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Bank unions ask Jaitley to withdraw FRDI Bill Bank unions have requested Finance Minister Arun Jaitley to withdraw the FRDI Bill as it proposes to empower authorities with sweeping powers to wind up public sector banks and insurance companies. Already, there are many rules and legislation in place under the existing Acts that deal with winding up of financial institutions, United Forum of Bank Unions (UFBU) said in its representation to the finance minister. The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, was tabled in the Lok Sabha last month. It was referred to the 30-member committee comprising members of both the Lok Sabha and the Rajya Sabha. “The objective of this Bill is obviously to heavily empower the new authority with sweeping powers to dismantle and erase public sector financial institutions like banks and insurance companies and hence, it is apparently draconian. “We demand the withdrawal of this Bill,” it said. UFBU is an umbrella organisation of all

Exporters may seek exemption on tax payment Exporters plan to seek outright exemption on payment of goods and services tax, citing a crunch in working capital due to the uncertainty in the time taken to get refunds for unutilised input tax credit. Exporters, heads of export promotion councils and senior officials from the commerce ministry plan to submit a petition seeking the exemption when they meet the revenue secretary on Tuesday. “There is an apprehension that exports will decline, going ahead,” said an an official aware of the meeting. Exporters are likely to raise the issues of working capital and refunds which will be ploughed back into their business and the loss of interest. “Merchant exporters and those in the small and medium enterprises are up in arms,” the official said. Micro, small and medium enterprises now have to pay GST when buying from merchant exporters. The government has a two refund mechanisms for exporters. They can furnish a bond instead of paying integra

Transitioning tax credits under GST Clarity is required for assessees to take necessary steps — in terms of readying supporting documentation where credits can be transitioned, and also negotiating with counterparties on who will bear sunk costs where credits can’t be transitioned With the goods and services tax (GST) looming, one of the biggest challenges that businesses are grappling with is the transition of existing tax credits. Such credits, once transitioned, can be used to pay GST on outward supplies. Credits that cannot be transitioned become a sunk cost for businesses, given that outward supplies will attract GST at the prescribed rates, but at the same time, a corresponding credit will not be available for offset. The GST law contemplates two broad scenarios in which credits can be carried forward. The first is a currently registered assessee under the central/state laws, who can transition 100 per cent of the credit shown in his returns. The second is a currently unregis

FDI likely to rise further after GST: Moody’s India is likely see increased foreign direct investment (FDI) inflows on the back of reforms such as introduction of the goods and services tax and the bankruptcy code, international ratings agency Moody’s said in a report on Monday. “Combined with reforms such as the introduction of a goods and services tax, which lowers the cost and complexity of doing business, and a simplified and clarified bankruptcy code, FDI is likely to rise further,” the agency said in its report on how structural reforms by Asia Pacific sovereigns could become more effective from stronger global demand. In India, Moody’s said, the government has raised ceilings for authorised FDI in a number of sectors. “FDI has already increased substantially, albeit from a low base,” the report said. FDI in India grew by 18% during 2016 to touch Rs 46 billion, data released by the Department of Industrial Policy and Promotion showed. The Narendra Modi government has liberali

I-T Dept Goes after Defunct Cos for Tax Frauds UNDER LENS Sends notices to reopen assessment against cos in marketing, realty space that no longer exist on suspicion of frauds or fund diversion The tax office is reopening old records of many companies that have wound up and no longer exist in the books of the government -something the revenue department has rarely done in the past. Former directors of such closely-held private companies, which have received tax notices along with the official liquidators, fear they could be suddenly saddled with unforeseen liabilities. While opening new private companies and shutting down old ones have often been a ploy to move unaccounted money, some of the companies set up to carry out bona fide businesses which subsequently failed have also come under the glare of the income tax department. Till now, the department has ty pically stayed away from companies to which it had issued nonobjection certificate prior to the winding process. But, it

Recent low inflation means you pay more capital gains tax Prices rising at a slower rate should be good news. But not if you have earned long-term capital gains. The consistent decline in inflation in the past 3-4 years means that long-term capital gains can no longer escape tax through indexation. Indexation takes into account the inflation during the holding period and accordingly adjusts the purchase price of certain assets. This upward revision in purchase price reduces the capital gains and brings down the tax liability. Between 2008 and 2012, consumer inflation was raging in double digits, which meant that debt fund investors were earning tax-free gains. In fact, the inflation was so high that they could book notional losses and adjust them against other taxable long-term capital gains. Someone who invested Rs 1 lakh in a debt fund on 1 April 2011 would have earned Rs 28,400 over the next three years. However, with the cost inflation index (CII) shooting up 9.3% during the sa

Jurisdiction-free I-T assessment of taxpayers on the anvil CBDT has constituted a special team of officers to prepare modalities to abolish the old system The Income Tax Department is working on a new system of jurisdiction-free assessment, where a taxpayer would be assessed by a taxman based in any part of the country as part of measures to reduce instances of corruption and harassment. Officials said the Central Board of Direct Taxes (CBDT), that frames policy for the tax department, has constituted a special team of officers to prepare modalities for this path- breaking initiative and abolish the age-old prevalent system of a taxpayer being assessed in a specific circle of the city or town where he or she is based. "This first-of-its-kind initiative will totally change the relationship and dealing between an assessee and his Assessing Officer (AO). The income tax returns, scrutiny cases and all other I-T related correspondence of a taxpayer will go to a officer chosen rando