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Salary, allowances covered under ruling in a plea filed by Indian subsidiary of US group Payments to expats working in India for local arms of multinationals by the foreign parent won't attract service tax, the Authority for Advance Ruling has said. The decision is significant as it brings some relief to MNCs that have been served with notices in similar cases. “There shall be no liability to pay service tax on the salary and the allowances payable by the applicant to the employee in terms of the dual employment agreement and such salary will not be eligible to levy the service tax as per the provisions of the Finance Act,“ the ruling said. This followed a plea by North American Coal Corp. India, the local subsidiary of US-based North American Coal Corp. It sought a ruling on the application of service tax on social security benefits given by the parent to an employee working in India on contract. There have been recent instances of tax authorities issuing notices to MNCs i

Plans to set up a monetary policy committee (MPC) under the Reserve Bank of India (RBI), which will be empowered to set interest rates, has entered the final leg. The finance ministry on Friday said that it has moved a draft Cabinet note seeking comments from all stakeholders including other ministries. The details of the agreement are not known but indications are that the RBI would continue to have a say in decisions relating to interest rates. While the government and RBI have managed to iron out their differences on the proposed MPC, in August the finance ministry found itself amid a raging controversy when the Financial Sector Legislative Reforms Commission put up a report seeking to take away RBI governor’s overriding powers on interest rate decisions. However, the finance ministry clarified that the report was not final and it just sought comments from stakeholders. In February, the government and the RBI signed the monetary policy framework agreement with the objective

The Securities and Exchange Board of India ( Sebi) has proposed new regulations for public issue of core capital instruments by banks and for the public issue of Infrastructure Investment Trusts ( InviTs). The proposed norms for retail or public issuance of Additional Tier- 1 ( AT1) bonds set the minimum investment at ? 2 lakh, due to the additional risk with these as compared to other debt products. “ To ensure only well- informed retail ( individual) investors, with adequate risk tolerance level, subscribe to these," explained Sebi in the draft norms, issued on Friday. Last year, the Reserve Bank had allowed banks to issue AT1 instruments to retail investors. Sebis committee on corporate bonds had deliberated on the additional requirements for and disclosures by banks for doing so. For InviTs, Sebi has proposed that disclosures in the offer documents and draft papers be kept in the public domain for at least 21 days. The allocation in the public issue to qualified instit

There is hope that the Rajya Sabha is likely to function smoothly for the three remaining days of the winter session of Parliament. But it might not discuss contentious legislations such as the Goods and Services Tax (GST) Constitution Amendment Bill. This has dashed any hopes of the GST being rolled out by April 2016. The tax reform would now be taken up in the Budget session in Februaryend. At an all- party meeting convened by Rajya Sabha Chairman M Hamid Ansari, the Opposition, including the Congress, agreed it would ensure the passage of at least half- a- dozen Bills and allow the House to debate issues such as price- rice, agrarian crisis, impact of floods and drought, the political crisis in Arunachal Pradesh and the intolerance issue. However, consensus eluded on the GST and real estate ( regulation and development) Bills. Ansari described the hourlong meeting as “ good”. The Bills that the meeting agreed the House should pass before its session concluded on Wednesday ar

Mid- year economic analysis confident of meeting this year’s fiscal deficit target, but hints at deferring fiscal deficit target dates The government on Friday lowered its forecast for gross domestic product ( GDP) growth to 7- 7.5 per cent in this fiscal year, down from an earlier forecast of 8.1- 8.5 per cent. Though it stuck to the fiscal deficit target of 3.9 per cent of the GDP for the year, Chief Economic Advisor Arvind Subramanian said at a press conference that the target of 3.5 per cent looks challenging for next year. The mid- year economic analysis tabled in Parliament struck a note of caution by saying there was a case for re- assessment of the medium- term fiscal consolidation road map because of the additional expenditure due to the recommendations of the Seventh Pay Commission and the higher pension payout for defence veterans next year. “If the government sticks to the path for fiscal consolidation, that would further detract from demand. On these assumptions, a

Updates Of the Day 1.CA certificate required in Form 15CB on payment exceeding Rs. 5 lakh w.e.f. 01.04.2016. .CBEC Notification No. 93/2015. 2.No Form 15CA & 15CB will be required to be furnished by individual for remittance which do not require RBI approval under LRS, w.e.f. 01.4.2016. Notification No. 93/2015. 3.Modified version of LLP Form 4 and Form 27 are available w.e.f 18.12.2015. 4.Modified versions of Forms GNL-1, INC-20, INC-23, MGT-15, INC-7 and ADT-3 are available w.e.f. 17.12.2015. 5.CBDT Circular No 22 dated 17.12. 2015. Allow ability of employer's contribution to funds for the welfare of employees in terms of section 43B (b) of the Income Tax Act. For more News Like us on https://www.facebook.com/caonlineofficial Or Subscribe on mail visit : www.caonline.in

Updates Of the Day 1.Major changes in requirements of Form 15 CA & 15 CB and foreign remittances under sec 195: 1) Rule 37 BB of the IT Rules amended to strike a balance between reducing the burden of compliance and collection of information. 2) No Form 15CA & 15CB will be required to be furnished by individual for remittance which do not require RBI approval. 3) List of payments which do not require submission of Forms 15CA & 15CB has been expanded from 28 to 33 including payments for imports. 4) CA certificate in Form No. 15CB will be required in payments made to non-residents which taxable and the amount during the year exceeds Rs.5 lakh. The amended Rules will become applicable from 01.04.2016. 2.Provision of mandatory reporting of fraud by auditor is effective from 14.12.2015. MCA. 3.CBEC also raises limit of filing of appeal by department to 10 lakhs and 15 lakhs before CESTAT and High court. For more News Like us on https://www.facebook.com/caonlineofficial