CA Online

Govt Mulls New Category to Tax Hi-tech Items Move to allow Centre to impose import duties without violating global pact The government is exploring the possibility of creating new categories in its tariff structure that will allow it to impose import duties on hi-tech products without violating a global agreement that mandates nil duties.The government has already imposed customs duties on mobile phones to encourage manufacturing in India.The finance and commerce ministries and the department of electronics are in discussions on the issue to give a ‘Make in India’ push to hi-tech products. Officials say some countries have already used the flexibility available in the Harmonised System of Nomenclature of goods to raise duties without running afoul of the Information Technology Agreement 1, or ITA1.Violations of the agreement are challenged at the World Trade Organization (WTO).The government has also sounded out the industry on the idea, said a person privy to the move. New Delhi ha...

NSE, MCX in merger talks, could submit proposal to Sebi this month The merger will help NSE and MCX cement their leadership position both in the equities and commodity derivatives space The National Stock Exchange (NSE) and the Multi Commodity Exchange (MCX) entered into merger talks ahead of the implementation of the universal exchange framework in October, said a top official. The two entities are planning to approach market regulator Securities and Exchange Board of India (Sebi) as early as this month, according to the official.Both the exchanges have readied a blueprint for the merger proposal which will be discussed with Sebi. Sources say NSE entered talks with the commodity bourse soon after the market regulator allowed exchanges to dabble both in the equities and commodities space. The decision was taken by the Sebi board at its December 2017 meet. NSE spokesperson said, “We will not comment on market speculations.” An query sent to MCX did not elicit immediate response.Sourc...

Taxman Disallows AMP Deductions Sought by MNCs Says ad money spent not for India business uses hitherto unused provision of I-T Act The income-tax department has started issuing notices to several multinational consumer firms, disallowing deductions on expenses of advertising, marketing and sales promotion under a hitherto unused provision of the Income Tax Act. Notices have been issued to consumer companies such as Hindustan Unilever, P&G, L’Oreal, LG and Maruti Suzuki. Industry experts peg the total demand raised by the tax department on this count at about Rs.10,000 crore. As AMP (advertising, marketing and promotional) expenses is a cost head, disallowing the deduction would inflate pre-tax accounting profits, translating into increased tax outgo for a company if tax claims are upheld. The government claims that these expenses are not relevant for the India business and are mostly related to overseas brand building. Hence, they are sought to be disallowed under Section 37 of...