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A body representing foreign portfolio investors (FPIs) has written to the Securities and Exchange Board of India (Sebi) seeking relaxation of rules related to block deals. Asia Securities Industry & Financial Markets Association (ASIFMA) has asked for extension of `time window' for block deals and relaxation of `order limit.' Block deal is a trade with a minimum quantity of 5 lakh shares or minimum value of Rs 5 crore, executed through a single transaction, on a special window. The window is open for only 35 minutes during morning trading hours. The transaction price of a share ranges from +1% to -1% of the previous day's closing or the current market price. These transactions take place on a delivery basis.Usually, block deal happens when two parties agree to buy or sell securities at an agreed price and inform the stock exchange. “We understand the Sebi is not in favour of introducing more flexibility for block trades, we continue to maintain that this is a majo...

Industry players write to CBDT seeking exclusion of inter-se transfers, other transactions India Inc has sought exemptions and more clarity on the government’s proposal to levy capital gains tax on shares acquired through non-payment of the securities transaction tax (STT). Sources said the Central Board of Direct Taxes (CBDT) had received over a dozen recommendations from shareholders seeking widening of the negative list proposed in the draft notification. The CBDT earlier this month proposed only three scenarios under which capital gains tax would be levied. However, one of the conditions, that listed shares not purchased from stock exchanges would be liable for tax, has created confusion among market players. Inter-se promoters’ transfer among group entities; direct allotment of shares such as qualified institutional placement; acquisition of shares by conversion of a debenture or loan; and acquisition of shares through gifts are some of the transactions that industry players h...

Guidelines on compliance with Accounting Standard (AS) 11 [The Effects of Changes in Foreign Exchange Rates] by banks - Clarification RBI/2016-17/281 DBR.BP.BC.No.61/21.04.018/2016-17 April 18, 2017 All Scheduled Commercial Banks (excluding Regional Rural Banks) Madam / Dear Sir, Guidelines on compliance with Accounting Standard (AS) 11 [The Effects of Changes in Foreign Exchange Rates] by banks - Clarification Please refer to  circulars DBOD.No.BP.BC.76/21.04.018/2004-05 dated March 15, 2005  and  DBOD.BP.BC.No.76/21.04.018/2005-06 dated April 05, 2006  on the captioned subject. 2. It has been observed that banks have been recognizing gains in profit & loss account from Foreign Currency Translation Reserve (FCTR) on repatriation of accumulated profits / retained earnings from overseas branch(es) by treating the same as partial disposal under AS 11. 3. The matter has been examined taking into consideration, inter alia, the views of the Institut...

Rajasthan, Bihar call special sessions on April 24; Assam will also have a similar one by May Rajasthan and Bihar have called special sessions of their respective Assemblies to pass the State Goods and Services Tax (SGST) Bills on April 24. Assam, too, is likely to have a special session of its Assembly to pass the Bill by the second week of May, said a senior official of the state government. Telangana was the first state to pass the SGST Bill. Its Assembly approved it unanimously last Sunday. Rajasthan and Assam have Bharatiya Janata Party (BJP) governments. The parties and alliances at the helm in Bihar and Telangana are not part of the BJP-led National Democratic Alliance. That these two states have been proactive about getting the Bill passed underscores Union Finance Minister Arun Jaitley’s repeated claim that negotiations over the GST rules and laws were carried out in an atmosphere of consensus. All 29 states and two of the Union territories that have legislatures — Delhi a...

Corporate social responsibility (CSR ) compliance improved in India in 2015-16 with companies managing to effectively spend almost 92% of their budgeted CSR expenditure, according to the CII's Annual CSR Tracker survey. Section 135 of the Companies Act of 2013 requires companies need to spend at least 2% of their average net profit for the immediately preceding three financial years on CSR activities. The survey report said 1,270 BSE-listed companies collectively spent Rs 8,185 crore for FY16 with a cut-off date of December 2016. Interestingly, as per replies filed in the parliament by the minister of state for corporate affa irs Arjun Ram Meghwal, the total CSR expenditure for 5,097 companies in FY16 amounted to Rs 9,822 crore. The survey noted that the CSR performance of companies with respect to requirements of the Companies Act substantially improved over the last year. The results were based on company disclosures and reports filed with the Bombay Stock Exchange (B...

To avoid complexity, govt looking to keep single rate for each product group. After having opted for multiple rates under the upcoming goods and services tax (GST) regime, India is now looking to keep variations in rates on the same types of products at a minimum to ensure that the tax structure does not get any more complicated. For example, all types of footwear or mobile phones could attract the same rate. “Single rate for one product gro up will bring simplicity in the structure and make implementation easier,“ said a government official, adding that differing rate structures within one segment could lead to unnecessary disputes and litigation. GST is expected to be rolled out on July 1. Globally , most regimes have a single rate. India has adopted a four-tier tax structure of 5%, 12%, 18% and 28%. The rate applicable on most products will be 18%. The highest rate has been pegged in the GST law at 40%. Many experts have said this structure will undermine the basic tenet...

Cash and ATM management companies will soon be allowed to attract 100 per cent foreign direct investment as they are not required to comply with the Private Security Agencies (Regulation) Act (PSARA).Aclarification to this effect is likely to be issued by the home ministry shortly. The clarification will be against the backdrop of the confusion among firms in cash and ATM management relating to compliance with the Act, under which they can receive FDI only up to 49 per cent. The issue was discussed atameeting convened by the Prime Minister´s Office (PMO) last month. “In that meeting, it was decided that the home ministry would be asked to issueaclarification that these companies will not have to comply with PSARA and would be eligible to attract 100 per cent FDI,” an official said. There are aboutadozen cash management players in the country, including Writer Safeguard, SIS Securitas, CMS, Secure Value, Logicash, Brinks Arya, Securitrans and Scientific Security Management S...

Sebi board to consider tweaking rules to prevent laundering of black money The regulator plans to put in place a clear bar on non-resident Indians (NRIs) and entities owned by them and resident Indians subscribing to participatory notes, a move aimed at preventing possible round-tripping or laundering of black money. The Securities and Exchange Board of India (Sebi) is set to tweak its regulations to this effect at its upcoming board meeting on April 26 after the finance ministry recently wrote to the regulator. Such a restriction is already implied through the answer to a frequently asked question (FAQ) but the regulator feels this lacks legal sanctity. “Most of Sebi's FAQs themselves clearly state that they should not be regarded as interpretation of law, and that they should not be treated as a binding opinion or guidance from Sebi,“ said Moin Ladha, associate partner, Khaitan & Co. “Therefore, in case of any contradictions between the regulations and FAQs, the r...

It is a proposed new indirect tax regime, where one commodity will have the same rate, pan-India. There could be exceptions based on local importance, in which case those would be exempt. Input tax credit Refunds for taxes paid on input. This would be done in each stage, so that there is no cascading tax on tax. How is it different from now? In GST, only two buckets will have to be created to get input tax credit — one for State-GST and another for Central-GST. Currently, if companies are selling in, say, seven states, they have to make seven buckets for taking input tax credit in value added tax (VAT). Similarly, for excise duty, they have to make as many buckets as there are manufacturing units. For services, only one bucket is required.  Filing of statements and returns They will have to file a statement of outward supplies by the 10th of the next month of sale, statement of inward supplies or inputs by the 15th of the next month and returns by the 20th of the ne...

Indian taxpayers typically wait till the last moment to file their tax returns. This habit is expected to linger in the regime of the goods and services tax (GST), which would be rolled out on the goods and services tax network (GSTN) throughout the country. The GSTN anticipated this last-minute rush and designed its system to withstand a massive surge in transactions in the last few days. “We have designed the system in a such a way that almost 50 per cent of the registered taxpayers with the GSTN can upload their files (invoices) concurrently in the last few days. Though it may take some time to process all files simultaneously, our system will not crash,” a confident Prakash Kumar, chief executive officer of the GSTN, told Business Standard, while demonstrating how the system would work. Kumar said the GSTN had set up servers in Delhi and Bengaluru to handle the transactions through its portal. It is creating a capacity to handle three billion invoices a month. Officials...

CBDT probes property deals, foreign exchange remittances The income tax department (I-T) has widened the net to nab tax evaders who have not just deposited unaccounted cash during the note-ban period but have also made high-value property deals and sent money abroad under the guise of outward remittances in the second phase of Operation Clean Money, which kicked off last week. The tax department last week identified 60,000 individuals; 1,300 of them were termed high-risk under the second phase of Operation Clean Money to detect the generation of black money in the system. “The shortlisting of these individuals was not only based on cash deposits but also included other crucial factors,” said Central Board of Direct Taxes Chairman Sushil Chandra in an exclusive interaction with Business Standard. These 1,300 individuals have been described as “high-risk”, mainly due to their real estate deals and land purchases, which were found to be excessive compared with their tax profil...