CA and CS HUB

No capital gains tax on share transfer via IPOs

By Deepshikha Sikarwar , ET Bureau
Experts say the clarification also does not address concerns of capital gains tax being levied on employee stock options or gifts in form of shares.

Genuine equity investments through initial public offers and bonus share issues won’t have to face long-term capital gains tax even if no securities transaction tax (STT) was paid on their transfers. The Central Board of Direct Taxes issued a draft notification to this effect on Monday, bringing relief to the investment community. 

It, however, failed to address a key concern related to off-market transactions in strategic purchases becoming taxable under the provision. Experts say the clarification also does not address concerns of capital gains tax being levied on employee stock options or gifts in the form of shares. The apex direct taxes body is seeking public comments on the notification clarifying the scope of a provision introduced in the budget this year to prevent tax abuse. 

The notification lists three types of transactions where the provision will apply, while sparing genuine ones. The first is investment in listed stocks that are not traded frequently and the acquisition of equity through preferential issues not falling under the Securities and Exchange Board of India (Sebi) issue of capital and disclosure norms. 

Second, those transactions where listed stock is not purchased over the exchange. Third, acquisition of shares in a company that's delisted and then listed again. 

Tax experts said the notification has addressed some concerns over the amendment related to section 10(38). But they pointed that the second clause poses risks to genuine investors. 

"This is an excellent notification by the government keeping in view the objective behind amendment to Section 10(38), which was to address cases of non-genuine, long-term capital gains being claimed as exempt from tax," said Sanjay Sanghvi, partner, Khaitan & Co. 

However, while the cases covered in the draft notification seek to address the issue of bogus and "non-genuine" cases, it should specifically exempt genuine instances such as private equity investments, employee stock options etc., Sanghvi said. 

In order to curb the practice of declaring unaccounted income as exempt from long-term capital gains by entering into sham transactions, the Finance Act, 2017 amended the provisions of Section 10 (38) of the Act. This meant exemptions under this section for income arising from the transfer of equity shares acquired on or after October 1, 2004, would only be available if the acquisition was chargeable to STT. 

However, to protect exemptions for genuine cases where STT could not have been paid, it was provided that the government would notify instances when the provision would not apply. These include share purchases inIPOs, bonus or rights issues by a listed company, stock purchases by non-resident Indians in accordance with the foreign direct investment (FDI) policy etc. 

But experts said that the second provision cited above may need another look. 

"This means that if an investor purchases shares of a listed company off market, he will not be able to claim capital gains tax exemption on sale of such shares even if the shares are sold on the stock market," said Rajesh Gandhi, partner, Deloitte Haskins & Sells LLP. 

He said this will have significant implications for all types of investors, specially private equity investors and strategic investors, which generally purchase a large quantity of listed company shares outside the stock exchange and could adversely impact the financial modeling and returns of such investors. 

"Allaying many concerns, as per the draft clarifications, most genuine transactions will continue to be exempt from tax, including mergers and demergers, gifts, etc.," said Abhishek Goenka, leader, direct taxes, PwC. "The category related to purchases off the stock exchange is too wide and could cover several genuine cases." 

However, a senior CBDT official told ET that genuine transactions won’t be taxed. "Genuine transactions like esops, bonus issues etc will not be touched," the official said.

Source: ET wealth

Paperwork required to handle TDS on sale of property

TDS deduction mandatory

1/7

It is mandatory for buyers of immovable property to deduct TDS from the amount to be paid to the seller. The buyer is required to deduct TDS @ 1% on the total consideration and deposit the same in the account of the income tax authorities in the prescribed format. Here's the low-down:

Form

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The buyer needs to fill out form 26QB either online or offline to deposit the TDS. One can click the following link to access the form online. https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

Due date for filing

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Form 26QB is required to be filed within 7 days from the month in which the TDS was deducted by the buyer.

Details

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Information with respect to the buyer and seller (name, address, PAN, status), details of the property, consideration and TDS payable must be entered in the form.

Payment

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One can choose to pay either through Netbanking or at the branch of the bank. If the taxpayer chooses e-tax payment on subsequent date at the bank branch, an acknowledgement number is generated. This number must be retained by the taxpayer to be presented to the bank while making the payment.

Process

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After the form is filed and payment made to the income tax authorities, approved form 26QB or form 16B can be downloaded by logging into TRACES as a tax payer. Form 16B must be provided by the buyer to the seller as a proof of deposit of TDS.

Important points to note

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1. Dealings in agricultural land are excluded from the requirements of these provisions.

2. If the consideration is being paid in installments, TDS must also be deducted on each installment.

3. If PAN is not provided by the seller, TDS @ 20% is deductible.

Source : economicstimes.com

RBI clears proposal to introduce Rs200 notes

RBI is likely to start the process of printing the new Rs200 notes after June, only after the government officially approves this new denomination, says an official

Gopika Gopakumar

RBI has already introduced new Rs2,000 and Rs500 banknotes. Photo: AP

The board of the Reserve Bank of India (RBI) has cleared a proposal to introduce banknotes of Rs200 denomination, two people aware of the development said.

The decision was taken at the RBI board meeting in March, these people said. They didn’t want to be identified as they aren’t authorized to speak to the media.

The process of printing the new Rs200 notes is likely to begin after June, once the government officially approves this new denomination, said one of the two people cited earlier.

An RBI spokesperson declined to comment.

The move to introduce lower denomination notes comes against the backdrop of the government’s move to rework the currency mix.

On 8 November, it announced the withdrawal of Rs500 and Rs1,000 currency notes, amounting to around 86% of currency in circulation of Rs17.9 trillion.

Since then, RBI has replaced these with the new Rs2,000 and redesigned Rs500 bank notes. As on 24 March, currency in circulation was Rs13.12 trillion, still around 27% off pre-demonetization levels. The government is encouraging digital payments and may not increase currency in circulation to the pre-demonetization level.

On 13 March, RBI lifted all cash withdrawal caps. ATM operators, however, say that there is a paucity of lower denomination banknotes.

So far, the central bank has not revealed how many of the old currency notes it has got back from the public. The window for Indians who were out of the country between 8 November and 30 December ended on Friday.

The RBI board has 14 members. Apart from governor Urjit Patel and four deputy governors, the board also has economic affairs secretary Shaktikanta Das and financial services secretary Anjuly Chib Duggal.

Source livemint

CBDT proposes norms for tax benefits for genuine equity deals

In order to protect genuine transactions, the CBDT came out with a draft notification specifying certain eligible transactions for tax exemption on which STT was not paid

PTI

Equity deals that will be exempt from tax would include transaction through preferential issues for shares which are not frequently traded, share transactions which are not affected through recognised stock exchanges, and also in cases where the company has been delisted. Photo: iStock

New Delhi: To check tax evasion through “sham transactions” in stock market and protect genuine ones, the tax department on Monday proposed to exempt specified deals from long-term capital gains tax in cases where securities transaction tax (STT) was not paid.

As per the Finance Act, 2017, the income arising by way of a transfer of long-term capital asset, being equity share in a company, will be exempt from tax if such transfer is undertaken after 1 October 2004 and chargeable to STT.

However, in order to protect genuine transactions, the Central Board of Direct Taxes (CBDT) on Monday came out with a draft notification specifying certain eligible transactions for tax exemption on which STT was not paid.

These would include, transaction through preferential issues for shares which are not frequently traded, share transactions which are not affected through recognised stock exchanges, and also in cases where the company has been delisted.

The CBDT has invited comments from stakeholders on the draft notification by 11 April.

The proposed measure is to protect the exemption for genuine cases where the STT could not have been paid like acquisition of share in IPO, FPO, bonus or rights issue by a listed company acquisition by non-resident in accordance with FDI policy, CBDT said in a release.

Source livemint

Tax department proposes to ease anti-abuse clause in finance bill

Tax department clarified that a budget proposal to levy capital gains tax on all equity share sales where securities transaction tax has not been paid would apply in three cases

Gireesh Chandra PrasadRemya Nair

While tax experts welcomed the move in general, they fear that one of the three specified instances could hit M&As.

The tax department has proposed to soften an anti-abuse provision in Finance Bill 2017 meant to check money laundering by limiting its scope to only three specified instances of abuse.

A draft notification issued by the department on Monday clarified that a budget proposal to levy long-term capital gains tax (LTCG) on all equity share sales where securities transaction tax (STT) has not been paid would be applicable only in three cases.

These are: sale of listed equity shares in a company done outside a recognized stock exchange; acquisition of listed equities that are not very frequently traded on the stock exchanges through a preferential issue except in cases of court-approved mergers and cases of rehabilitation and debt restructuring; and the acquisition of equity shares in a company that is de-listed.

The proposal gives relief to investors acquiring shares in initial and follow-on public offers and non-residents participating in bonus or rights issues of a listed company, where securities transaction tax is not paid.

While tax experts welcomed the move in general, they fear that one of the three specified instances—sale of listed equity shares in a company done outside a recognized stock exchange—could hit mergers and acquisitions (M&As).

M&As are often done off-market to avoid influencing share prices and could attract capital gains tax as per the draft notification, according to Amit Maheshwari, partner, Ashok Maheshwary and Associates LLP.

The tax department will receive feedback on the draft till 11 April.

Ravi Mehta, partner, Grant Thornton India LLP, said, “On a literal reading, it could encompass both primary as well as secondary transactions, including genuine transactions such as purchase of shares under employee stock options, fresh fund-raising by listed companies from promoters or financial investors during down-turn and genuine off-market purchases such as share acquisition where price also includes control premium.”

In many cases, income tax would have been properly paid by sellers and, hence, there would be no effective revenue loss to the exchequer, added Mehta.

“This (provision) would dissuade acquirers to purchase shares of listed companies through a private transaction/off market. There have been several instances where some of the large acquisition transactions, including by private equity investors, have been undertaken off-market purely for commercial reasons,” said Anil Talreja, Partner, Deloitte Haskins and Sells LLP.

Still, the draft is conceptually appropriate and some of the issues with it should ideally be sorted out in the final notification, said Pranav Sayta, tax partner, EY India.

The anti-abuse provision was introduced in the budget this year after the Supreme Court-appointed special investigation team on black money highlighted the use of penny stocks in money laundering by inflating their price through market manipulation.

Source livemint

IT Dept gets 12 lakh responses on deposits during note ban

Income Tax department under its 'Operation Clean Money' project has received more than 12 lakh responses from 8.38 lakh distinct PANs/persons whose cash deposits were not in line with their tax profiles, Parliament was informed today.

Income Tax department under its 'Operation Clean Money' project has received more than 12 lakh responses from 8.38 lakh distinct PANs/persons whose cash deposits were not in line with their tax profiles, Parliament was informed today.

"To leverage technology and data analytics for e-verification of cash deposits made during the demonetisation period, I-T department has initiated 'Operation Clean Money project(OCM). Under OCM, about 18 lakh persons have been identified whose tax profile were prima facie not in line with the cash deposit made by them during the demonetisation period.

"...more than 12 lakh responses have been received from 8.38 lakh distinct PANs/persons," Minister of State for Finance Santosh Kumar Gangwar said in a written reply to the Lok Sabha.

Gangwar further said that in case explanation of sources of cash is found justified, the verification will close.

Noting that enforcement actions such as searches and surveys are also conducted on appropriate cases, including those who are non-compliant, the Minister said "action in such cases are part of continuous process under the Direct Taxes law."

Gangwar said investigations conducted by the I-T department post demonetisation have revealed various kind of malpractices and manipulations by certain persons/entities including owners of petrol pumps, CNG and gas agencies.

"Appropriate action against such persons is taken by the jurisdiction authorities of the ITD as per provisions of the Income-tax Act, 1961," he said.

Stating that while deposits and sales of all petrol pumps, CNG and gas agencies have not been scrutinised, Gangwar pointed out in certain cases of petrol pumps/LPG distributorship/CNG pumps, excess cash deposits over and above sales made in corresponding period have been found during the enforcement actions by the ITD.

"During the period from November 9, 2016 to January 10, 2017 more than 1,100 searches and surveys were conducted by the Income Tax department apart from issuing more than 5,100 verification notices," the minister said.

"These notices led to the seizure of valuable of more than Rs 610 crore which includes cash of Rs 513 crore. Seizure in cash of new currency notes was about Rs 110 crore," he added.

Further, the minister said undisclosed income detected in these new actions was more than Rs 5,400 crore.

Source : moneycontrol.com

Disclose deposits of Rs 2 lakh or more post note ban in new ITR forms

By ET Bureau 

NEW DELHI: Those who deposited cash of Rs 2 lakh and more in their accounts during the demonetisation drive will have to make a declaration in their income tax returns for the fiscal year that's just ended, as a follow up to the government's efforts to eliminate black money through the note-swap exercise. 

The tax return form notified by the income tax department -— now simplified to one page for most payers—includes a provision for such a declaration. 

In part E of the form that seeks other information from the assessee including bank details, another column has been added seeking details of cash deposited between November 9 and December 30 last year if the aggregate amount over this period was Rs 2 lakh or exceeded that. 

The last date for filing declarations under the Pradhan Mantri Garib Kalyan Yojana ended on March 31. 
The tax department said parts relating to tax computation and deductions have been rationalised and simplified for easy compliance. The one-page ITR Form-1(Sahaj) is for individuals with an income up to Rs 50 lakh, one residential property and other income such as interest. This will cover most taxpayers. 

"This will reduce the compliance burden to a significant extent on the individual taxpayer," the department said in a statement. "This initiative will benefit more than two crore taxpayers who will be eligible to file return of income in this simplified form." 

Number of tax forms have been reduced from nine to seven by unifying ITR-2, ITR-2A and ITR-3 into one ITR-2 form. ITR-4 and ITR-4S (Sugam) have been renumbered as ITR-3 and ITR-4 (Sugam), respectively, it said. 

All returns have to be filed electronically except for ITR-1 (Sahaj) or ITR-4 (Sugam) by those who are 80 years or more as well as individuals or Hindu Undivided Families (HUFs) with an income of up to `5 lakh and no refund claims. In such cases a paper form can be filed. 

PMGKY DEPOSITS 
Income tax offices were to have stayed open until midnight on Friday to accept last-minute deposits under PMGKY scheme. 

The scheme gave one last chance to those who deposited unaccounted cash after the demonetisation announcement on November 8 to come clean after paying 50% tax and penalty and putting another 25% of the amount declared in a non-interestbearing deposit for four years. 

The department had sent out messages to those who made large deposits to explain their source. Those making declarations under the scheme can file returns by April 10 if they have paid taxes and penalties till March 31.

Source : economicstimes.com

GST Bills–CGST, IGST, UTGST and Compensation to States, introduced in Lok Sabha on 27.03.2017 and passed by Lok Sabha on 29.03.2017. The following are the key features of the Bills :-

CGST provides for a maximum tax of 20 per centActual rates would however be a four-tier tax structure of 5, 12, 18 and 28 per cent as approved by the GST CouncilA Union Territory GST Bill will take care of taxation in UTs of Chandigarh, Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli and Daman and DiuA Bill on Integrated-GST — to be levied and collected by the Centre on inter-state supply of goods and services, was also introduced in the Lok SabhaThe IGST law provides for a maximum tax of 40 per centJaitley also introduced a fourth legislation called GST (Compensation to States) Bill, 2017 that provides for mechanism for making good any loss of revenue of states from introduction of GST in first five years of rolloutAnother mirror legislation of CGST, called State-GST, will amalgamate all state taxes like VAT, will be levied by states and has to be approved by all state legislaturesTogether, CGST and SGST will enable the GST incidence of 40 per centGST will not apply to Jammu and KashmirThe CGST Bill also provides for e-commerce companies to collect tax at source at a rate not exceeding 1 per cent of net value of taxable supplies, out of payments to suppliers supplying goods or services through their portalsTo protect small businesses, the CGST provides for a tax of no more than 1 per cent of turnover for manufacturers with annual turnover of up to Rs 50 lakhA 2.5 per cent tax is prescribed for suppliersTo ensure that benefit of lower taxes is passed on to consumers, an anti-profiteering measure has been incorporated in the lawIt provides for constituting an Authority to examine whether input tax credits availed by any registered taxable person, or the reduction in the price on account of any reduction in the tax rate, have actually resulted in a commensurate reduction in the price of the said goods and/or services supplied by himThe law provides for arrest, ordered by no less than a Tax Commissioner, in case of suppression of any transaction or evading taxes. A person convicted is punishable by up to 5 years of imprisonment and/or fineThe Compensation Law provides for levy of cess on top of the peak rate of approved tax (28 per cent presently) on paan masala, tobacco, aerated waters, luxury cars and coal to create a non-lapsable fund for compensating statesCompensation will be paid bi-monthly and the amount due would be calculated after considering a 14 per cent growth rate in taxes over the base year of 2015-16Touted as the biggest taxation reform since independence, GST is expected to boost GDP growth by up to 2 per cent. The government proposes to roll out GST by July 1, 2017.

Source- ICSI

Revision in the Annual Membership fee, Entrance Fee and Certificate of Practice fee for Associate and Fellow Members w.e.f. 1^st April, 2017

The Council of the Institute has decided revision in Annual Membership fee, Entrance fee and Certificate of Practice fee for Associate and Fellow Members w.e.f. 1^st April, 2017, as under:

ParticularsAssociateFellowAnnual Membership feeRs. 2500Rs. 3000
Entrance feeRs. 2000Rs. 2000
Certificate of Practice feeRs. 2000Rs. 2000

The existing facility for payment of fee in advance/concessional fee shall remain in vogue for the revised fee structure.

CA Pratik Anand

In the final draft of the finance bill’2017, the government is proposing to ban all transactions in cash above Rs. 2 lacs from 01.04.2017.

If and when the proposed amendment to the finance bill’2017 is passed by the parliament then any person who enters into a transaction above Rs. 2 lacs in cash, will be liable to a penalty of an amount equivalent to the amount of transaction.

Proposed New Section 269ST reads as under:

No person shall receive an amount of two lakh rupees or more—

(a) in aggregate from a person in a day; or 

(b) in respect of a single transaction; or 

(c) in respect of transactions relating to one event or occasion from a person,

otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account: 

Provided that the provisions of this section shall not apply to—

(i) any receipt by—

(a) Government;

(b) any banking company, post office savings bank or co-operative bank;

(ii) transactions of the nature referred to in section 269SS;

(iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

Therefore, in light of the above the government has proposed to ban all types of transactions in cash above Rs. 2 lacs.

The important points to note in respect of the above are as follows:

1) The restriction is on receipt of cash and not on payment of cash above Rs. 2 lacs:

Any person who receives above Rs. 2 lacs in cash will be liable to penalty equivalent to the amount received.

There is no restriction on payment of cash. However, it is to be noted that there is an existing provision for restricting cash payments above Rs. 20,000/- for business purposes. This provision has also been amended and now cash payments above Rs. 10,000/- shall not be allowed as expense in the income tax return.

2) Receiving cash above Rs. 2 lacs in a day from a person is not allowed:

Receipt of more than Rs. 2 lacs from a single person in a day is not allowed even though the amount has been paid in multiple transactions during the day which are below Rs. 2 lacs.

3) Receipt exceeding Rs. 2 lacs for a single transaction is not allowed:

For example, if a transaction is for Rs. 7 lacs, then a single payment for such transaction cannot exceed Rs. 2 lacs.

4) Receipt above Rs. 2 lacs in respect of a single event or an occasion from a person: 

The most common example of occasion is marriage, therefore a person cannot receive more than Rs. 2 lacs in cash for such occasion from a person.

Also important to note that this limit on an occasion is not limited to per day basis therefore receipts even on various days in respect of a single event or occasion aggregating above Rs. 2 lacs is prohibited.

If the receipts are from different persons, the same would not be covered by the third circumstance, even if the same relates to a single event or occasion.

5) What can be the case which is not covered under all the three circumstances?

Receipts from same person are permitted if the same is below the specified limit and on different days. If the same is not in relation to a single transaction and/or same event/occasion.

6) Nature of receipt does not matter

Another important point to be noted in respect of the proposed new section is that the nature of receipt does not matter.

Therefore, even if a person receives a sum which is not chargeable to tax still he would be hit by the provisions of this section and would be liable to penalty.

Receipts can be anything such as proceeds of sales of goods, income of whatsoever nature – taxable or not, gifts, capital receipts, loans, advances, government grants, subsidies, encashment of bonds/securities, encashment of instruments like National Savings Certificates, proceeds of Life Insurance Policies, scholarships, sale of shares, transactions between related parties and so on.

The nature of receipt is very wide and it would be interesting to see if the government exempts any circumstances in the future.

7) Who are the persons and what are the transactions exempted from section 269ST?

The proposed section 269ST would not be applicable in following cases:

“(i) any receipt by—

(a) Government;

(b) any banking company, post office savings bank or co-operative bank;

(ii) transactions of the nature referred to in section 269SS;

(iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify”.

Therefore, if Govt. or a banking company receives any sum in contravention of this section, they would not be liable to any penalty.

Another interesting point to note is that receipt of money from a banking company is not exempted. Therefore even cash withdrawal in contravention of the above limits can be hit by the provisions of the proposed section 269ST.

8) What are the other points that should be kept in mind in respect of Section 269ST?

Some of the other relevant points to be considered are:

It is irrelevantthat the person receiving the cash has a PAN or not and whether such person is assessed to income tax or not. Source of income of the recipient is irrelevant and nature of receipt of such person is also irrelevant.This section would also apply to transactions between related persons.The provisions would also apply to transactions between persons who are otherwise exempt from tax.Restriction would apply on all persons/entities except those which are specifically exempted like banks etc. Therefore, section 269ST will be applicable on receipt of money by all persons such as individuals, HUFs, firms, companies, trusts, charitable Institutions, AOPs/ BOIs etc.

9) What are the modes of receipt which are not allowed?

Some of the modes of receipt which are not allowed are cash, bearer cheque, crossed cheque, self cheque, adjustment or transfer entry in the books of account.

However, going by the literal interpretation of the section any receipt of money other than by account payee cheque or account payee draft is not allowed. Whether this would cover transfers by e-payment wallets like Paytm etc which are very common these days will have to be clarified soon.

10. Section is applicable to receipts irrespective of the fact that they are with or without consideration.

Section 269ST is applicable to receipts irrespective of the fact that they are with or without consideration.

In case of receipts without consideration, there can be dual impact of penalty under this section and under section 56 of the Income Tax Act’ 1961 in some specific cases.

11) What is the penalty for violating section 269ST?

The Govt. proposes to introduce a new section prescribing penalty for violating the provisions of section 269ST. As per this section:

(1) If a person receives any sum in contravention of the provisions of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt.

(2) The penalty will be not be levied if such person proves that there were good and sufficient reasons for the contravention.

What are good and sufficient reasons will be decided on a case to case basis by the joint commissioner as the joint commissioner has the power to levy such penalty.

(The author is a CA in practice at Delhi and can be contacted at: E-mail: contact@capratikanand.com, Mobile: +91-9953199493)

Central Board of Direct Taxes (CBDT’s) APA Program crosses the 150 Milestone

The Central Board of Direct Taxes (CBDT) has entered into 9 Advance Pricing Agreements (APAs) during the last two days of the current financial year. All the 9 Agreements entered into are Unilateral APAs. With this, the total number of APAs entered into by the CBDT has reached 152. This includes 11 Bilateral APAs and 141 Unilateral APAs. In Financial Year 2016-17, a total of 88 APAs (8 Bilateral APAs and 80 Unilateral APAs) were entered into. The APAs signed in financial year 2016-17 include Agreements with some technological behemoths having major operations in India in the IT sector.

The 9 APAs entered into during the last two days of the current Financial Year pertain to various sectors of the economy like Information Technology, Aviation, Oil & Gas, Automobiles, Electricals & Electronics, etc. The international transactions covered in these agreements include Receipt of Intra-Group Services, Provision of IT Enabled Services, Provision of Software Development Services, Provision of Engineering Design Services, Provision of Marketing Support Services, Import of Traded Goods, Payment of Interest on ECB, Receipt of Interest, Receipt of Guarantee Fee, Receipt of License Fee, Export of Goods, Receipt of Technical Support Services, Provision of Business Support Services, etc.

The APA Scheme was introduced in the Income-tax Act in 2012 and the “Rollback” provisions were introduced in 2014. The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance. Since its inception, the APA scheme has been well-accepted by taxpayers and that has resulted in more than 800 applications (both Unilateral and Bilateral) being filed so far in five years.

       The signing of 88 APAs in a single year (F.Y 2016-17) is a significant achievement of the CBDT and its Officers. The progress of the APA Scheme strengthens the Government’s resolve of fostering a non-adversarial tax regime. The Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.

No. of Advance Pricing Agreements signed by CBDTS. NoFinancial YearUnilateral APAsBilateral APAsTotal12013-1450522014-1531432015-165325542016-1780888Total14111
152

The Union Government has announced revised rates of interest on Small Savings Schemes for the First Quarter of 2017-18 to bring them somewhat closer to market rates

Small Savings schemes will continue to be attractive as some of them enjoy income tax benefits and additional interest rate spreads

Revision of rates is a reflection of calibrated reform of the Union Government in the financial sector to ensure better interest rate transmission

The Union Government has announced revised rates of interest on various small savings schemes for the first quarter of the financial year 2017-18.  To bring such rates somewhat closer to market rates, the Government has decided to effect a reduction of 0.1 percentage points (10 basis points) in interest rates across the board in all the schemes except the Post Office Savings Account, which has been left untouched.

Government continues to accord highest priority to the interest of small savers, especially savings for the benefit of girl child, the senior citizens and the regular savers who form the backbone of our savings architecture. The current revision of rates is reflective of the Government’s commitment to calibrated reform in the financial sector to ensure better interest rate transmission.

Various small savings schemes will continue to be very attractive compared to bank deposits of similar maturities and tenor even after this marginal reduction in interest rates by 0.1 percentage points.  Apart from offering higher interest rates compared to bank deposits, some of the small savings schemes also enjoy income tax benefits.  Further, small savings schemes like Senior Citizens Savings Scheme (SCSS), Sukanya Samriddhi Account (SSA), PPF, 5 year National Savings Certificate (NSC), 5 year Monthly Income Scheme (MIS) and 5 year Time Deposits (TD) enjoy additional interest rate spreads.  This additional interest rate spread is 100 basis points in the case of Senior Citizen Savings Scheme, 75 basis points in Sukanya Samriddhi Account and 25 basis points spread in PPF, 5 year NSC, 5 year MIS and 5 year TD.

Source- Press Information Bureau, Government of India, Ministry of Finance, Dated: 31-March-2017

Extract of Clause 171 of Central Goods and Services Tax Bill, 2017

171.(1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.

(2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.

(3) The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed.

Clause 171 of CGST Bill 2017 provides that it is mandatory to pass on the benefit due to reduction in rate of tax or from input tax credit to the consumer by way of commensurate reduction in prices.

While the objective may sound simple, implementing an anti-profiteering clause is fraught with grave risks.The Biggest Challenge will that government will have to ask for pre- and post-GST cost sheet of each product and calculate the pre-GST tax rate and post-GST tax rate for each and every item to understand the quantum of tax benefit that a supplier should get.

In My Personal View even if this might be just for transition (if it is like that assumingly) this defeats the complete mechanism of GST which is supposedly Destination based Consumption tax i.e. The Final Consumer is to bear the complete GST of the Value Chain. Inflation if rises was always expected and further the inflation aspect gets covered by multiple tax rate slabs wherein essential commodities will suffer less or no rate of GST.

About the Author: CA Ankit Gulgulia (Jain)

Author is Practicing Chartered Accountant in New Delhi/NCR and specialising in Indirect Taxes, Corporate Laws and Transfer Pricing. He can be reached at ankitgulgulia@gmail.com or at +91-9811653975

Source : taxguru.in

Directorate General of Human Resource Development
(Infrastructure & Welfare Wing)
Central Excise & Customs
C-4. Ground Floor. West Wing. IRCON Building
District Centre, Saket. New Delhi-110 017

F.No. 916/02/PMC/HRD-ID/2016 Date: 31st March, 2017

To,
All Principal Chief Commissioners/ Chief Commissioners, Central Excise & Service Tax
All Principal Directors General / Directors General under Central Board of Excise & Customs.

Sir/Madam,

Sub : Infrastructure proposals relating to formations in GST regime-reg

The re-organisation of field formations and Directorates of CBEC in the GST regime which is likely to be rolled out from 1st July, 2017. as approved by the Government, has since been communicated to you by the HRM Wing of the Directorate. The approved Re-organisation is also available on the CBEC website www.cbec.gov.in and DGHRD website www.dghrdcbec.gov.in

2. Consequent to the re-organisation of the field formations and certain Directorates, viz., DGCEI, NACEN, Systems and Tax Payer Services and creation of new Directorates. viz., Directorate General of Analytics & Risk Management and Directorate of International Customs; immediate action needs to be taken to set up new offices in your respective charges which should be functional by 15th June, 2017.

3 Accordingly, it is requested that immediate appropriate steps may be taken to identify requisite office accommodation which may be required and in cases where administrative approval and expenditure sanction is required from the Ministry, proposals, complete in all respects, as per the Infrastructure Manual, 2015 may be sent to ADG (I&W), DGHRD expeditiously to enable

this Directorate to process the same and get the requisite approvals from the competent authority well before 1st June, 2017,

4. Further, the requirement of additional funds, if any, for taking the office accommodation on hiring or purchase may also be projected by 30th April, 2017 so that the EMC Wing of DGHRD is able to project the same in the 1st Supplementary for 2017-18 (due in June, 2017) well in time. The requirement of funds for this purpose may also be separately communicated to the Additional Director (EMC), DGHRD.

5. It is requested that this matter may be accorded utmost priority having regard to the urgency in preparedness for the smooth roll out of GST.

Yours Faithfully,

(Sunil K. Sawhney)

Director General