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Exemptions, and the fact that farm income is outside the tax net, ensure that India´s tax GDP ratio stays low The view that Indians don´t pay their fair share of taxes resonates widely in public discourse.So much so that even Finance Minister Arun Jaitley presented figures in his recent Budget to buttress the claim of India being a tax non compliant society. But how accurate is this widely held view? Is tax compliance, especially on the personal income tax side, as poor as is being made out to be? The data points in both directions. Economists point to the Economic Survey (201516) which showed that the average tax GDP ratio for emerging economies is 21.4 per cent, while that for India is way lower at 16.6 per cent. The difference is largely on the direct tax side where India´s tax GDP ratio is at 5.6 per cent compared to the emerging market average of 7.4 per cent.On the indirect tax side, India´s tax GDP ratio of 10.1 per cent is only marginally lower than the emerging market average

At an Indian multinational (MNC) that owns a foreign subsidiary through a company registered in Singapore, this is an unsettling time. Senior executives are preparing to visit the island country to attend a board meeting that's been organised outside India for the first time. In Bengaluru, senior executives at a prominent startup huddle together every week to discuss a potentially disruptive matter. In both the cases, the companies are staring at a likely tax liability in the coming year on account of a new regulation -Place of Effecti ve Management or PoEM. This is a framework to determine the tax payable by a foreign company that for all purposes is managed from India and yet does not pay tax domestically.  Many Indian companies that have traditionally used holding companies and subsidiaries overseas for various reasons are assessing how they may be affected and are racing to put new structures in place before they come under scrutiny from next year. “For instance, multinational

Want them to be capital-ready, spot early signals of stress in loan books Amid mounting bad loans and dip in profits, financial services regulators of several countries where Indian banks operate have sought assurance from bank managements about the readiness of parents, shareholders to chip in capital when required. Meeting senior officials of local banks and the Reserve Bank of India, officials of these financial market authorities emphasised the need to spot early signals of stress in loans books and make necessary provisions before it's late. More than a dozen Indian banks run branches abroad. “Regulatory bodies from UK, Hong Kong, China, UAE and other countries held separate meetings with large and midsize banks this week to figure out how they are placed to remain well-capitalised and treat the special mention assets,“ a senior banker told ET. The exercise is part of the meeting hosted by RBI under the system of `regulatory college'.Each bank is required to make pre

Digital payments can check black money and playakey role in fighting graft, Prime Minister Narendra Modi said on Sunday as he asked the youth to become an “anticorruption cadre” as part of the “cleanliness” drive. Addressing his monthly Mann ki Baat radio programme, he said people, especially the youth, should become ambassadors of digital payments schemes rolled out by the government. “Lead this movement. Take it further as it hasavery major and prominent role in the fight against corruption and black money. To me, each and every individual involved in this mission constitutesanew anticorruption cadre in the country. Inaway you areasoldier in the cause of cleanliness and purity,” the Prime Minister said. He said gradually people are“sheddingtheirhardcurrency mindset” and moving towards digital currency and the youth are leading the way using their mobile phones as the new tool to make and receive payments. In the past two months, one million people have been rewarded, over 50,00

Legal and tax experts share some concernds about the revised model GST lAW Anti profiteering clause:The intention of the antiprofiteering clause is to pass on the benefits accuring on the benefits account to However, both industry divided. model GST central an authority the benefits while transitioning such as rate reduction passed penalty been passed Experts parameters service. operational will have says Smita Sujit Advaita provision Experts complain that there is ambiguity around what constitutes “commensurate reduction in the price”. There is also lack of clarity on whether the provisions will be applied on application from the affected parties or through suo motu investigation by the relevant authority. “The government needs to be careful while framing the rules to bring objectivity in deciding whether the benefit has been passed on to the customers or not,” says Bipin Sapra, tax partner, EY India. Advaita´s Ghosh feels the antiprofiteering provisions are susceptible toacon

The Reserve Bank of India (RBI) is expected to formulate standard operating procedures (SOP) for approval of foreign direct investment (FDI) proposals by ministries. The proposal for setting up norms for FDI approvals in sensitive sectors, which are currently under government approval of the FDI policy, was discussed atarecent interministerial meeting. According to sources, several options came up for discussions at the meeting. In order to further improve ease of doing business, the government has decided to abolish the Foreign Investment Promotion Board (FIPB) and formanew mechanism for expeditious clearance of foreign investment proposals. Business Standard New Delhi,27th February 2017

India’s domestic economy has been on the recovery curve, with the real estate and construction sector taking a leading position. Recent steps taken by the government —from the demonetisation drive and the Real Estate Regulatory Act (RERA) to the Goods and Services Tax (GST) and Real Estate Investment Trusts (REITs) — are all working towards bringing in transparency and increased investor confidence in the real estate market. India is fast emerging as an attractive investment market with positive macro-economic sentiment - government initiatives to spur investments and a developing real estate market, are all integrating to make India a positive market for attracting investors. Underlining India’s position as a robust commercial real estate market is its appeal as an established outsourcing hub, which is expected to fuel expansion initiatives by corporate real estate occupiers from around the globe. The overall sentiment among corporate occupiers remains optimistic in recent times a