CA Online

BJP leaders also reached out to friendly parties to shore up the National Democratic Alliance (NDA) numbers for Friday's no-confidence motion On the eve of the no-confidence motion in the Lok Sabha, the Narendra Modi government on Thursday built a narrative to showcase its efforts at curbing corruption, while the Opposition tried to punch holes in its claims.  Aware that opposition parties would demand answers on the government’s purported failure on the anti-corruption front — a plank that helped the Modi-lead Bharatiya Janata Party (BJP) sweep the 2014 elections — the government successfully pushed the Fugitive Economic Offenders Bill through the Lok Sabha, while the Rajya Sabha passed a Bill that seeks to amend the Prevention of Corruption Act, 1988. After criticism that it was attempting to dilute the Right to Information Act, including from Congress president Rahul Gandhi who said the amendments would make the law "useless", the government deferred its introduc...

The Centre and state governments would have to amend the GST law if the proposal is approved by the Council in its next meeting on July 21 The GST Council will consider setting up of a National Appellate Tribunal in Delhi with three regional benches with members from judiciary as well as tax departments to hear appeals against the order of the appellate authority set up by states under the GST regime.  According to the proposal which will be placed before the Council on July 21, three benches of the national appellate tribunal would be set up at Mumbai, Chennai and Kolkata.  The proposal is aimed at dealing with the problem faced by industry on account of contradictory orders passed by Authority for Advance Ruling (AAR) in different states. It has also been observed that most of the AAR orders are in the favour of the revenue department as these authorities are manned by tax officials.  Industry has been demanding that an independent judicial member should preside o...

The government on Wednesday introduced in the Lok Sabha the Banning of Unregulated Deposit Schemes Bill, 2018, which seeks to protect small investors from ponzi schemes and prevent unregulated entities from collecting deposits from individuals.  The bill plugs the loopholes in existing laws and gives powers to the government to stop companies from soliciting such funds. Once the bill is passed by the legislature, people running ponzi schemes could face a jail term of up to 10 years and a penalty of up to Rs.50 crore.  “It (the bill) seeks to put in place a mechanism by which the depositors can be repaid without delay by attaching the assets of the defaulting establishments,” the explainer to the bill said. In a ponzi scheme, companies or individuals typically seek pubment”, lic funds promising high rates of interest. The bill was envisaged after the arrest of Saradha Group chairman and managing director Sudipta Sen following defaults in repayments, followed by the Rose Val...

A meeting of bankers will take place on how to revive it. Reforms have happened already, like implementation of the Real Estate Act Piyush Goyal, the officiating finance minister, will interact with bankers on Thursday regarding ways to boost the real estate sector.  A ministry source said, “The sector provides a lot of employment and is important. A meeting of bankers will take place on how to revive it. Reforms have happened already, like implementation of the Real Estate (Regulation and Development) Act.”  Others said banks, realty entities and the ministry will have to work together on this. “With a regularised market, the quality of lending will improve. The emphasis has shifted from pre-promotional launches to fully constructed ones. Bankers will find a larger opportunity to fund construction activities,” a banker said. Earlier, builders used to come with a proposal, they used to raise money from the market and there was no one to check if they were constructing or...

The government wants to avoid controversial FRDI Bill 2017 ahead of the general election due in 2019 The National Democratic Alliance (NDA) government has decided to withdraw the contentious Financial Resolution and Deposit Insurance Bill 2017, or FRDI Bill, and is awaiting the cabinet’s nod to move Parliament for this as the government looks to avoid controversial legislation ahead of the 2019 general election.  A decision has been taken internally to withdraw the bill, but the Cabinet needs to clear the proposal, said a finance ministry official on condition of anonymity.  A cabinet meeting on Wednesday chaired by Prime Minister Narendra Modi did not take up the proposal. The bill has been criticized for some of its controversial provisions, including a “bail-in” clause, which suggests that depositor money could be used by failing financial institutions to stay afloat.  The lack of clarity over protecting existing levels of deposit insurance for smaller deposits a...

The Goods and Services Tax (GST) Council, will not take up proposals to include natural gas and jet fuel within the ambit of the new indirect tax at its next meeting on Saturday, as most states have failed to meet revenue collection targets, a person aware of the development said.  The oil ministry and the civil aviation ministry are keen to have natural gas and jet fuel included in GST.  These demands will be considered when the time is appropriate, the person said, requesting anonymity. Instead, the council will consider slashing tax rates on a few items including forest produce used by the poor such as plates made of leaves, sanitary napkins and handicraft items.  The council has also turned down demands for a rate cut from paint and cement industries, among others, in view of possible revenue loss to the exchequer, the person said. “Revenue consideration is vital in decisions regarding tax rates as only a few North Eastern states have managed to meet the project...

Action is always against owner... However, it’s the builders, contractors and architects who violate laws MB LOKUR, Supreme Court judge The Supreme Court on Wednesday directed the civic bodies to resume sealing and demolishing unauthorised shops and encroachments in the national Capital and gave the Centre two weeks to frame rules to crack down on builders, contractors and architects who violated municipal by-laws while constructing residential complexes.  The directive to resume sealing was issued by the bench of justices MB Lokur and Deepak Gupta after attorney general KK Venugopal, appearing for the Union urban development ministry, denied that Land and Development Office (L&DO) of the ministry had instructed the municipal bodies in Delhi not to carry out the drive, as alleged by a court-monitored panel entrusted to oversee the sealing drive in the city. “Based on the affidavit filed (by Urban development ministry) we direct that there will be no stoppage of sealing or...

This follows a 54-page action plan drawn up by the CBDT, where an aggressive strategy was outlined to nab tax dodgers Banking companies, co-operative banks, trustees of mutual funds (MFs), post offices, registrars, and others who are mandated to file the statement of financial transaction (SFT) report on high-value transactions have come under the income-tax department’s (I-T) scanner. The Central Board of Direct Taxes (CBDT) has directed tax sleuths to conduct quarterly ‘survey and inspection’ of these entities to determine the correctness of the statement filed by them.  To track high-value cash transactions, the centre had in January 2017 put out a new rule wherein it had mandated all goods and services providers to report to the I-T department high-value cash transactions and cash receipts. Under the new norms, cash receipts, purchase of shares, MFs, immovable property, term deposits, sale of foreign currency, etc, will have to be reported to tax authorities in a prescrib...

FDI inflows in the servicesNSE -0.38 % sector declined by about 23 per cent to  USD  6.7 billion in 2017-18, according to the Department of Industrial Policy and Promotion (DIPP).  The sector had attracted FDI worth $8.68 billion in 2016-17. The services sector includes finance NSE 0.63 %, banking, insurance, outsourcing, R&D, courier, tech testing and analysis.  As far as overall FDI inflows are concerned, the growth rate recorded a five-year low of 3 per cent at  USD  44.85 billion in 2017-18.  According to Anis Chakravarty, Lead Economist and Partner, Deloitte India, the slowdown in FDI could be because of re-routing of investments to economies like the US which witnessed an increase in interest rates together with a stronger dollar.  "Expectations of further rate hikes by Fed, along with the tariff issues, this year can be expected to result in a further slowdown in foreign inflows.  "The declining growth rate of FDI is more of an...

FOCUS ON SERIOUS CASES UNDER COMPANIES ACT Committee will look at decriminalising certain offences & resolving most cases without approaching courts The government is looking to decriminalise some of the offences in the Companies Act of 2013 so that courts are freed of these cases to focus on more important ones.  The ministry of corporate affairs (MCA) has set up a 10-member committee to review the penal provisions in the Act.  The committee, to be headed by the MCA secretary, may propose decriminalisation and suggest ways in which to replace the provisions with an in-house mechanism, where a penalty could be levied in instances of default. “This would also allow the trial courts to pay more attention on offences of serious nature,” MCA said in a statement. The committee, which has Uday Kotak, Shardul S Shroff, Sidharth Birla and Bankruptcy Law Reforms Committee chairman TK Vishwanathan among its members, will submit its report with recommendations within 30 days ...

The GST amendments will be tabled in the upcoming monsoon session of Parliament beginning 18 July The government is likely to retrospectively amend laws governing the goods and services tax (GST) to deny transitional credit to taxpayers against cesses levied in the earlier indirect tax regime.  If it goes through with its plan, the Narendra Modi government will be going back on its promise of not making retrospective amendments to tax laws that have an adverse impact on taxpayers. The proposed amendment to the GST law seeks to explicitly exclude cesses levied in a pre-GST regime from allowable transitional credit that can be claimed by companies. Under the transitional credit provision, companies were allowed to claim tax credit against levies such as value added tax and service tax on stock purchased before implementation of GST for a limited period.  Many companies availed the transitional credit facility seeking input tax credit also for cesses such as the Krishi Kaly...