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Rupee- denominated offshore bonds or ‘ masala bonds’ by domestic issuers might not hit the market this financial year, as these await clarity on the withholding tax structure. A different withholding tax structure for these would require amendments in the income tax law or an enabling provision. Union finance ministry sources indicate such changes are only likely in next years Budget. “A withholding tax of five · per cent as desired would require enabling provisions in the Act. Such changes are unlikely to come up before the next Budget,” said a source. In the Reserve Bank of India (RBI)’ s first bi- monthly monetary policy review for financial year 201516, held in April, it had stated an intention to expand the scope of issuance of these bonds by international financial institutions. As also to permit Indian companies eligible for external commercial borrowing (ECB) to issue such bonds with an appropriate regulatory framework. Last month, RBI had come up with draft norms, ac

RS committee moots 1% extra tax only on inter-state supply for a consideration suggests states be given full compensation for revenue loss for 5 years Parliamentarians are understood to have recommended amechanism to do away with the contentious issue of a cascading effect of one per cent tax over the proposed national goods and services tax ( GST). A select panel of the Rajya Sabha is believed to have suggested the tax be made liable only in the case of inter- state supply of goods for a consideration, adding this be made explicit at the time of making the GST law. It also accepted a demand by most states that the Constitution amendment Bill on GST provide that they be fully compensated for revenue loss for five years. The committee, sources said, was also understood to have recommended moderate GST rates, with as many goods under it as possible. However, the rates would be decided by the proposed GST council and these wouldn’t be part of the Constitution amendment Bill. Des

1.  Admission of assessee u/s 132(4) of the Income Tax Act would suffice to initiate necessary proceedings. [Delhi High court in the case of JRD Stock Brokers (P) Ltd. vs. CIT]. 2.  While classifying a product for excise purpose primary use prevails over the incidental ones in classification of goods. [Holostick India Ltd. vs. CCE- Supreme Court]. 3.  Act of non-payment of service tax after its collection cannot be claimed to be done under a bona fide belief. [Indsur Global Ltd. vs Additional Commissioner of service tax, Vadodara (2015) 59  taxmann.com  15 (Gujarat) tribunal]. 4.  RBI has issued circular on "Issue of shares under Employees Stock Options Scheme and/or sweat equity shares to person’s resident outside India. 5.  Entertainment tax in Delhi increased from 20% to 40% w.e.f. 20/07/2015.

The right to skill will task states with setting up universities to be overseen by a regulatory body, says rajiv pratap rudy The government is planning to make skill training a fundamental right guaranteed by the Constitution to boost employability of India’s workforce. The proposed right to skill will task state governments with the responsibility of imparting vocational training through special universities that will be overseen by a regulatory body at the Centre. Skill development as a right has been enacted in several countries, including Germany, Switzerland and South Korea, and is present closer home in Chhattisgarh as well. Explaining the proposal, minister of state for skill development and entrepreneurship Rajiv Pratap Rudy said, “The proposal is at the discussion stage at this point. It will be the responsibility of the state to see that anyone who wants to be skilled is not left out. The idea is to include it under the fundamental rights.” “Anyone in the age group

The proposal to provide income tax relief for usage of debit and credit cards has run into opposition -- within the government. According to sources, the revenue department has flagged a host of concerns, and expressed reservations on the draft proposal of the department of economic affairs (DEA) to promote electronic payments. The two departments are likely to engage in a series of detailed discussions to sort out these issues. Tax benefits, lower transaction fees for electronic payments and a nominal charge on high-value cash transactions are among likely steps that the government plans to implement to become a cashless economy. The government had on June 22 released draft proposals to encourage electronic transactions in a bid to curb generation and circulation of black money. The draft proposes a mix of steps to increase debit and credit card usage, mobile payments and other forms of electronic transactions. “The goal of the proposed policy is to provide necessary incentive

Audit and accounting firms favour multi- disciplinary partnership, the legal fraternity stays out The global turf war between accountants and lawyers was played out in India last month, when the Society of Indian Law Firms (SILF), an association of about 100 law firms, filed a complaint with the regulator, Bar Council of India, saying that four multinational audit and accounting firms — EY, KPMG, Deloitte and PwC — were indulging in the practice of law in violation of the Advocates Act, 1961 provisions. The Bar Council sent notices to the firms, seeking their response. The move comes at a time when the three professional institutes that represent chartered accountants, cost accountants and company secretaries are working on broad contours of setting up multi- disciplinary partnerships. That would allow them to offer audit, cost accounting and consultancy services under one roof. However, the legal fraternity in India has taken an aggressive stand against the multi- disciplinary

Will amend 1986 law to bring provisions in line with global standards; DMs to get implementation powers, rehabilitation fund coming The government will push a Bill amending the law on child labour in the coming session of Parliament. It was introduced in the Rajya Sabha in December 2012 and then sent to a standing committee for scrutiny. The final shape was cleared by the Cabinet in May. It proposes a full ban on employment of children below 14 years of age across all industries and processes. However, a child will be allowed to “ help” her family in their own businesses after school hours or during  vacations , and also work as a child artist. The ministry will continue its ban on children working in a circus. Various activists had criticised the government’s move to allow children to assist their families in work. However, the government has said it will not allow children to work in set- ups where an employer- employee relation is established. “It is important to note th