CA Online

Former finance secretary Vijay Kelkar on Friday advocated a single rate for the Goods and Services Tax (GST) as that would it simpler to administer. The GST Council has already decided on the fourrate structure for the indirect tax regime, besides a cess. Giving an example, he said it was better to first build a single-rate GST with a low rate, achieve full mastery of this, and then consider more complex possibilities such as high rates and multiple rates. Delivering the C D Deshmukh lecture, organised by the National Council of Applied Economic Research, Kelkar said policymaking was required to address market failure, improve efficiency and equity in the society. With regard to taxation, he said it should be stable and simple, giving investors confidence to invest. A task force constituted by the 13th Finance Commission, headed by Kelkar, had recommended that all goods and services should be taxed at the single GST rate of 12 per cent. It could be split as 5 per cent for

Wiser after the criticism faced in trying to amend the land acquisition law in 2015, the Narendra Modi government has revised its earlier plan for a parliamentary nod to its model land leasing Bill. Instead, the Centre is persuading state governments to enact it. And, has support from even Opposition party-governed states, such as Congressruled Karnataka and Left-ruled Kerala. The Bill in question aims at enabling farmers and farming groups to lease their land for cultivation through a legal document, without dilution of ownership. NITI Aayog, which drafted it, says the legislation could help release for cultivation 20 million hectares of fallow tract, where its owners fear land grab. The model Bill also aims to protect the rights of tenants in the event of a natural calamity, giving them access to compensation. Land is not only a state subject but also an emotive issue. Which was underlined for the Centre, at significant political cost, when it tried to amend the land acquisitio

Central Board of Excise and Customs (CBEC) Chairman Najib Shah on Friday raised concerns over the proposed goods and services tax (GST) on behalf of excise and service tax officials on the same dais where Finance Minister Arun Jaitley was present.  There is lingering fear among tax officials that their work will be reduced because of the division of the administrative turf proposed in the GST regime. The occasion was Customs day, but officials were not pleased with the way the Centre bowed down to states over the division of administrative control between the Union and state governments. The IRS Association earlier this week had decided to not to celebrate Customs Day at any place and wear black badges on January 30, Martyrs' day. Shah drew Jaitley's attention to “the rising disquiet in the cadre”, saying there were human resource issues in the service. Jaitley tried to pacify Shah, saying any such disquiet would come down as GST will create ample opportunities. “

The implementation of Goods and Services Tax(GST) should driven early seven million small businesses to the formal digital economy and help them get easy access to loans,said Nandan Nilekani,the technology entrepreneur and co-founder of Infosys who wastapped by the government to runan ambitious identity-recognition programme, on Friday. The new unified taxation system,which is scheduled to be implemented latert his year, will bring in millions of unorganised businesses on one platform.This would effectively ,Nilekani believes,help the mget loan susing digitalised data. Business Standard New Delhi,28th January 2017

New rules take effect from April 1 ;tax treaties won’t be overridden The finance ministry sent positive signals to foreign portfolio investors(FPIs)on Friday by clarifying that the general anti avoidance rules(GAAR,on taxes) will not over ride tax treaties with suitable limitation of benefit (LoB)clauses,but which had certain grey areas toi nterpret. Experts said it would have been better if these clarifications could have come earlier,as it takes time to windup some commercial arrangements.However, this is still better than the rules on place of effective management,which have been enforced from the current financial year. The GAAR takes effect from April 1,when the next year begins. Investments made through compulsory convertible instruments,among others,would not draw GAAR,if made prior to April 1.Some other safe guards have also been put to avoid arbitrariness. “...if a case of avoidance is sufficiently addressed by LoB provisions in the tax treaty,there shall not be an occasion t

The central government is likely to keep the gross borrowing number on the higher side,considering the heavy redemption pressure in the next financial year. However,net borrowing couldbeatparwith thatinthisfinancialyear,say economists and bond dealers. In 2017-18,aboutRs.2.28 lakh crore of bonds are set to mature.The government borrowing programme will have to account for it.To avoid paying theentire amountat on ego,the government enters into arrangements with the Reserve Bank of India(RBI)or large institutions like insurance companiestoswapsomeofthe maturingbondswithdated papers,maturinginfiveto10 years.Thisiscalleda‘switch’. Theswitchdoesn’tdisturb themarket,asthegovernment buysthesefromthesecondary market and swaps it with longertenurebonds issuedtotheseinstitutions.Thistime,bond dealersexpectthegovernmenttoswitchat least~30,000-40,000 crore,tokeepredemption pressurelow. The gross borrowing number for the current financial year turned out tobe Rs.5.82lakh crore,afterthegovernm

Domestic hotel and tour aggregatorssuchasOYO Rooms, EaseMyTrip and MakeMyTripwereexpectingtax reliefintheBudgettobepresented on February 1. But the mood has turned sombre, with the finance ministry deciding to imposeservicetaxonwhatthey receivefromcustomersandnotjust thecommissionearnedfromhotels andothers. Inaquietmove,the Central Board of Excise and Customs has amended the service taxrules to clarify this because there was ambiguity on the point.The changed rules came into effect on January 22. The aggregators said their associations had taken up the matter with the ministry because this step would make the muncompetitive vis-à-vis international tour and travelplayerssuchasTravelocity, ExpediaandPriceline.com,which donotpayservicetaxinIndia. The rates of service tax depend on whether aggregat or soffer tour packages,hotelrooms,hotelrooms withfood,etc. The current practice is that most customers pay the entire amount to aggregators because the latter give discounts invarious