Govt cuts import duty on smartphone components, spare parts to 10% from 15% Feb 01, 2024

Ahead of the Budget, the government reduced import duties on smartphone components and spare parts to 10 per cent from 15 per cent earlier. The Ministry of Finance (MoF) announced this in an official gazette notification on January 30. As part of the revision, tariffs on components such as battery covers, antennas, sealing gaskets, sim sockets, and others, included under the mechanics category, have been reduced. Similarly, import duties on die-cut components like LCD foam, conductive cloth, and sticker-battery slots, among others, have been slashed to 10 per cent.

NPA tag does not remove interest liability: NFRA 02-FEB-2024

Discontinuation of interest expense recognition based solely on the expectations of waiver or concession by the lender is a violation of the Indian Accounting Standards, the National Financial Reporting Authority (NFRA) said, cautioning against such practices by firms with regard to loans classified as NPAs. To ensure that such violations do not occur when firms make financial statements, the NFRA has issued a circular dated October 20. The idea is to draw the attention of all companies, audit committees and statutory auditors. Also, company secretaries have been advised to take note and apprise the boards of directors of companies of the issue.

Announcement OFFICE OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA 9

Empanelment of Chartered Accountant firms/LLPs for the year 2024-2025 Online Applications are invited from Chartered Accountant firms/LLPs who desire to be empanelled with the office of the Comptroller and Auditor General of India for the year 2024-2025 for considering for appointment as auditors of Companies as per Sections 139(5) and 139(7) of the Companies Act 2013 and of Statutory Corporations/Autonomous Bodies as per the provisions of their respective Acts. Online application form along with detailed instructions in this regard will be available on the website https://care.cag.gov.in/Authorised/Default.aspx from 05 January 2024 to 15 February 2024. The applicant firms/LLPs will have to fill/update the data showing the status of their firm as on 01 January 2024. After filling/updating the data, the firms/LLPs will be required to generate online acknowledgement letter for the year. If the firms/LLPs fail to generate online acknowledgment letter, their application would not be considered for empanelment. The firms/LLPs will be required to submit a printout of the acknowledgement letter generated online and also hard copies of the documents in support of their online application to this office by 28 February 2024

Advisory on Filing of Declaration In Annexure V by Goods Transport Agency (GTA) opting to pay tax under forward charge mechanism

Economists bat for hike in tobacco taxation for achieving Modi's USD 5 trillion economy vision

New Delhi: A substantial hike in tax on all tobacco items and stronger laws will not only bring the best out of human capital by ensuring better health of citizens, but also help in achieving Prime Minister Narendra Modi's vision of a five trillion dollar economy by 2025, experts have asserted. Noting that the health care burden due to tobacco consumption in India is around 1.04 per cent of GDP, pushing many into poverty, Arvind Mohan, Professor and Head, Department of Economics, University of Lucknow said a substantial increase in tax on these lethal items will close the gap.

Speaking at a webinar, he echoed views of the World Health Organisation (WHO) as well as many other international bodies like World Bank that tobacco taxation is an efficient tool, reducing tobacco consumption faster than any other single measure.

Tax implications of mutual fund investments

02 January, 2023

Investing in mutual funds is as good as investing in the underlying security itself. So, the taxation aspect of each scheme depends upon the asset classes in which the scheme invests. Like any other investment, it is important to consider the tax implications of mutual fund investments before making them.

For taxation purposes, mutual fund schemes can be categorised into two main types—equity-oriented schemes and non equity-oriented schemes. The former are those that invest at least 65% and above of their net assets in shares of listed Indian companies. Schemes that invest less than 65% or don’t invest in equity are non-equity schemes, such as liquid funds, debt funds, gold funds, etc. Both types are taxed differently.

IFRS Foundation and MoF China sign an MoU to establish an ISSB office in Beijing

31st December, 2022

The Trustees of the IFRS Foundation signed a Memorandum of Understanding (MoU) with the Ministry of Finance of China to establish a Beijing office of the IFRS Foundation. The MoU is effective for an initial three-year period.

The signing of the MoU follows the COP26 announcement of the International Sustainability Standards Board (ISSB) and its global and multi-location presence by the Trustees.

The Beijing office, established as a representative office, is expected to open in mid-2023. The office will work in collaboration and cooperation with other IFRS Foundation offices around the globe, with staff focused on leading and executing the ISSB’s strategy for emerging and developing economies, acting as a hub for stakeholder engagement in Asia, facilitating deeper co-operation and engagement with stakeholders, and undertaking capacity-building activities for emerging economies, developing countries and SMEs. The office will host meetings of the ISSB and its various advisory bodies and serve as a base initially for ISSB Member Bing Leng. ISSB Vice-Chair Jingdong Hua, who is responsible for overseeing the ISSB’s engagement across all developing and emerging economies, will regularly visit the office.

KMPG UK appoints new head of law

31st DECEMBER, 2022

Professional services firm, KPMG UK, has appointed Stuart Bedford as its new UK Head of Law. Bedford is set to join the firm from Linklaters where, in his position as corporate partner, he advised on a broad range of deals across Europe, Asia and Africa, including mergers and acquisitions, joint ventures and fund structures.

Bedford also spent two years as in-house counsel with BAE Systems. He moved to become a senior consultant for the technology and outsourcing consultancy, Grosvenor, and he also spent 18 months as a partner of a private equity firm focused on high growth companies, Leapfrog Investments. He will succeed Nick Roome, who has led KPMG’s UK law practice since 2015 and has now been promoted to take on a global focused role, concentrating on growing KPMG’s global legal solutions. Bedford and Roome will take up their new roles from April 2023.

KPMG’s UK CEO, Jon Holt, commenting on the appointment said: “We know there is a huge opportunity in this space to help clients succeed, and these leadership appointments position us well to accelerate that growth, both in the UK and globally.” Speaking on his new role, Stuart Bedford said: “I am excited to be taking on this new challenge and aim to build on the impressive strides KPMG Law has made in the past few years. We have a huge opportunity to build on the great work we are already doing at a time of accelerated change within the legal sector. I am very much looking forward to working with the team as we help our clients and the firm to achieve their ambitions.”

Mukesh Ambani outlines goals for GeNext in $207 billion empire

31st December,2022

Billionaire Mukesh Ambani outlined his ambitions for various businesses under his flagship Reliance Industries that are now helmed by his three children, in a clear sign that leadership transition was firmly underway at India’s largest company by market value.

Under elder son Akash Ambani’s chairmanship, Reliance Jio Infocomm should aim to provide “unique digital products and solutions” after emerging as India’s largest wireless service operator that rolled out world’s fastest 5G network, the 65-year-old Ambani said. He was speaking at an internal Reliance event, according to the copy of a speech shared by the company on Thursday.

Reliance’s retail business run by Akash’s twin, Isha, has “grown rapidly” with the widest and deepest reach in India, he said. The retailer should now aim to expand further, providing more jobs and revenues for various partners along its supply chain, according to Ambani.

31st December,2022
Tata Motors shall conclude the buyout of Ford India’s Sanand plant by January 10, 2023, the company said in a notification to the exchanges on Friday. The Tata Group flagship together with its Tata Passenger Electric Mobility (TPEM) had executed the so-called unit transfer agreement with Ford India Pvt Ltd (FIPL) on August 7, 2022 for acquisition of the latter’s manufacturing plant situated at Sanand, Gujarat.

This includes entire land and buildings, vehicle manufacturing plant along with machinery and equipment and transfer of all eligible employees of Ford’s vehicle manufacturing operations at Sanand, for a total consideration, exclusive of taxes, of Rs725.7 crore. As part of the transaction, all eligible employees of FIPL’s vehicle manufacturing plant have been offered employment with TPEML on terms, conditions and benefits of service similar to those that are currently availed by them, Tata Motors said in the statement.

Need more direct and indirect tax reforms: Tarun Bajaj

• 5TH DECEMBER,2022
  With regard to direct taxes, there is a need to "fix the capital gains on all fronts. Second is the personal income tax and the third is to rewrite the code itself to simplify it," Bajaj told ET in an interview. "If you do that, litigation will reduce," he said, laying down the agenda for reform. He said the goods and services tax (GST) needs to be rationalised and there is a case for making the exemption-less personal income tax regime better than the old one. In the case of GST, the number of slabs needs to be reduced and another look taken at exemptions. "We are reaching a stage in our economy where we need to give complete stability to the tax structures on both sides," he said.
  

PAN-Aadhaar linking deadline: 7 important FAQs you should know

Mar 29, 2022 

The last date to link one's PAN with Aadhaar is March 31, 2022. If both these documents are not linked by March 31, then there will be numerous consequences faced by an individual. For instance, if the PAN is not linked with Aadhaar by March 31, then firstly your PAN will become inoperative. Once the PAN becomes inoperative, then you won't be able to conduct various financial transactions such as opening of bank account, investing in shares, mutual funds etc. or wherever quoting of PAN is mandatory such as lower deduction of tax from salary, interest income etc.

PAN or Aadhaar made mandatory for cash deposits or withdrawals above Rs 20 lakh

• May 12, 2022
  In a notification issued on May 10, 2022, the government has come out with new rules especially pertaining to those making financial transactions without a Permanent Account Number (PAN) or Aadhaar. The Central Board of Direct Taxes has made new rules, called the Income–tax (Fifteenth Amendment) Rules, 2022.As per the new rules, furnishing PAN or Aadhaar will be compulsory in the following transactions:
  

No capital gains or any other tax for Adani deal: Holcim CEO Jan Jenisch

• May 17, 2022
  
  
• Switzerland’s building materials conglomerate Holcim Group will not incur capital gains tax or any other tax following the stake sale of its Indian assets – Ambuja Cements and ACC – for about $10.5 billion to Adani Group. This gains importance as Hong Kong-based Hutchison was marred in a controversy following a $11-billion deal with UK’s Vodafone Group in 2007. “Our analysis comes to the conclusion that there is no capital gains or any other tax for this transaction. Never know if any complication would arise, but we assume we will get the 6.4 billion Swiss francs as net proceeds,” Holcim Chief Executive Officer Jan Jenisch said in an analysts’ call on Monday.
  

GAAR probe begins on companies suspected of tax avoidance

• May 20, 2022
  
  

• The revenue department has launched investigations under the anti-tax avoidance law, General Anti-avoidance Rule (GAAR), into companies and entities that may have used creative methods to avoid paying taxes.
  A Hyderabad-based company, Ekge Retail, has received a notice in which the department has applied Section 96(1)(d) of the Income-tax Act, which deals with impermissible agreements undertaken to avoid taxation.
  The company has now approached the high court for state of Telangana at Hyderabad challenging the applicability of the section for some transactions undertaken by it in 2018 and 2019. The notice was issued to the company in February 2022.

MNCs under I-T lens over Esops to staff in India

• May 31, 2022
  
  

• Multinationals that allotted employee stock options (esops) to their India employees have come under the taxman's lens for tax applicability on these transactions. The tax department is questioning the Indian arms of multinationals on withholding tax when they make such payments to their parents. In most cases, employees around the world get stock options in the multinational's parent company, which is located outside India. "Many multinationals allocate global esops to employees and they tend to charge this amount to their Indian entities. The tax department is questioning whether any tax should be withheld on this amount when it's paid back to the foreign entity by the Indian entity," said Shefali Goradia, partner at Deloitte.

Foreign investors worried over new Mauritius tax angle on PE funds

• Jun 29, 2022
  Foreign investors betting on India by putting money into private equity (PE) funds here are taken aback by a recent observation by the Mauritius Revenue Authority (MRA), raising a hitherto ignored angle on tax – and in the process questioning investment structures that have been in vogue for years.According to a private ruling by MRA, investment vehicles in Mauritius, used by global investors to enter India, will have to pay tax in Mauritius on ‘capital gains’ they receive from a PE or debt fund in India when the latter exits an investment. Till now, a Mauritius entity paid tax to the Mauritius government only on ‘income flows’, like dividends and interest distributed by funds in India --- but not on capital gains booked in India.

• However, MRA, in a matter related to a global investor, has ruled that “all income distribution” made by AIF (alternative investment funds) Category II and III “will be treated as dividend income and therefore not retain their initial characteristics”.

Taxman Readies for a More Tech-driven Administration

• Jun 30, 2022

• Analytics & new tools are making the tax administration move towards efficient services and comprehensive use of data The influence of technology-based inputs for the taxman is becoming deeper. Its use has grown exponentially as the taxman is using data analytics to increase tax collection, target compliance and improve efficiency of its services. The most visible example of this is online tax filing and the processing of returns.

Swiss top court quashes move to stall transfer of info to India

• Jul 18, 2022
  
  

• The Swiss Federal Supreme Court has ruled that even if persons who are ultimate beneficiaries have not received any money from secret offshore trusts and numbered bank accounts, the Swiss authorities can still go ahead with sharing such confidential information with India - a stand that has dashed hopes of many resident Indians who were banking on the court to stall, or at least delay, the flow of data to the income-tax department here.
  

  Counsels hired by rich Indians have been arguing before the Swiss courts that such personal financial information has no relevance to the Indian tax office because the latter cannot tax the beneficiaries in the absence of any distribution of funds from foreign trusts.
  The top court, however, has laid down in multiple rulings over the last two weeks that it would not sit in judgement on why Indian authorities have sought information and whether they can claim tax on the back of such data. According to the supreme court, Switzerland will share information if India seeks it without judging the data's ultimate relevance and end use.

Aug 10, 2022

Sweeping technology-driven changes in tax administration for companies and individuals is unfolding, with services like never before. Voluntary tax compliance has been the buzzword. Use of technology and skilling of the tax professional is the quiet change. System and data-driven tax regime is unfolding the new way of undertaking tax compliance in India.

The four broad themes have been the pillars of silent change that has been brewing with the tax administration. A very scalable platform is now ready and allows for several new services being launched over an extended period. To begin with, a payment system that connects the platform to banks and financial institutions could make transactions easier is already working. Mobile-driven responses to AIS, mobile apps for convenience, use of e-filing and other new services are in the works.

Record keeping rules for charitable institutions get tighter

• Aug 12, 2022
  
  
  All charitable trusts, institutions, universities and other educational trusts and medical institutions are required to keep and maintain books of account, original bills of payment, PAN card, Aadhar card and address of voluntary donors and trustees, along with details of loan taken and investment made by them. Trusts and institutions are also required to maintain record of projects undertaken, voluntary contributions received, every fund transferred to others, incomes from assets and investments, and all purchases made by the trust.
  

• The Central Board of Direct Taxes (CBDT) on Thursday mandated all charitable trusts to maintain the records for 10 years from the assessment years for better tax scrutiny. In addition, all donations from overseas are required to be maintained strictly, it said. The trusts have to keep "application of income outside India containing details of amount of application, name and address of the person to whom any credit or payment is made and the object for which such application is made", the CBDT said in a notification.

Finance Ministry plans to review exemption-free tax regime to make it more attractive

Aug 16, 2022

The finance ministry is proposing to soon review the exemption-free new tax regime with a view to making it more attractive for individual income taxpayers, sources said. Eventually, sources said, the government aims to establish a system where there are no exemptions and the complex old tax regime with exemptions and deductions is terminated.The Union Budget 2020-21 introduced a new tax regime. Taxpayers were given the option to choose between the old regime with various deductions and exemptions and the new tax regime that offered lower tax rates without exemptions and deductions.

Tax department seeks to make faceless assessment smoother

• Aug 18, 2022

From setting up review panels to giving assesses time to respond to show cause notices and establishing a parallel verification system, the income tax department has worked out fresh checks and balances in its faceless assessment scheme to make it more robust.
Tax officers said that some of the changes were implemented at the start of the financial year itself, when 20 committees were set up to address concerns over high-pitched assessment that some of the taxpayers had raised. “Based on a review by the committees, we will establish whether the assessments are fair or not,” a senior officer said.

India, others oppose OECD plan on future digital taxes

• Aug 20, 2022
  
  

• India and other developing countries have objected to a provision in a multilateral convention that bars nations from enacting any future digital services taxes such as equalization levy, saying the clause will unduly restrict sovereign rights to make laws, a development seen delaying a global tax deal to address digitaisation challenges.“We should be conscious that any commitment beyond a political commitment, will effectively constrain future law-making powers of sovereign jurisdictions,” according to the comments submitted by the G-24 (Group of 24 countries that includes India) on the Progress Report on Amount A of Pillar One of the proposed OECD/G20 tax deal.

Supreme Court rules that benami law cannot be applied retrospectively

Aug 24, 2022

The Supreme Court on Tuesday ruled the amended Benami Act, which came into effect on November 1, 2016, applied only prospectively, besides declaring “unconstitutional” one of the provisions of the law dealing with a three-year jail term and a penalty. The jail provision was quashed on grounds of it being “manifestly arbitrary” — something that will provide relief to individuals and companies. Harsh punishments have been awarded under this provision.The court also set aside all action taken before the implementation of the Benami Transactions (Prohibition) Amendment Act, 2016.

Advance pricing agreement pipeline for MNCs clogged

Aug 25, 2022

With as many as 1,000 applications from multinational corporations seeking an element of tax certainty in India remaining unresolved, capital inflows into the real economy from abroad may take a hit. These applications filed under the Advance Pricing Agreements (APAs) mechanism are for pre-determination of arm’s length prices for certain periods in MNCs‘ transactions with related parties abroad. The APAs, introduced in 2012 and bolstered in 2014, had initially been effective in reducing tax disputes arising out of transfer pricing adjustments by the taxman. But there has been a decline in its efficacy as the agreements got delayed in recent years particularly after the pandemic, analysts said. They added that at a time when fresh investments by the private sector are key to economic revival given the government’s acute fiscal constraints, the delays in finalising APAs could prove to be costlier. In the past 10 years, about 1,500 APA applications have been filed by multinational businesses in India but only about 420 have been concluded, leading to around 1,000 unresolved applications.

Supreme Court set to review PMLA verdict, reconsider two provisions

Aug 26, 2022

The Supreme CourT agreed to consider a plea seeking a review of its earlier judgment upholding the constitutional validity of anti-money laundering provisions, including the powers of arrest and seizure.The court said it would re-examine two provisions of the Prevention of Money Laundering Act (PMLA), one with respect to providing a copy of the Enforcement Case Information Report (ECIR) to the accused and another related to the burden of proof on the accused regarding innocence.A Bench headed by Chief Justice N V Ramana said prima facie the two issues, including not providing the ECIR, required reconsideration, and sought a response from the Centre on the issue. During the hearing, senior advocate Kapil Sibal, appearing for the review petitioner, MP Karti Chidambaram, said the Act could be looked into if the court was reviewing its judgment. However, Justice Ram­ana did not accede to this request.

Q2 advance tax collections up 22%: Report

• 17 SEPTEMBER,2022

  The Centre’s advance direct tax collections grew by about 22% on year to Rs 1.81 trillion in the second quarter of the current financial year, CNBC TV18 reported.A senior revenue department official, however, told FE that the data was ‘premature’ as it was still being tallied. The due date for advance tax for September quarter was 15th of the month.The government’s advance direct tax collections from companies, LLPs and individuals in the first quarter (June quarter) was up 33% on year at about Rs 1.01 trillion.The Centre’s direct tax collections (post-refunds) grew by a robust 30% on year till September 8 of the current financial year even as refunds rose sharply by 65% during the period.

Direct tax kitty grows 30% in FY23 to Rs 8.36 lakh cr on higher advance tax mop-up

• Sep 19, 2022
  
  

• Gross direct tax collections grew 30 per cent to Rs 8.36 lakh crore till September 17 of current fiscal year on increased advance tax mop-up, the finance ministry said on Sunday.“The gross collection of direct taxes (before adjusting for refunds) for FY 2022-23 stands at Rs 8,36,225 crore compared to Rs 6,42,287 crore in the corresponding period of preceding financial year i.e. 2021-22, registering a growth of 30 per cent over collections of 2021-22,” the ministry said in a statement.

Tax collections to continue rising trend in coming months: Experts

Sep 26, 2022

The trend of increase in income tax collection is expected to continue in the coming months on increased compliance, higher corporate profitability and increased trade in festive season, experts said.The gross direct tax collection grew 30 per cent to Rs 8.36 lakh crore in the April to mid-September period of the current fiscal on increased corporate tax and personal income tax (PIT) mop up due to increased economic activity.