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Showing posts from October 15, 2016

NGOs seek extension of FCRA licence validity till Dec 31

Non-governmental organisations (NGOs) have petitioned the Union home ministry to extend the deadline for renewing their licence under the Foreign Contribution (Regulation) Act (FCRA). NGOs require an FCRA licence to receive money from foreign donors and they have to submit annual account statements to the Foreigners Division in the ministry of home affairs. The renewal process started in April this year and FCRAregistered NGOs were asked to apply for renewal of their licences by June 30. “While many NGOs have been able to secure their renewals, a sizeable number of FCRA-registered organisations still await an inkling of communication from the FCRA department,” said Voluntary Action India (VANI), which works as an umbrella organisation for other non-profits, in apress release. Earlier, the ministry had extended the validity of licences expiring on September 30 to October 31. In their petition, the NGOs have asked the government to extend the validity to December 31. “Non-disbursement of re…

Sebi to ask rating agencies to disclose compensation

The Securities and Exchange Board of India (Sebi) is likely to ask credit rating agencies (CRAs) to disclose the general nature of compensation arrangements with the rated entities, including exchange of gifts. This is to address the conflict of interest arising from agencies charging companies for rating their securities. Agencies will have to include a note in their operations manual on how they manage this conflict. Further, any conflict of interest owing to the composition of members in the ratings committee has to be reported during an internal audit of the agencies. “Investors relying on rating agencies should be aware of the monetary compensation given to the agencies. This will help them decide whether the rating, especially a positive one, is fair or not, and if there is an arm’s length distance between the issuer and the agency,” said Tejesh Chitlangi, partner, IC Legal. The guidelines might also mandate publishing of guidelines on what constitutes non-cooperation from the issu…

Transactions Older Than 6 Years Now Under Tax Lens

The crackdown on black money is not over. With the scheme for voluntary disclosure of unaccounted for wealth now closed, tax officials have launched a drive to unearth hidden incomes and are looking at transactions carried out beyond a six-year ceiling under existing rules, sources said. “The tax department can scan transactions older than six years by invoking clause 197C of the finance act, 2016. This clause was introduced to crack down on black money,” said a finance ministry official, who did not wish to be named. An offender, depending on the amount or assets seized, could end up paying a tax as high as 75% and could also be jailed, sources said. Officials are scrutinising the records of those who they believe did not come clean and are hiding undisclosed wealth. While the I-T law allows a check of income of the last six years, the finance act, under which the disclosure scheme was brought in, and foreign undisclosed assets act allow authorities to inspect records older than six years…

FinMin to issue rules fo rnorms under BEPS

The finance ministry will issue rules and guidance to address some concerns and ambiguity over mandatory reporting norms with respect to transfer pricing formultinational companies whose consolidated annual revenue is over Rs.5,000crore. The government is also steppingup administrative systems to plug possible data leakage,said a senior tax office rata conference on Friday. These rules and guidance will aimat clarity on the extensive data reporting and document ation required under the Base Erosion and Profit Shifting (BEPS)measures unveiled by the Paris-based OECD grouping in October last year,to address tax avoidance by MNCs.OECD is Organization for Economic Cooperation and Development. The concerns are on confidentiality of the data shared by companies with the tax author ities of various jurisdictions, beside the difference in accounting years and rules in differentcountries.The matter was discussed at the conference on Friday. Akhilesh Ranjan,a senior income tax officer,said:"Th…

GST rate for polluting products could be higher

Finance Minister Arun Jaitley on Friday said tax on environment-unfriendly products could be “distinct” from others in the Goods and Services Tax (GST) regime to be rolled out next year. India ratified the Paris Climate Change agreement on October 2. “The indirect tax regime that we are planning, the rate of taxation on such products which are going to be environmentally unfriendly would be distinct from the normal rate of taxation. This is one of the proposals being discussed,” Jaitley said on the eve of the BRICS Summit that begins on Saturday. The GST rates are in the process of being finalised. The FM, who will attend the BRICS Economic Forum meeting, said the country has taxed coal and petroleum products in the past as well. “Resources have to be mobilised from all sources for climate financing so that sustainable development goals can be achieved in a much more concrete manner,” he said. Jaitley said the commitment from developed countries to fund climate change financing was insuf…