later. The Bill also provides for increase in penalty for contravention of the Act to Rs.50,000 from the current Rs.5,000.It may be later raised to Rs.1lakh. The Employees' Compensation Act, 1923, provides for payment of compensation to workmen and their dependants in case of injury by industrial accidents, including certain occupational diseases arising out of and in the course of employment resulting in death or disablement. It provides for making it obligatory on the empl…

RS Passes Bill to Tighten Noose Around Loan Defaulters

The Rajya Sabha has passed a Bill that amends four different Acts to expedite disposal of debt recovery applications, and will complement the Insolvency and Bankruptcy Code passed by Parliament in May. The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016, amends four Acts -the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act of 2002, the Recovery of Debts due to Banks and Financial Institutions Act of 1993, the Indian Stamp Act of 1899, and the Depositories Act of 1996. The Lok Sabha had passed the Bill earlier in the month. “We cannot have a culture where somebody just takes loan and is under the assumption that it will now be the headache of the banks to recover the money, and banks should be answerable,“ Finance Minister Arun Jaitley said in his reply to the debate on the Bill. The Bill allows secured creditors to take possession of a loan collateral on default throug…

Sebi miffed with new KYC system

Central KYC not in sync with Sebi's KRA system; regulator writes to finance ministry The Securities and Exchange Board of India (Sebi) is miffed with the new central Know Your Customer (KYC) process implemented for the entire financial system. And, has written to the finance ministry to rethink the move, said three sources. According to Sebi, the new system is not in sync with the securities market KYC. And, has disrupted the common KYC process implemented through KYC Registration Agencies (KRAs). “Sebi is supportive of the idea behind the new system but feels the implementation hasn’t been proper. It has also led to a lot of disruption, as there are several differences between the new and existing process, which has created confusion. It has written to the finance ministry and is awaiting further directions,” said a person. The new process is being implemented through the Central Registry of Secularisation and Asset Reconstruction and Security Interest of India (Cersai), an online re…

There will be anomaly with petroleum out of GST

Petroleum being out of the goods and services tax (GST) initially will create some anomaly as tax credit on some of the inputs to oil industry may not be given, said Revenue Secretary Hasmukh Adhia in an e-mailed interview. He tells Dilasha Seth that the Central Board of Excise and Customs (CBEC) is working out a plan to recast the organisational structure once GST is implemented. Excerpts: You have said both the Centre and states will have administrative power to assess and scrutinise businesses. However, states want the sole power over entities with up to Rs 1.5 crore of annual turnover. Is there a solution to this tussle? The issue of cross empowerment for the purpose of removing dual control will have to come up for discussion in the meeting of the GST Council. We will continue to make efforts with the states to arrive at a consensus on this. There are fears that inflation will rise, at least in the short run, if the rates are not kept within 18 per cent. Is this fear justified? Wheth…

Tax collection up 28% in April-July

Tax collections, excluding refunds, rose 27.9 per cent to Rs 4.31 lakh crore in the first four months (April to July) of the current financial year, compared to Rs 3.37 lakh crore in the corresponding period of 2015-16. Refunds pulled back the growth in corporation tax collection in these four months. And, customs duty collections fell in July, indicating merchandise import fell at a sharper rate. While indirect tax collection grew 29.9 per cent to Rs 2.72 lakh crore, that of direct taxes rose 24 per cent to Rs 1.59 lakh crore. Corporation tax gave an extra 2.8 per cent, while personal income tax went up 46.6 per cent. SWELLING KITTY While indirect tax collection grew 29.9 per cent to Rs 2.72 lakh crore, that of direct taxes rose 24 per cent to Rs 1.59 lakh crore Refunds were Rs 64,181 crore in April-July, 10.4 per cent higher than in the corresponding period last year Direct tax collection, net of refunds, were almost 18.8 per cent of the Budget Estimate (BE) of  Rs 8.47 lakh crore for 201…