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NEW DELHI: Niti Aayog vice-chairman Arvind Panagariya called for a simpler tax regime, elimination of exemptions and precise taxation rules to minimise discretion to prevent the accumulation of black money and build on the benefits that will accrue from demonetisation. “To discourage the creation of black money and curb corruption, we will also need to tackle election funding,” Panagariya told ET in an interview, backing the Election Commission’s call for a cap on anonymous donations at Rs 2,000.  “There is also a proposal for state funding of elections, which may be considered.” Tax reforms will also help lower rates, encouraging savings and boosting revenue through greater compliance. He said demonetisation is likely to bring significant gains in tax revenue, which may allow the government to raise expenditure without violating any of its fiscal goals. Panagariya said without data it may be difficult to estimate impact of demonetisation on the economy in current year but “we wil...

RBI withdrew rules that required bank customers to make deposits of above Rs 5,000 in old notes Facing intense criticism, the Reserve Bank of India (RBI) on Wednesday withdrew rules that required bank customers to make deposits of above Rs 5,000 in old currency notes at one go and only after satisfying officials with reasons for not doing so earlier. In the modified circular on its website on Wednesday afternoon, the central bank said two sub-paragraphs of the original circular “will not apply to fully KYC compliant accounts.” This means there would be no restriction on cash deposits — neither on the amount, nor on the number of times money could be deposited. The latest notification is the 60th from the North Block-Mint Road combine in the past 43 days. The central bank faced a barrage of criticism on social media throughout the day, while many said they had trusted the prime minister and the finance minister, who had advised them to not extend queues outside banks and ATMs, as they ...

The Goods & Services Tax (GST) Council will meet on Thursday and Friday to take up drafts of the model GST, integrated GST and states' compensation Bills.   The aim will be to address the contentious issue of administrative turf  between Centre and  states.  Tax experts say this will be difficult. The Centre might push a cross-empowerment model of random choosing and division of five% of the assessees between Centre and the states, using a computer programme. The parameters on which the assessees could be chosen would be in-built in software written for this purpose.   However, states want sole control over assessees up to Rs 1.5 crore of annual turnover.   Naveen Wadhwa of Taxmann thinks a solution could be found outside the suggested models. He says states could have sole control over assessees up to Rs 1.5 crore of turnover if their supplies are intra-state; above that, the Centre should. If supplies are inter-state, the Centre should have control o...

Despite uncertainty over the goods and services tax (GST) roll-out, the information technology backbone GST Network (GSTN) has initiated the process to migrate over eight million taxpayers on its system. The enrolment drive kicked off last month with Puducherry and Sikkim, and covered 19 more states and Union territories, including Maharashtra, Goa, Chhattisgarh, Gujarat, Jharkhand and Madhya Pradesh. GSTN has worked out a timeline to switch all value added tax, excise duty and service tax payers to the GST network by March 20, 2017. The 15-day enrolment window for value-added tax payers in nine states, including Delhi, Punjab and Uttarakhand, is open till December 30. “It is good that GSTN is sticking to its timeline to migrate taxpayers to its network, as all procedures must be complete before the roll-out. In states covered so far, about 70 per cent of the traders must have already enrolled on the platform,” said Praveen Khandelwal, secretary general, the Confederation of All ...

With more instances of bank employees helping launder black money during the demonetisation drive surfacing, the finance ministry has sought a report from the Reserve Bank of India (RBI) on whether banks compromised on so-called know-your-customer norms, said two people directly familiar with the matter, including a finance ministry official. The ministry’s move was prompted by investigations by the income-tax department, the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) that prima facie established the involvement of some bank officials in such money laundering. “While the investigative agencies are doing their bit, we are seeking a report from the central bank on whether there is a systemic concern or case of few ‘bad apples’,” said the finance ministry official cited above, who asked not to be identified. Spokespersons for RBI and the finance ministry did not respond to emails seeking comment. In the past 20 days, as many as eight banks have be...

Employees’ Provident Fund Organisation (EPFO) has proposed an amnesty for employers who have failed to get workers to sign up for the tax-exempt employee’s provident fund (EPF) scheme that aims to bring more workers under the social security net. According to the ‘Enrolment and Establishment coverage campaign, 2017,’ proposed by EPFO at its apex body meeting in Bengaluru on Monday, employers can get workers signed up now with a nominal penalty of Re1 per year of delay. The penalty otherwise applicable is 5-25% of the shortfall in contribution, depending on the period of delay. The move gives an opportunity to all principal employers such as large state-run and private companies that hire contractors for specific projects to ensure that workers who are indirectly employed also get social security benefits. Any worker who should have joined the scheme between 1 April 2009 and the end of this year, is eligible to join EPF now during a three-month window starting 1 January 2017, sa...

The government is trying various ways to plug the loopholes so that the motive behind the demonetisation move is not defeated. One of its targets was bringing out unaccounted wealth. In this regard, different government departments are coming up with new circulars, notices and press releases regularly. In a recent notice, the Central Board of Direct Taxes (CBDT) stated its concern regarding filing of revised income tax returns by tax payers. CBDT stated in the notice that, “any instance coming to the notice of income-tax department, which reflects manipulation in the amount of income, cash-in-hand, profits, and fudging of accounts may necessitate scrutiny of such cases.” It can further lead to penalty or prosecution as well. So, if you are filing a revised tax return, here’s a look at which of the changes can attract scrutiny. Revising a return Once you file an income tax return, you are allowed to file a revised return under section 139(5) of the Income-tax Act, 1961. You ca...

The government on Friday notified the rules by which companies can go through liquidation under the Insolvency and Bankruptcy Code, 2016. The regulations for the liquidation process are part of the rules being notified by the Insolvency and Bankruptcy Board of India to implement the code and, in the process, improve ease of doing business in India. Mint New Delhi,17th December 2016

Capital markets regulator Securities and Exchange Board of India (Sebi) on Friday said commodity derivatives exchanges having annual turnover of more than Rs5 trillion in previous financial year will be considered as systemically important financial market infrastructures (FMIs). Currently, all commodity exchanges themselves are clearing and settling trade executed on their platforms. They are acting as central counterparties (CCP) in these markets. FMIs are required to comply with the principles of financial market infrastructures (PFMIs) specified by IOSCO (International Organisation of Securities Commissions). The PFMIs comprise 24 rules for providing effective regulation, supervision and oversight to financial market infrastructures. They are designed to ensure that the infrastructure supporting global financial markets is robust and well placed to withstand financial shocks. In a circular, Sebi said that it “has been decided that commodity derivatives exchanges (currentl...

Reaching out to whistleblowers to curb the black money menace, the government on Friday unveiled an e-mail address to allow people to send information about tax evaders. The government also notified the disclosure scheme, Pradhan Mantri Garib Kalyan Yojana (PMGKY), a three-and-a-half-month window opening on Saturday (till March 31, 2017), to declare income by paying 50 per cent tax and lock in a quarter of the deposits for four years. The e-mail ID, blackmoneyinfo@incometax.gov.in, will be monitored by a cell, which will take immediate action on the tip-offs they receive. “A new e-mail ID created for people to give information on black money to tax authorities. People can give information about those trying to convert black money into white on this e-mail address,” said Revenue Secretary Hasmukh Adhia after the notification of PMGKY. Payments under PMGKY will have to be made before filing a declaration. Unlike under Income Declaration Scheme, which ended on September 30 whe...

The Reserve Bank of India (RBI) on Friday instructed banks and other prepaid instrument service providers not to charge any fee, till March 31, 2017 for transactions charges up to Rs 1,000 using Immediate Payment Service (IMPS), USSD-based *99# and Unified Payment Interface (UPI) systems. The temporary measures have been taken in view of the scrapping of old currency notes and to “incentivise greater adoption of digital payments by large sections of the society,” RBI said in its notification. The measures will be effective January 1, 2017. “In the intervening period, the Reserve Bank of India will facilitate a review of the charges under the aforesaid channels by the concerned stakeholders,” the RBI notification stated. Business Standard New Delhi,17th December 2016