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Showing posts from January 19, 2017

Global tax- avoidance rules may over ride Indian treaties

There is a possibility that the General Anti-Avoidance Rules (GAAR,ontaxes)and the tax treaties signed by the government with those of Mauritius,Singapore and Cyprus,and even othernations suchasNetherlands,couldbeovertakenbyanotherevent. These could,say experts ,be partially or fully over ridden by the Multilateral Instrument (MLI) to implement tax treaty related measures for preventing Base Erosion and Profit Sharing (BEPS).

BEPS is a tax avoidance strategy used by multinational companies— profits are shifted from jurisdictions that have high taxes to those with low or no taxes.The Organisation for Economic Cooperation and Development (OECD)grouping of countries had developed the MLI to tackle such issues.A little over 100 countries had adopted the MLI by November 2016.It will be signedby themthisJuneandislikelytobe implementedbyIndiainApril2018 or2019.

The MLI and related BEPS measures will be implemented through amendments in the IncomeTax(I-T) Act.“MLI islikely to override the rele…

Sebi considers NSE, BSE plea on self-trading

The Securities and Exchange Board of India (Sebi) is considering a plea by the stock exchanges to allow trading of their own shares under the ‘permitted-to-trade’ category. If allowed, shares of BSE will trade on the BSE. Similarly, shares of the National Stock Exchange (NSE) will be allowed to trade on its own platform. “Sebi and exchange officials met last week to discuss the issue. The regulator is consulting more participants and legal experts,” said a source. Sebi, BSE and NSE declined to comment. An exchange may allow trading in any company, even if not listed with it, under the permitted to trade mechanism. For instance, the Multi Commodity Exchange of India is exclusively listed on BSE but its shares also trade on the NSE under this segment.

Sebi’s regulations don’t allow exchanges self-listing and self-trading. “The market regulator has taken a firm stand on not allowing self-listing. However, it is studying the risks in allowing self-trading,” said a regulatory official.

Legal ex…

Transfer insurance when buying old vehicles

If you are planning to buy a second-hand vehicle, here’s a tip: Transfer the old insurance policy in your name or buy a new one immediately. This is the first step you should take to ensure that the vehicle is covered. This can be done even if the vehicle is not transferred in your name. All you need is a proof — receipt from the regional transport office (RTO) —that your application for transfer of registration certificate is in process. Recently, the Pune district consumer forum ruled that an insurance company can reject a claim if the new owner of a car had not transferred the old policy in his name.

A Pune-resident purchased aused car that met with an accident two months later. While the vehicle was registered in his name, he had not transferred the old insurance policy nor bought a new one. He approached the authorised centre, which quoted ~1.44 lakh for repairs. But when he lodged aclaim with the insurer (Bajaj Allianz GIC), the claim was rejected. The new owner approached the con…

‘Google Tax’ prompts Apple to raise App Store prices

Apple will increase prices of applications on its App Store in the country,by upto 33 percent,with the government introducing a 14.5 percent service tax and the falling value of the rupee. An app costing $0.99 (aboutRs.68)on the App Store in the US will now cost Rs.80 in India as opposed to Rs.60 earlier.The move is part of a global change in prices of apps, an exercise Apple engages in periodically.

Apple communicated the changes in pricing to developers and was reported by digital media outlet Mac Rumors.

The government introduced a service tax of 14 percent and levy of 0.5percent from December1 last year on all services sold digitally.This equalisation levy was introduced as part of a global move by nations to tax digital goods sold from outside a country.It is now popularly known as “GoogleTax”.

“Price tiers on the App Store are set internationally on the basis of several factors, including currency exchange rates,business practices,taxes,and the cost of doing business.These factors v…

Tax breather for foreign investors

Foreign portfolio investors (FPI) can now breathe easy with the Income Tax (I-T) Department on Tuesday putting in abeyance its controversial circular on taxing India-dedicated funds. Experts said clarity was necessary on the issue at the earliest so that FPIs were certain. They expect the finance ministry to amend the law in the Budget to put an end to the controversy. The circular, in the form of frequently asked questions (FAQs), had spooked the markets when it was issued last month. It also gave rise to fears of retrospective taxation as the principal amendment to the Income Tax Act on indirect transfers was such in nature.

These provisions were first introduced in 2012, with retrospective effect, after the government failed in levying a tax on the British telecom giant Vodafone Group Plc’s purchase of Hutchison Whampoa’s India telecommunications business.

The Central Board of Direct Taxes (CBDT) and the capital markets division of the finance ministry have received a number of represen…