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Updates Of the Day 1.The Reserve Bank of India (RBI) has cancelled the registration of 56 non- banking financial companies (NBFCs). 2.CEA led Panel recommends RNR at 17-18% and eliminating Additional Tax of 1% on inter-state supply of goods. 3.Free warranty services provided by vehicle-dealers to vehicle-buyers out of their dealer’s margin/ handling charges is not liable to Service tax:[Chowgule Industries (P.) Ltd] . 4.No VAT on free supply of medicines – State Govt. not competent to levy tax on the basis of MRP or any other notional value. [Mapra Laboratories Pvt. Ltd]. 5.Where seller has not reduced his Output Tax liability in pursuance to the Credit Notes the purchaser is not required to reverse Input Tax Credit. [Appellate Tribunal, VAT : of M/s Khanna Photo Store]. 6.CBDT allows service of notice, summons, requisition, order etc. by Email. Notification No. 89/2015. 7.CBDT issued notification to Issue refund below Rs.50,000/- Expeditiously in Non-CASS cases : Notification

The Central Board of Direct Taxes ( CBDT) has notified use of emails as the new mode of communication between the taxman and taxpayers, as part of the governments e- initiative to reduce human interface and complaints of harassment and corruption in conducting tax related jobs. The amendment in the Income Tax Act was also required as the department has recently launched a pilot project of sending email queries, notices and summons to taxpayers while processing cases of scrutiny. According to the notification 89 issued by the CBDT, the apex policy- making body of the tax department, an amendment has been made in the Section 282 of the I- T Act ( Service of notice) allowing for inclusion of taxpayers or tax paying entities email as the new mode of official communication along with the existing modes like courier, postage or departmental dispatch. Henceforth, the taxman can now send official communication to “ email address available in the income- tax return details furnished by th

The finance ministry wants Employees Provident Fund Organisation ( EPFO) to retain 8.75 per cent rate of interest on provident fund (PF) deposits for 2015- 16 although the retirement fund body is in a position to give better returns to its over 50 million subscribers. The EPFO has provided 8.75 per cent rate of interest on PF deposits for previous two financial years — 2013- 14 and 2014- 15. “During a recent meeting of finance ministry and labour ministry top officials, of the former urged the latter that the EPFO should retain its 8.75 per cent interest on deposits for the current fiscal as well in view of the governments intention to reduce rate of returns on small saving schemes and PPF," a source said. The source further said, “EPFO has already worked out the income projection for the current fiscal, on the basis of which it can provide higher rate of returns than 8.75 per cent provided in the previous two financial years.” Business Standard, New Delhi, 7th Dec. 2015

RBI to allow computation of banks ’base rates on the basis of marginal cost of funds In a move aimed at ensuring faster transmission of rate revisions, the Reserve Bank of India ( RBI) is set to release its final guidelines on computation of banks’ base rates on the basis of marginal cost of funds. These guidelines, allowing dynamic pricing of loans as suggested by banks, are likely to benefit new customers. One suggestion made by the bankers’ lobby — there are indications that RBI has taken it seriously — is that pricing of loans should be changed on the basis of market- linked yields, with a clause for reset every quarter or year. While it is not yet clear whether the yields taken into consideration will be on adaily basis or an average, dynamic pricing of loans will be tricky business for borrowers, who will also have to time their borrowings according to money markets and the view on interest rates. That is because the rate could be reset only after a quarter or a year of a l

Rush to experts to insulate the image they have created over years from such shocks For many brands, the backlash over actor Aamir Khan's intolerance comments has offered a lesson on the perils from social media. Several of these companies are rushing to experts on social media and online reputation management to rework their strategies and insulate the image they have created over years from such shocks. The Khan controversy generated more than six lakh tweets on the actor over the past week, according to data compiled by social media analytics firm Blueocean Market Intelligence. Snapdeal, the ecommerce company Khan endorses, was the hardest hit, with many of those tweets and comments on other social media platforms calling to boycott the brand for its association with the actor. “We are getting queries from some of the brands that the actor is associated with. They reached out to us to understand how they can rework their strategies on social media,“ said Anees Merchant,

But won't cap rate for GST in Constitution; Cong too ready to cede some ground India may have moved closer to the much-awaited goods & services tax (GST) with the government and Opposition finding some common ground on crucial elements of the proposed levy . This follows PM Narendra Modi and the ruling Bharatiya Janata Party reaching out to Congress in the search for a compromise to break the stalemate on GST. The government is likely to concede the Congress demand to do away with the 1% tax on interstate sales, which was proposed to compensate manufacturing states such as Maharashtra, Gujarat and Tamil Nadu that fear loss of revenue in the new indirect tax regime. Government sources, however, indicated that capping the GST rate in the Constitution -as demanded by Congress -is not acceptable. Though the Centre is not willing to cap the GST rate in the Constitution, government sources said alternatives such as including it in the law related to this could be looked at. Chi

High import of unrefined gold because of a nomaly in import duty Faced with unprecedented rise in import of unrefined ( dore) gold, gem and jewellery players have urged the government to rationalise tax benefits to domestic refineries. These refineries enjoy tax benefits of two per cent, which in bullion trade parlance is very big, as the jewellery industry is operating with wafer- thin margins. Domestic refineries enjoy net one per cent lower duty incidence benefit after Cenvat and refiners in excise free zones like Uttarakhand enjoy net two per cent benefit. Hence they are better placed to sell gold at a competitive price. They sell gold at a little discount and hence jewellers buying from them are better placed compared to those who are dependent on imports. “Hence, the government should rationalise the benefits granted to gold refineries. While there is a need to give lot of impetus to domestic refineries, but, at the same time, other players in the industry should not suffer