CA Online

Government, SC in favour of ethics body for legal profession The Indian government and the Supreme Court are in favour of setting up an independent body to regulate ethics in the legal profession, the absence of which has prevented the country from improving its global position in the enforcement of business contracts.In an endeavour to usher in major reforms in the legal profession, the Centre and country’s highest court have also suggested the need to regulate professional fees. “Regulatory framework of the legal profession  needs a review. There is need to regulate professional fee and ethics which can be done by an independent body instead of elected body of the Bar,” according to the minutes of the meeting that ET exclusively accessed. The meeting was attended by the top brass of the Prime Minister’s Office and secretaries from the ministries of finance, revenue and law and Niti Aayog Demonstrating how the lack of a regulatory mechanism is adversely affecting the country’s

Banks to now match original IDs with photocopies The government has made it mandatory for banks and financial institutions to check the original identification documents of individuals dealing in cash above the prescribed threshold, to weed out the use of forged or fake copies.The department of revenue in the finance ministry has issued a notification making an amendment to the Prevention of Money-laundering (Maintenance of Records) Rules. The new rule requires the reporting entity to compare “the copy of officially valid (identification) document so produced by the client with the original and recording the same on the copy”.The Prevention of Money Laundering Act (PMLA) forms the core of the legal framework put in place by India to combat money laundering and generation of black money. PMLA and its rules impose obligation on reporting entities like banks, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to Financ

GST Valuation rules under GST could lead to transfer pricing disputes As companies focus on the country’s biggest indirect tax reform — Goods and Services Tax (GST) — an old ghost of transfer pricing (TP) may come to haunt them in the coming years, warn tax experts.Transfer price is basically a price charged by a subsidiary or a division of a company to another. The rules suggest that there has to be an ‘arm’s length’ while fixing this price so that it’s not too low or too high than the existing open market prices. Tax officers can question and demand tax in case they suspect that companies are escaping taxes. Unlike the earlier tax regime, GST has something called an open market pricing for related party transactions. Many tax experts feel that currently, the valuation rules under GST and those for calculating transfer pricing are not harmonised, and this could lead to future tax demands.Due to open market pricing for the related party transactions, goods and services, whether c

GST rate structure needs rejig: Adhia Some rejig in the rate structure of the goods and services tax (GST) is required to reduce the burden on small and medium businesses, Revenue Secretary Hasmukh Adhia has said.The GST, which amalgamates more than a dozen central and state levies like excise duty, service tax and value-added tax (VAT), will take about a  year to stabilise, he told PTI.“There is need for some rejig in rates. it is possible that some items in the same chapter are divided.There is a need for harmonisation of items chapter wise and wherever we find there is a big burden on small and medium businesses and on common man, if we bring them down, there will bea better compliance,” Adhia said.Nearly four months since its introduction, the new indirect tax threw up teething troubles and compliance issues, which the GST Council —the highest decision making body of the new regime —has addressed through several rounds of changes. To ease hassles facing medium and small bus

Modi gives exit route to small traders from ITlens Prime Minister Narendra Modi on Sunday asserted the process of taking “important decisions” regarding the economic reforms will continue.The assertion came at a time when the opposition parties have been attacking demonetisation and goods and services tax (GST) rollout.On a day long visit to Gujarat, Modi also reached out to traders, saying their past records would not be checked by the income tax department if they join the formal economy by getting themselves registered under GST. “After all reforms and hardcore decisions, the economy is on track and is going in the right direction,” Modi said addressingarally in Gujarat.“Many economists have agreed unanimously that the fundamentals are strong,” he added.He was apparently answering critics who have been saying the economy is in bad state.Congress vice president Rahul Gandhi had attacked Modi during his recent campaign tour in Gujarat, after the growth rate slipped to 5.7 per ce

GST Hits Excise-free Zones; Pharma, FMCG Cos Worried Firms petition govt after a new DIPP scheme offers them only 58% CGST reimbursement A new GST reimbursement scheme has left Dabur, Godrej and many other FMCG and pharmaceutical companies worried about their manufacturing operations in Himachal Pradesh, Uttarakhand and some northeastern states where they used to enjoy excise duty exemptions.Apprehension has set in after the department of industrial policy and promotion (DIPP) last week unveiled guidelines of a scheme that replaces the erstwhile excise-free zones, offering 58% central GST reimbursement. Companies that outsource manufacturing to job workers in these states have petitioned the government saying the new restrictions may render their businesses unviable. They are also exploring legal options.Many pharma companies including Cipla, Dr Reddy's, Johnson & Johnson and Wockhardt have plants in excise duty-free zones in Himachal Pradesh.TVS Motor, Lloyd Electric, TAFE

DIPP eases mechanism for processing FDI proposals The commerce and industry ministry has eased the mechanism for processing foreign direct investment (FDI) proposalsby doing away with the requirement of sending the applications to the department of revenue. Amending aprovision in the standard operating procedure for processing of FDI proposals, the Department of Industrial Policy and Promotion on Tuesday said that marking of proposals to the revenue department for their comments has been“discontinued” with immediate effect. The Business Standard, New Delhi,18th October 2017