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Showing posts from January 28, 2017

Budget could make eating out and air travel costlier

Finance minister Arun Jaitley could raise the service tax rate in the Budget to be presented on February 1, a move that will increase the cost of eating out, going to the movies or flying. Two senior government sources told Hindustan Times on Friday that the existing rate of 15%, which includes two cesses, could be raised by another 0.5% to 1%. “The government might want to increase the service tax so that the shift to GST is not abrupt,” one of them said, referring to a proposed a Goods and Services Tax that has missed several deadlines because of political wrangling. Jaitley has said he wants to roll it out by July 1. Service tax is a charge service providers collect from customers and then pass onto the government. There are some services provided by state and central governments that do not attract this tax. A rise in service tax could give the government some elbow room to offer cuts in personal income tax or spend more to revive private consumption that received a shock after the go…

I-T has info on black money deposited after note ban

Income tax department has confirmed information about the black money deposited in the bank account in Madhya pradesh chhattisgarh(MP-CG) region after demonetisation in MP-CG region. Such pepole are given a chance to opt for Pradhan Mantri Garib Kalyan Yojana (PMGKY) to  disclose their black money,' Pricipal chief Commissioner (MP-CG) and Director General (Investigation) AK Jaiswal told Journalists in Indore. Business Standard New Delhi,28th January 2017

Kelkar says single GST rate easy to administer

Former finance secretary Vijay Kelkar on Friday advocated a single rate for the Goods and Services Tax (GST) as that would it simpler to administer. The GST Council has already decided on the fourrate structure for the indirect tax regime, besides a cess. Giving an example, he said it was better to first build a single-rate GST with a low rate, achieve full mastery of this, and then consider more complex possibilities such as high rates and multiple rates. Delivering the C D Deshmukh lecture, organised by the National Council of Applied Economic Research, Kelkar said policymaking was required to address market failure, improve efficiency and equity in the society. With regard to taxation, he said it should be stable and simple, giving investors confidence to invest. A task force constituted by the 13th Finance Commission, headed by Kelkar, had recommended that all goods and services should be taxed at the single GST rate of 12 per cent. It could be split as 5 per cent for the central GST …

Centre urges states to adopt model land lease Bill

Wiser after the criticism faced in trying to amend the land acquisition law in 2015, the Narendra Modi government has revised its earlier plan for a parliamentary nod to its model land leasing Bill. Instead, the Centre is persuading state governments to enact it. And, has support from even Opposition party-governed states, such as Congressruled Karnataka and Left-ruled Kerala. The Bill in question aims at enabling farmers and farming groups to lease their land for cultivation through a legal document, without dilution of ownership. NITI Aayog, which drafted it, says the legislation could help release for cultivation 20 million hectares of fallow tract, where its owners fear land grab. The model Bill also aims to protect the rights of tenants in the event of a natural calamity, giving them access to compensation. Land is not only a state subject but also an emotive issue. Which was underlined for the Centre, at significant political cost, when it tried to amend the land acquisition law. …

Sharing stage with Jaitley,CBEC chief flags up staff fears

Central Board of Excise and Customs (CBEC) Chairman Najib Shah on Friday raised concerns over the proposed goods and services tax (GST) on behalf of excise and service tax officials on the same dais where Finance Minister Arun Jaitley was present.  There is lingering fear among tax officials that their work will be reduced because of the division of the administrative turf proposed in the GST regime. The occasion was Customs day, but officials were not pleased with the way the Centre bowed down to states over the division of administrative control between the Union and state governments. The IRS Association earlier this week had decided to not to celebrate Customs Day at any place and wear black badges on January 30, Martyrs' day. Shah drew Jaitley's attention to “the rising disquiet in the cadre”, saying there were human resource issues in the service. Jaitley tried to pacify Shah, saying any such disquiet would come down as GST will create ample opportunities. “Therefore even thou…

Nilekani: GST to ease loan access for millions of firms

The implementation of Goods and Services Tax(GST) should driven early seven million small businesses to the formal digital economy and help them get easy access to loans,said Nandan Nilekani,the technology entrepreneur and co-founder of Infosys who wastapped by the government to runan ambitious identity-recognition programme, on Friday. The new unified taxation system,which is scheduled to be implemented latert his year, will bring in millions of unorganised businesses on one platform.This would effectively ,Nilekani believes,help the mget loan susing digitalised data. Business Standard New Delhi,28th January 2017

Govt allays GAAR fears but grey areas remain

New rules take effect from April 1 ;tax treaties won’t be overridden

The finance ministry sent positive signals to foreign portfolio investors(FPIs)on Friday by clarifying that the general anti avoidance rules(GAAR,on taxes) will not over ride tax treaties with suitable limitation of benefit (LoB)clauses,but which had certain grey areas toi nterpret.

Experts said it would have been better if these clarifications could have come earlier,as it takes time to windup some commercial arrangements.However, this is still better than the rules on place of effective management,which have been enforced from the current financial year. The GAAR takes effect from April 1,when the next year begins.

Investments made through compulsory convertible instruments,among others,would not draw GAAR,if made prior to April 1.Some other safe guards have also been put to avoid arbitrariness.

“...if a case of avoidance is sufficiently addressed by LoB provisions in the tax treaty,there shall not be an occasion to in…