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Place of effective management guidelines to affect pharma, energy, and manufacturing In an attempt to tighten loopholes to deter tax evasion by Indian multinational companies, the government is set to come out with guidelines on place of effective management ( POEM) in the coming few days. This will consider companies with effective control in India a resident liable to pay tax in the country. The norms will affect companies in sectors like pharma, energy, manufacturing, software. Meanwhile, companies have started restructuring operations to ensure that key decision- making is done outside the country and decisionmakers are out of the country at the time of decision- making to ensure compliance with POEM. “The POEM guidelines are almost ready. They should be out in the coming few days. We are aware of industry concerns. All new things have some complications, but the guidelines will offer sufficient clarity to companies regarding compliance. We have incorporated suggestions f

To widen mandatory quoting of PAN, scope for annual information returns After cracking down on unaccounted money stashed abroad by Indians, the government is now working to curb domestic flow of black money, by plugging gaps in regulations. At present, the Central Board of Direct Taxes ( CBDT) is looking to rationalise income- tax rules; the move includes widening of coverage for mandatory quoting of permanent account number ( PAN) for specified transactions. Also, it is considering expanding the scope of mandatory annual information returns ( AIRs) for third- party agencies, to capture greater information, in line with the government’s efforts to build a large database for checking tax evasion and the flow of black money in the economy. “To curtail the flow of domestic black money in the economy, we are working to strengthen capture of information by rationalising two rules under the income- tax act — mandatory issuance of PAN card and the mandatory annual information returns

Work in Progress Revamp of social security laws on the cards to help improve ease of doing business, build support for labour reforms Private sector workers need not stay on in their jobs for fear of losing gratuity benefits and working women can look forward to six months of maternity leave soon as part of the government's plan to consolidate all employee benefits. The government is looking at a complete overhaul of social security laws to substantially enhance benefits to the country's more than 400 million workers besides improving the ease of doing business in India, measures it sees as building support for other labour reforms in the works, said a senior official. The labour ministry is finalising the social security code that would amalgamate half a dozen laws to simplify social security regulations besides allowing working women to avail longer maternity leave and make gratuity portable. The key laws that will be subsumed under such a social security code inclu

Even as the government gets ready for Parliament’s winter session, which begins on Thursday, whether or not the constitution amendment Bill for implementation of the goods and services tax ( GST) will be debated and passed in the Rajya Sabha during this session remains uncertain. A meeting of the ruling National Democratic Alliance (NDA) will be held on Tuesday to make sure the Treasury benches are on the same page. Strategy meetings will also be held for floor coordination and the sequence in which Bills will be brought in the two houses, besides an all- party meeting before the session. Among the Bills that are pending in the Rajya Sabha are the Child Labour ( Prohibition and Regulation) Amendment Bill, 2012; the Real Estate (Regulation and Development) Bill, 2013 ( as reported by a select committee of the Rajya Sabha); the Prevention of Corruption ( Amendment) Bill, 2013, the Anti- Hijacking Bill, 2014; the GST Bill ( the Constitution Amendment Bill, 2014) as passed by the Lok S

Work in Progress Revamp of social security laws on the cards to help improve ease of doing business, build support for labour reforms Private sector workers need not stay on in their jobs for fear of losing gratuity benefits and working women can look forward to six months of maternity leave soon as part of the government's plan to consolidate all employee benefits. The government is looking at a complete overhaul of social security laws to substantially enhance benefits to the country's more than 400 million workers besides improving the ease of doing business in India, measures it sees as building support for other labour reforms in the works, said a senior official. The labour ministry is finalising the social security code that would amalgamate half a dozen laws to simplify social security regulations besides allowing working women to avail longer maternity leave and make gratuity portable. The key laws that will be subsumed under such a social security code inclu

Two of the government’s high-profile schemes launched with the aim to reduce demand for physical gold and rein in the current account deficit have so far yielded modest results, signaling lack of clarity and volatile prices of the yellow metal. According to traders and experts, while the schemes fare better than existing options for gold, wider involvement of jewelers and a clear communication on the tax structure could improve response as days go by. T he Gold Monetisation Scheme (GMS) launched by Prime Minister Narendra Modi two weeks ago, to monetise part of the estimated 20,000 tonnes of gold lying idle with households, has been able to bring in only around 400 grams of gold. The gold bond scheme, the first tranche of which closed on Friday, has raised about Rs.150 crore, according to people familiar with the development. Through sovereign gold bonds, an investor gets an annual interest of 2.75%, apart from the benefits of the market price of gold on maturity. “Currently

Chairman to be selected at next meet The proposed national goods and services tax ( GST) continues to face obstacles, as seen on Friday, barely a week before Parliament is to begin its winter session where the constitutional amendment to enable it is to come up. At a meeting of the empowered committee of state finance ministers ( EC) on the tax, there were clear divisions on the threshold above which a GST should apply. A committee chaired by the governments chief economic advisor, Arvind Subramanian, is to soon give its recommendation on the GST rate. The finance ministry has said a high rate would be counter- productive. At the EC meeting, many felt the rate could be fixed at 18 per cent. Some such as Punjab, Chhattisgarh and Delhi were agreeable to the Union government proposal for the threshold at Rs.25 lakh annual turnover of a company; others wanted Rs.10 lakh. " There was divided opinion," Delhis deputy chief minister and finance minister, Manish Sisodia, told