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Service tax authorities refer matter to RBI, enforcement directorate Multinationals that have challenged service tax levies on salaries paid overseas to expats employed in India may be faced with a more fearsome challenge -scrutiny under the Foreign Exchange Management Act (FEMA), which deals with forex violations. Remitting the salary of anyone employed in India by an entity in the country in foreign currency is not permitted under FEMA, said an official. Service tax authorities have already referred the matter to the Reserve Bank of India and the Enforcement Directorate (ED), the person said. Tax authorities contend that companies may have not declared payments as salaries to their employees in the country while seeking permission from RBI before making fund transfers. “Authorities need to ascertain how these transfers are being made,“ said the official cited above. Typically, companies that employ expats pay a part of the salary in India while the rest is paid by the oversea...

www.caonline.in News... 1.Small tobacco pouches weighing less than 10 grams not subject to retail sale price based assessment. [CCE, vs. Shakti Zarda Factory (India) Pvt. Ltd. (CESTAT New Delhi)]. 2.RBI amends provisioning norms in respect of fraud cases. 3.Facebook friends may be treated as connected for insider trading [In the matter of trading in the shares of Palred Technologies Limited (SEBI)]. 4.RBI vide circular dated April 13, 2016 has resolved the ambiguity under section 160 of the Companies Act, 2013, where it is provided that a person who intends to nominate himself or any other person as a director in an Indian company is required to place a deposit with the said company and clarified in this regard that deposits with an Indian Company by person resident outside India, in accordance with section 160 of the Companies Act, 2013 is a current account (payment) transaction and, as such, does not require any approval from Reserve Bank. 5.Today (21.04.16) is the last date f...

Sebi has launched a probe against some brokers for alleged mis-selling of products with promise of assured returns in connection with the Rs 5,600-crore NSEL payment fiasco. Details are being sought from five to six leading brokers, having high exposure to NSEL, sources said. Business Standard New Delhi,20th April 2016

Ravi Chopra holds securities of several companies, but doesn’t keep a track of the cash benefits, including dividends, accruing from his investments. He also isn’t certain if all the dividends and interests earned by him get credited to his bank account. The Securities and Exchange Board of India (Sebi)'s proposal to distribute cash benefits through depositories, such as Central Depository Services (CDSL) and National Securities Depository (NSDL), could make the stock market journey a little simpler for investors like Chopra. Sebi has proposed a model where benefits, including dividend, interest and redemption proceeds, may be distributed for securities held in demat form. Currently, the process is handled by issuer companies either directly or through registrars. Sebi’s proposal will require issuers to transfer the total amount due to investors to a depository, which will then distribute these to beneficial owners. Depositories, which send investors a statement of their hold...

Finance Minister Arun Jaitley has virtually rebutted RBI Governor Raghuram Rajan’s remarks that India is ‘one-eyed king in the land of blind’ saying compared to the rest of the world, the Indian economy was growing much faster and, in fact, the fastest. At 7.5 per cent growth rate any other country in the world would be celebrating but it is a tribute to India’s growth story that at this rate “we are still impatient because we know that our potential is to do distinctively better”, he said. Jaitley was reacting to a question by CNBC TV18 on Rajan’s remarks last week that at 7.5 per cent growth rate India seemed to be ‘one eyed king in the land of blind’. “Compared to the rest of the world we are growing much faster, in fact the fastest. Compared to our own potential, we can do better,” he said. On the potential to do distinctively better, Jaitley said, “I see a couple of variables (like good monsoon and reforms) — if they work to our advantage, we can do much better.” “Assumi...

The Reserve Bank of India (RBI) will strive to develop government bond market domestically and will open up the market to foreign investors in a calibrated manner, said H R Khan, RBI's deputy governor. The central bank will also try to provide "better communication of the debt management policy to avoid uncertainty in the minds of investors," Khan said. "Based on experience, the feasibility of gradually opening up certain segments/tenors fully in order to enable inclusion of Indian G-Sec in global bond indices could be a possibility," Khan said. With incremental opening up of the capital account and the increasing internationalisation of Indian rupee, "greater play by global investors in onshore markets would become inevitable," he added. Business Standard New Delhi,20th April 2016

The Reserve Bank of India (RBI) will continue to intervene in the currency market, as volatility in exchange rate can impact some of the country’s institutions, which might not be as robust as those in developed markets. “There is a school of thought that says: Let the exchange rate move wherever it will,” RBI governor Raghuram Rajan said at the Inaugural Kotak Family Distinguished Lecture held at Columbia Law School in New York. “That’s something we could do,” Rajan said. “But in emerging markets, with institutions not as strong as industrialised countries, you find there are collateral effects of both the capital moving in and going out.” To prevent such collateral damage, the central bank will intervene in the currency market when there is a sustainable risk in global markets and the country sees a flood of capital coming in, he said. The exchange value should reflect the country’s underlying fundamentals of trade and services. “We really don’t want the currency to move ...

If you bought property worth more than Rs.50 lakh and did not deduct tax at source (TDS) or failed to deposit the amount with the income tax department on time, you may have to pay a penalty of up to Rs.1 lakh. Several taxpayers recently received notices from the department for not doing so. Anyone buying real estate worth more than Rs.50 lakh has to deduct 1% of the price of the property before paying the seller. That 1% TDS has to be deposited with the tax department using Form 26QB. “The income tax department recently matched the TDS data with the data they received from the property registrar for property transac tions over Rs.50 lakh. Wherever there was a discrepancy , either the buyers failed to deduct or deposit the TDS, a notice has been sent,“ said Vaibhav Sankla, director, H&R Block. While the rule has been in effect since June 1, 2013, many buyers are unaware or often confused about how to calculate the tax. TDS has to be calculated on the total sale price and no...

The government has identified 7,500 cases related to service tax and Customs it plans to withdraw from tribunals and high courts. These cases are where the disputed tax is below the threshold set in December at Rs 10 lakh for the Customs Excise & Service Tax Appellate Tribunal (CESTAT) and Rs 15 lakh for high courts. The Central Board of Excise and Customs (CBEC) has started filing applications with the tribunals and high courts seeking withdrawal of the cases. The step was taken to make the tax regime non-adversarial, with a focus on quality rather than meeting collection targets, officials said. "We have begun the process of withdrawing cases. We have identified approximately 7,500 cases in the CESTAT and the high courts. Now, it is up to the judicial bodies to allow the withdrawal," said an official. The CESTAT is an independent appeals forum against orders passed by commissioners of customs and excise relating to service tax, customs and central excise. Th...

Under fire from trade unions, the Employees’ Provident Fund Organisation (EPFO) has rolled back its decision to tighten provident fund (PF) withdrawal norms. This is the second rollback in EPFO withdrawal norms. Earlier, the government was forced to reverse the Budget proposal to tax 60 per cent of the PF corpus at the time of withdrawal, following widespread protests. “Considering the representations received from various quarters and after consultations with the various stakeholders, the government has decided to withdraw the February 10 notification with immediate effect,” the labour ministry stated. Labour Minister Bandaru Dattatreya announced the roll back in Hyderabad on Tuesday, hours after saying the implementation of the new norms was put on hold till July 31. In February, EPFO had issued a notification saying the employer’s contribution to the PF corpus could be withdrawn only after the employee turns 58 years of age. According to EPFO rules, 12 per cent of an emp...

www.caonline.in News... 1.Sec. 244A: Interest payable on refund of excess self assessment tax. [CIT vs. Birla Corporation Limited (Calcutta HC)]. 2.NIRC of ICAI is organizing seminar on International Taxation on 23 April at 10am at India Habitat Centre (Jacranda Hall) Lodhi Road, New Delhi. www.nircseminars.org 3.Members / firms are required to update PAN details to ICAI, otherwise they would not be able to upload tax audit reports and MCA forms online. 4.Government of India rolls back Provident Fund (PF) withdrawal restrictions. 5.MCA-21 portal provides note of common queries related to annual filings, linked filings, cancel SRN service, resubmission, and additional fee waiver. 6.Service tax return (ST-3) for Oct 15 to Mar 16 period is now available for e-filing in both offline and online modes. Last date for filing the return for the period is 25th April, 2016. For more News Like us on https://www.facebook.com/caonlineofficial Or Subscribe on mail visit : www.caonline.in