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Avoid generating higher tax revenue through indirect taxes that hit the poor the hardest As another session of Parliament looms, there is a pregnant pause over the delivery of the Goods & Services Taxes (GST) Bill. It seems tantalisingly close with no further complications barring just one — to fix a rate ceiling in the Constitution or not? Aspersions are cast and motives are questioned over this clamour for a constitutional tax cap. Inadvertently, French economist Thomas Piketty’s recent visit to India may have provided an intellectual basis to this debate on a tax cap. Piketty remarked that India needs a much higher tax-GDP ratio to fix its widening income and wealth inequality and that the current skewed tax structure is making inequality worse. Some sought to dismiss his arguments with the familiar ‘foreigner knows little about India’ disdain. Some others argued that improving efficacy of government spending and distribution are far more important than merely raising the ta

The income tax department clarified that all the upcoming reporting in May 2016 for the purpose of adhering to the US Foreign Account Tax Compliance Act (Fatca) will have to be done in rupees. For 2017, the forms would be suitably modified to include other currencies. The clarification came because in the first reporting in September 2015, some banks had reported in rupees and others in dollars, explained Bahroze Kamdin, partner, Deloitte Haskins & Sells LLP. This would supersede the earlier circular that the value of an account in question should be reported in the currency in which it is denominated. “So, this clarification could impact those financial institutions which have created their systems for reporting in dollars and will entail time and cost to make changes to the systems designed or being designed,” said Kamdin. The department also clarified that all fixed deposits and auto sweep facilities in pre-existing savings bank accounts will not have to be reported in

The Labour Ministry has sought Cabinet’s approval for the wage code Bill that seeks to empower the Centre to fix a minimum wage applicable across all sectors in the entire country. “We have already sent the wage code Bill for Cabinet approval. We will also send the Labour Code on Industrial Relations Bill in a week,” Labour Secretary Shankar Aggarwal said after a seminar on Labour Reforms. “We are trying to create a mechanism for minimum wage for all sectors in the country.” At present, the Centre and states fix minimum wages for different categories of workers in various sectors under their respective jurisdictions. Once it sees the light of day, the Wage Code will allow fixing a benchmark wage for workers, which will have to be adhered to by the states as well. This provision will ensure a minimum wage to workers across the country. However, the states will be free to prescribe higher wages.The Labour Ministry is likely to push the Code on Wages and Code on Industrial Relat

FM Also Likely To Revise Limits, Reduce Rates For TDS Finance minister Arun Jaitley is likely to introduce some incentives in the budget that can make the life of the common taxpayer easy . These may include benefits for housing, healthcare and education and some steps to encourage savings and investment. The finance minister is also expected to lay down a clear road map for implementing his earlier promise of lowering the corporate tax rate to 25%, while balancing this with the exercise of pruning exemptions and deductions for the corporate sector. Revising limits and reducing rates for tax deduction at source (TDS), rationalizing several TDS procedures and raising monetary limits for maintenance of books of accounts and tax audit also appear to be receiving the attention of the North Block officials engaged in drafting of the Finance Bill, 2016. The se were among the key recommendations of the Justice Easwar Committee appoin ted by Jaitley. “Judging by the trend of several

The global economic outlook seems uncertain. With oil prices tumbling, a slowdown in the Chinese economy and devaluation of yuan, a general question today is what might be the potential impact on India. With the current Indian demography and a stable government at the centre, India has the potential to capitalise on this opportunity. Budget 2016 needs to focus on simplifying tax regulations and provide for increasing the rural demand for goods and services, attracting foreign investment, facilitating Indian corporates in their expansion plan and lay the ground for an export conducive environment. To start with we can expect a reduction in the corporate tax base rate of 30%. Earlier, the government had proposed to phase out the profit-linked incentives from April 2017.Given the need to attract foreign investment and push corporates towards expansion, the government may want to reconsider and defer this phase-out plan. Further, with the reducing difference between the base corporate

www.caonline.in News 1.Levy of tax on open space termed as “banquet halls” providing only accommodation or space for marriages/receptions in terms of section 2(c) in the manner stated under section 2(k) of the Haryana Tax on Luxuries Act, 2007. The validity of the same is upheld and the petition is dismissed. - HC. [M/s Laxmi Sadan, Sector 19, Rewari vs State of Haryana and others - 2016 (2) TMI 550 - PUNJAB AND HARYANA HIGH COURT] 2.Denial of benefit of CENVAT Credit on xerox copy of courier bill of entry, appellant have correctly claimed the CENVAT Credit on the photocopy of the courier bill of entry filed by them and CENVAT Credit cannot be denied on mere technical grounds - Tri.[Arbes Tools Pvt. Ltd. vs Commissioner of Central Excise, Mumbai-II - 2016 (2) TMI 555 - CESTAT MUMBAI] 3.All the services provided by the Government or local authority to a business entity, except the services that are specifically exempted, or covered by any another entry in the Negative List, shall b

The Securities and Exchange Board of India ( Sebi) has restrained 22 entities, mostly brokers, from the securities market for allegedly making illicit gain through manipulation of liquid stocks options. Sebi found these entities putting through ‘ reversal trades’ in the stock options segment. The manipulation typically took in deep in- themoney and out- of- the- money options on individual stocks that were thinly traded. In fact, 70- 100 per cent of the volumes in these counters were by the alleged manipulators, it said. According to Sebi, entities through reversal trades generated atotal loss of Rs.1,273 crore and total profit of Rs.1,303 crore. “ These brokers have, prima facie, facilitated their clients to use and employ a pre- meditated manipulative device or contrivance while dealing in the market, a... nongenuine and deceptive transaction,” said Rajeev Kumar Agarwal, member of Sebi, in an order. Some of the entities barred are Giriraj Stock Broking, Best Bull Stock Tradin