CA Online

India must align domestic laws with international treaties A recent ruling of the Punjab & Haryana High Court ( HC) in the Serco BPO case has once again underlined the need for consistency between tax policies and the jurisprudence that evolves around it, thus, leaving little to interpretational hazards. The HC, while confirming the eligibility to capital gains tax exemption under the tax treaty, held that the shareholders (Barclays and Blackstone) were entitled to such a benefit on the basis of the tax residency certificate ( TRC) issued to them. The HC alluded to apex court’s observation in the Azadi Bachao Andolan case, and obitered that negotiation of treaties and composition thereof are sovereign functions, involving important aspects of tax policies, and should be left to executive’s discretion. The ruling should enthuse foreign investors, especially those who have held investments in Indian assets from their Mauritius investment holdings, since it reinforces sanctity o

According To to the latest data available from the Reserve Bank, which is from May this year, there are 21.5 million credit cards operational in India. The total credit outstanding is Rs.32,400 crore. The average comes to about Rs.15,000 per card. That doesn’t sound like much, but there’s a catch in this data. The average outstanding is per card, not per person. There certainly aren’t 21.5 million distinct individuals in India who have credit cards because anecdotally, one knows that a lot of people who have credit cards have more than one, often more than two. It’s also clear anecdotally that excessive credit card usage is a widespread problem, especially among young people who have started earning recently. Of course, excessive borrowing is hardly a personal issue alone. From individuals to companies to governments, excessive borrowing, interest costs and the fear of how this will ever come under control seems to be the primary source of problems in the world economy. Even the mo

The Delhi High Court has observed that if the central and state governments were not treating e-commerce sites such as Flipkart and Amazon as retailers for foreign direct investment (FDI), they cannot be treated as retailers for taxation purposes. Justice Rajiv Sahai Endlaw was of the “prima facie” view that if governments were treating transactions by e-commerce sites as retail sale for tax purposes, then how can they say these firms are not retailers for receiving FDI. “Prima facie, the Union of India/state governments cannot, on the one hand, for the purpose of tax, treat such sales as retail and on the other hand, for the purposes of investment, not treat the same as retail sale,” the court said. The observation by the court came while hearing a plea alleging that e-commerce sites are violating FDI policy by retailing goods through Internet. The court has also issued notices to the Centre, Delhi gover nment, Reserve Bank of India and the Enforcement Directorate, seeking t

All eyes on governor Rajan, falling inflation could be silver lining Reserve Bank of India (RBI) governor Raghuram Rajan is widely expected to cut interest rates on Tuesday, a move thatat will bring down EMIs for home loan borrowers and help companies raise cheaper funds to aid expansion plans. Inflation rates in India are currently at historic lows. While wholesale price index (WPI) –based inflation fell 4.95% in August, compared to a 4.05% decline in the previous month ,h retail inflation rose 3.66%, slower than the 3.69% increase in July. The plunge in inflation rates has triggered hopes that Rajan would likely cut interest rates inn the monetary policy review onn September 29. The government has also made it more than obvious that it wants the RBI to cut rates, given the wider elbow room thee central bank enjoys from the cur-rrently “deflationary” trends inn the economy. Rajan has cut the repo rate— the rate at which banks borrow from the RBI — by 0.75 percent-tage points

Updates Of the Day 1.STBA is organising conference on GST and Indirect Taxes on Friday, 16.10.15 at Sri Sathya Sai Centre, Lodhi Road, New Delhi. fee Rs. 1000/-. For registration call Adv. Suresh Agarwal 9810197362. 2.Restrictions on input tax credit under Haryana VAT Only to the extent of output tax in case of interstate sale. Notification No. 22/ST-1/H.A.6/2003/S.59/2015 dated 7th Sep, 2015. 3.New forms AOC-4 (Non-XBRL Form), MGT-7, ADT-2 & SH-9 released and available for filing w.e.f. 25.09.2015. 4.Directorate of central excise intelligence, Chennai zonal unit arrested director of a Chennai based limited company providing it software services for failing to remit the service tax collected to the government exchequer. 5.Buyer is entitled to avail credit of duty paid by the seller even if it has been wrongly paid- Heena Pack Pet P Ltd. (Delhi Cestat) 6.Non attendances of assessment proceedings due to CA busy in tax audits in the month of September held reasonable cause for

At the government’s urging, the Securities and Exchange Board of India ( Sebi) intends to begin talking to global fund managers for investing pension money in this country. According to sources, the regulator is making a list of pension funds that are likely to look at India as an investment market. “ A list of global jurisdictions that the regulator can work with is being figured out. Additionally, it is studying how these funds are distributed worldwide,” said one. Recently, Indian equity markets got a boost when the government decided to invest ? 5,000 crore of Employees Provident Fund money there. The government and Sebi believe the equities market needs a bigger push. Getting foreign pension funds here is one measure they wish to act on. Such funds typically invest for the long term and are considered astable source of capital. Unlike hedge funds or other investors which quickly move in and out of the markets for a profit. Also, pension and sovereign wealth funds accou

With the safeguard duty in place, the focus for steel companies will be to improve capacity utilisation rather than raising prices. At best, the prices could increase by Rs.1,000 a tonne over the next 200 days, that is, till the time the duty is applicable. There has been no price increase ever since the safeguard duty was imposed and very little price increase will happen. In absolute terms, it can go up to a maximum of Rs.1,000 a tonne over the next 200 days. There is already too much capacity and demand is not that strong; JSW Steel group chairman and managing director Sajjan Jindal said. JSW Steel happens to be the largest steel maker in the private sector in India. The industry, however, is treading cautiously on price, for more reasons than one. First, China has already dropped prices by 10 per cent. Landed imports of hot rolled coils are now at $ 297 a tonne compared to an ex- plant price of $ 400 a tonne for the home steel. They are now threatening to reduce prices by anoth