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FM asks states to cut VAT on petro products Finance Minister Arun Jaitley has written to all Chief Ministers urging them to reduce  Value Added Tax (VAT) on petroleum products used in the manufacture of goods as the current  system was leading to cascading of taxes on such goods under the Goods and Services Tax  (GST) regime. Currently, crude oil, natural gas, petrol, diesel and aviation turbine fuel are out of GST  purview. All other petroleum products fall under the new indirect tax. “The letter by Finance Minister highlights a concern being raised by the manufacturing  sector in the country regarding the rise in input costs of petroleum products happening on  account of transition to Goods and Services Tax regime,” the Finance Ministry said. “In the  post-GST scenario, manufactured goods attract GST while inputs of petroleum products used  in the manufacturing attract VAT and, therefore, it would lead to cascading of taxes.” “These pr...

‘There’s No Inconsistency in Data on Taxpayers’ The Central Board of Direct Taxes has said number of individuals filing income tax returns  jumped to 2.79 crore this year from 2.23 crore, an increase of 56 lakh as stated by Prime  Minister Narendra Modi in his Independence Day speech. The apex direct taxes body said  there is no inconsistency in the data. The statement comes after doubts were raised in some quarters over the data given out by  government at different points in time. “It is clarified that there is no inconsistency in  the data provided by the government in the statements referred to above as these are in  different contexts and for different time periods,” a CBDT statement said on Friday. The  Prime Minister's speech (on August 15) referred to the increase in number of e-filed  Personal Income Tax Returns (ITRs) filed from April 1, 2017 to August 5, 2017 over the ITRs  filed in corresponding period of earlier years. “T...

P-note investors return to Mauritius as FPIs Even as participatory notes (P-notes) become unattractive for taking positions, many investors are now looking to enter India using the foreign portfolio investment (FPI) route either through Mauritius or directly.  P-notes are overseas derivative instruments with Indian stocks as their underlying assets. Industry trackers say some P-note holders are looking to directly invest in India without setting up an investment arm in a buffer country .However, some of the other investors could route their investments through Mauritius.  The persons cited earlier said the newly registered FPIs will fall under category-III definition of the government and could start attracting higher taxes, going ahead.  Many P-note holders invest in In dian futures and options (F&O) on which they did not pay any tax until recently. Also the instrument provided anonymity to these investors. However, the market regulator recently took two st...

RBI identifies 40 more large loan defaulter accounts for clean-up Along with the 12 cases where bankruptcy proceedings have already started, these would account for 60-65% of the bad loans clogging the banking system The Reserve Bank of India (RBI) has identified 40 large defaulters as the next lot of firms where banks will push for an early resolution, a government official said on condition of anonymity.  Along with the 12 cases where bankruptcy proceedings have already started, these would account for 60-65% of the bad loans clogging the banking system, this person added.  An RBI spokesperson declined comment. A speedy resolution of these cases “will keep the banking system running”, the government  official said. He added that invoking the Insolvency and Bankruptcy Code won’t be the  default option for resolving these accounts and lenders will also look at other mechanisms  such as joint lenders’ forums. Indian banks are sit...

Filing a revised tax return is quite easy The revision has to be done before the prescribed deadline or before completion of  assessment, whichever is earlier If you are one of the last-minute filers of income-tax returns, it is quite possible that  mistakes have crept in some computation or other. For instance, you might have incurred  capital losses but haven’t offset it against capital gains or there could be some  additional income, such as bank interest income which you have forgotten to show. In such  cases, despite the final deadline of August 5 being over, you have the option to file a  revised return. After you have filed your return, the Central Processing Centre (CPC) in Bengaluru carries  out electronic processing of returns. It then issues an intimation which could convey the  demand due, refund payable, or it may simply say that nothing more is required. “In recent  times, the scope of matters that the CPC can look into ...

Black money drive: Govt to weed out dormant LLPs After cracking its whip on suspected shell companies, the government has turned its focus  on the growing number of Limited Liability Partnership (LLPs) firms. In suchapartnership, partners can´t be held liable for another´s misconduct or negligence. As a first step, the government is in the process of identifying and deregistering inactive  LLP firms. “The Registrar of Companies (RoC) is onaspree to strike off inactive LLPs from its  register,” says Vikas Gupta, partner, Nangia &Co. The government has been onadrive against generation of black money and money laundering  through use of shell companies. In his Independence Day speech, Prime Minister Narendra Modi said that the government had  identified over 300,000 shell companies and registrations of 175,000 such firms had been  cancelled. Experts point out, just like shell companies, inactive LLPs could be used for tax evasion  and ...

Insolvency regulator empowers property buyers, puts the monapar with creditors The insolvency regulator has brought inaspecial provision to protect the homebuyers of  beleaguered real estate companies such as Jaypee Infratech and Amrapali. The Insolvency and Bankruptcy Board of India (IBBI), which is implementing the Insolvency  and Bankruptcy Code, has said owner of undelivered properties can become part of the  committee of creditors and stakeaclaim equivalent to the amount they have paid to realtors Their claims, according to the regulator, would be treated onapar with claims of other  financial and operational creditors and would not be pushed to the bottom of the list. Homebuyers can now file form ´F´, introduced by the insolvency regulator, for claims. “Such entities should submit proof of their claims to the interim resolution professional  or resolution professional,”anotification issued by the IBBI on Wednesday said. This  section of ho...

Govt extends GST return filing deadline for cos who want to claim credit for past taxes The deadline for first GST Return, GSTR- 3B, has been extended (states are still coming up  with Notifications) to August 28 from its original deadline of August 20. However, one must  keep in mind that this is only for taxpayers who opt to use the opening balance of pre-GST  credit in the current month. Those who do not wish to claim opening credit in the current  month or those who have no credit; the deadline continues to be August 20.  The extended deadline also allows the taxpayers to file form TRAN 1 by August 28, which is  a pre requisite as per the strict interpretation of law to claim the opening credit.  “Interestingly, TRAN 1 filing system is not up and running yet on GST portal. The industry  raised the working capital issue as without filing TRAN 1 they could not have taken the  benefit of the opening credit, resulting in adverse cash ...

RBI minutes show MPC members flagged upside risks to inflation Concerns about economic growth and easing inflation prompted five of the six monetary policy committee  (MPC) members to call for a cut in the repo rate, but most warned that prices could start  accelerating, show the minutes of the panel’s last meeting, released on Wednesday. The comments reflected a tone of caution and flagged upside risks to inflation from farm loan waivers,  rise in food prices, especially vegetables, price revisions withheld ahead of the goods and services  tax, implementation of house rent allowance under the 7th pay commission and fading of favourable base  effect, among others. On 2 August, the panel chose to cut the repurchase rate—the rate at which the central bank infuses  liquidity in the banking system—by 25 basis points to 6%. One basis point is one-hundredth of a percentage point. Pami Dua, professor at the Delhi School of Economics, wrote that her ana...

BSE, NSE likely to begin audit of 100 suspected shell companies Stock exchanges BSE and NSE are likely to initiate audit on 100 out of 331 suspected shell companies  in the first batch in coordination with SEBI, sources told ET Now.  A panel of auditors will soon be appointed for first stage of audit of select 100 companies, sources  said.  All except a handful of 331 suspected companies are either non-operational or already barred from  trading on exchanges.  Sources said that freezing of promoters’ shares is being considered till probe concludes. Trading data  of all suspect shell companies being examined by bourses.  Out of total 331 firms, 162 are listed on BSE. Data available for 154 of these firms show one-third of  them, or 50 to be precise, have been reporting losses for four consecutive years now. Over two dozens  of them reported zero sales for last financial year. Yet, retail and high net worth individuals hold...

Sebi eases rules for lenders buying stake in distressed companies The relaxation will be subject to certain conditions, including shareholders' approval of the stake  acquisition by way of special resolution. Markets regulator Sebi has notified relaxed norms for stake purchase in distressed listed companies by  lenders, exempting them from making open offers for shareholders. The relaxation will be subject to certain conditions, including shareholders' approval of the stake  acquisition by way of special resolution. The Sebi decision comes against the backdrop of the government and the Reserve Bank of India stepping  up efforts to tackle the menace of bad loans, amounting to over Rs 8 lakh crore. The regulator has eased the norms for restructuring in stressed companies that are listed on exchanges  as well as resolution plans approved under the Insolvency and Bankruptcy Code, Sebi said in a  notification dated August 14. The move is aimed at f...