CA Online

The government has formed a task force on enforcing business contracts as part of its efforts to improve India’s ease of doing business rankings. India ranked 130 of 190 countries in the World Bank’s 2017 rankings. Under the head of enforcing contracts, India stood at 172, up six points from 2016. Improving this rank is a priority for the government, which has taken steps to enable this. The government on 19 December finalized eight reforms (bit.ly/2h88aWK )to make it easier to do business. Improving its rank under ‘enforcing contracts’ was one, with commerce minister Nirmala Sitharaman asking for e-courts to be expedited for electronic filing of complaints, summons and payments, especially in commercial courts. The nine-member task force, headed by secretary of the department of justice (DoJ) Snehlata Shrivastava, has a 12-point reform agenda to address concerns on enforcing contracts, as per a 23 December notice on the DoJ website. The World Bank’s rankings on contract en

Putting in place the disclosure norms for real estate investment trusts (REITs), Sebi on Monday said the offer document will contain financial information, related-party transactions and past performances. The move came after Sebi, earlier this month, issued detailed norms for public issuance of REITs, including allocation of units to institutional investors. To facilitate the growth of REITs, Sebi last month notified revised and easier regulations for raising capital through this instrument. Sebi had notified the REIT regulations in 2014, allowing setting up and listing such trusts, which are very popular in some advanced markets. However, not a single trust has been set up in India as of now as investors await further measures, including tax breaks, to make these instruments more attractive. In a circular issued on Monday, Sebi said the offer document would contain financial information of last three financial years. These include balance sheet, statements of profit and loss, i

Finance Minister Arun Jaitley today said a lower level of taxation that is globally compatible is necessary if the country has to have a broader base of economy. He said gone are the days of the philosophy that high taxation will bring greater revenues and that since 1991 the course of economy has altered itself. "... What you need is a broader base of economy for which you need a lower level of taxation. You need to manufacture products and provide services which are more competitive in character and therefore your taxes have to be globally compatible," Jaitley said while inaugurating the professional training of IRS officers. He said competition is not merely domestic but global and therefore in the last two-and-a-half decades, governments have been guided by these principles. Tracing the behaviour of people in the last 70 years, the Finance Minister said there has been an impression if avoidance could be done of government revenue, there is nothing "improper

Higher levy on dividend searned by individualsal so on govt’sradar The government is mulling a hike in the short-term capital gains (STCG)tax rate,and also a higher levy on dividends earned by individuals. At present,the STCG (profits on sale of shares held for less than 12 months)tax rateis15 percent;the government is planning to increase it to 20 percent, according to sources in the know.The Centre has already started gathering feedback from key market participants. Also, although the Finance Minister Arun Jaitley ruled out changes to the long-term capital gains(LTCG)—currently tax free—the government is toying with the idea of increasing the time frame for availing such benefits from 12 to 36 months. The government is taking securities market regulator Securities and ExchangeBoardof India’s(Sebi’s)and stock exchanges’ views on the proposals to change the tax structure in the capital markets.Announcement regarding this could be a part of the Union Budget on February1, 2017.

Extensively using carve-outs, which is creating subsidiaries and then going in for IPOs, and exemptions have been hobbling the IFRS-compliant new Indian Accounting Standards (Ind-AS), which kicked in from April 1, 2016. It helped that Sebi, the stock market regulator, allowed reporting standalone financial results instead of consolidated results. Around 1,000-odd companies with net worth of Rs 500 crore or above were covered in the first phase of Ind-AS implementation. Comprising 40 accounting standards, this entailed changes in the financial reporting framework. Revenue recognition, taxes and financial instruments were seen as the key impact areas to watch out for. “The full impact of Ind-AS on financial performance, as well as on the financial position of corporate India, will be visible only when one gets the consolidated accounts for the full year with all the relevant disclosures,” said Sai Venkateshwaran, partner and head, accounting advisory services, KPMG. Tax experts p

The next step in the war against corruption would be a crackdown on benami property, Prime Minister Narendra Modi said Sunday, as he again thanked people for enduring the “pain” caused by the scrapping of high-value currency. Modi, who has come in for criticism for scrapping Rs.500 and Rs.1,000 notes that triggered a cash crunch, said if curbing corruption required “even tougher steps, those would be taken”. “You are possibly aware of a law about benami property in our country which came into being in 1988, but neither were its rules ever framed, nor was it notified. It just lay dormant,” Modi said during the year’s last edition of Mann ki Baat, his monthly radio programme. “We have retrieved it and turned it into an incisive law against benami property. In the coming days, this law will also become operational,” he said. One of the biggest criticisms of demonetisation is that cash accounts for only 6% of the black money, the bulk of which is parked in real estate, bullion or is st

The proposed changes could do away with the long-drawn process of settling disputes, even after years of litigation. Among the suggestions being considered is to give a window — possibly 30 days — for settling disputes between complainants and people whose cheques bounced. If the two parties fail to come to an understanding within that time, the defaulter could be put in jail without bail at the court’s discretion. “These are among several options on the table. We will finalise the specifics shortly. To promote cashless transactions, we will not shy away from incorporating stringent provisions,” said a source involved in deliberations over amendments to the negotiable instruments act, which governs cases relating to bounced cheques. Cheque bounce is a bailable offence under the current law, which enables defaulters to stay away from jail as long as the trial is on. The law stipulates imprisonment up to two years or fine that may extend up to double the dishonoured amount, or