GST final Draft to Retain Clause on Services Sector

The goods and services tax (GST) council is likely to retain a clause in the law that will require service providers to register in every state where they operate, despite recent representations from various Union ministries and telcos, banks, and insurance firms for a single registration system in chartered accountants firm.
At present, service providers benefit from a single centralized registration system for paying service tax—a tax levied and collected by the Union government.
However, under the GST regime, even states will get the powers to collect tax on services and the service providers will have to register in every state where they have operations in direct foreign investment in India.
As per the provisions of draft GST laws that will be finalized in the 11th meeting of the GST council on 4, and 5 March, service providers operating across India will have to obtain more than 30 separate registrations. Companies have highlighted the procedural hassles of such a move but states, concerned about their revenue, are not willing to agree to a centralized registration.

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Govt Cracks The Whip On Shell Companies

After trying to tighten the rules against shell companies through its Budget proposals, the government has decided to follow with “harsh punitive” action that will include freezing of bank accounts and striking off the names of dormant companies.Their investments in real estate could also come under the scanner, as the government has also decided to invoke the Benami Transactions (Prohibition) Amendment Act. A meeting was held in the Prime Minister’s Office with senior officers of various departments on Friday to review the functioning of companies which do not conduct any operations and do money laundering in India, went an official statement. The regulatory ministry concerned will ensure disciplinary action is initiated against professionals abetting such malpractices and operations in chartered accountant firms in Mumbai.

The basic approach is to prevent money laundering and tax evasion in foreign company registration in India. The government will use technology to identify shell companies. A database on these companies and their directors would be built by pulling information from various agencies. In the Budget for 2017-18, the government has proposed to impose a 10 per cent long-term capital gains tax on those who have invested in unlisted stocks but not paid the securities transaction tax after 2004.

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Roll out of IGST 1st July 2017, Draft CGST Law and Draft IGST Law approved in the 11th Council Meeting Held on 4 March 2017

The GST Council in its 9th Meeting held on 16 January 2017 took note of the work to be completed for the rollout of GST and after deliberations, agreed to extend the date for rollout of GST from 1st April 2017 to 1st July 2017. Steps taken to ensure rollout of GST by 1st July 2017 include approval of the Draft GST Compensation Law by the GST Council in its 10th Meeting on 18 February 2017 held in Udaipur, Rajasthan. Subsequently, the Draft CGST Law and Draft IGST Law were approved in the 11th Council Meeting held on 4 March 2017 at New Delhi. The issues of dual control and cross empowerment were resolved in the 9th Meeting of the GST Council held on 16 January 2017 in which a broad agreement was reached on the issue of cross empowerment to achieve single interface of taxpayer with the tax administration in the GST regime in foreign company registration in India.
GST Council is presently deliberating on various issues entrusted to it. All the decisions taken by the Council so far have been based on consensus. GST is going to be implemented soon in the country, therefore, simultaneous and concert efforts are also being made by the government in the form of IT readiness, rigorous consultations, workshops and training sessions for the industry and traders, and all other stake holders involved etc in Chartered accountant firms in Mumbai.

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Poem Rules Only For COS Earning Over Rs 50 CR.

The Central Board of Direct Taxes, the apex direct taxes body, has issued a circular clarifying that the provisions relating to place of effective management (POEM) will apply to companies with over Rs. 50-crore turnover.
The clarificatory circular comes after a CBDT press release specified this but the circular issued omitted a mention in chartered accountant firms in mumbai.
“…it is clarified that provisions of Sec 6(3)(ii) relating to place of effective management (POEM) won’t apply to companies having turnover or gross receipts less than Rs. 50 crores in a financial year,“ it said.
The board had on January 24 issued final guidelines to determine if an entity can be considered an Indian resident and taxed here.
These norms come into effect from April 1, 2017.
A foreign company will be considered Indian resident if its place of effective management in a given year is in India.The rules seek to curb tax avoidance, targeting shell companies incorporate outside India, but their real control and management is in India.
The limit will ensure that only substantive cases are taken up and small companies do not clog the system Tax consultancy firms in Delhi.

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No GST Credit If Vendors Are Not Paid in 90 Days.

The Government circulated draft of the GST Model Law requesting for suggestions from the industry. The industry and experts have been poring over the draft. The article seeks to highlight the need to reconsider one of the provisions related to input tax credits. The proposed GST Legislation appears to deny tax credit in relation to input services for which payments are made after three months of the date of the invoice of the supplier. In fact the proposal mandates payment of interest in addition to the denial of credit in foreign company registration in India.
Also, under the current legislation, customer can re-claim the credit reversed earlier on making payment against the invoice. However, a similar provision is missing under GST and consequently may result in permanent loss of input credit of tax paid earlier in tax consultancy firms in Delhi.

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India's Growth rate of more than 7% is the strongest Am,ong G-20 Countries OECD Survey

The Indian economy is expanding at a fast pace, boosting living standards and reducing poverty nationwide. Further reforms are now necessary to maintain strong growth and ensure that all Indians benefit from it, according to a new report from the OECD. The latest OECD Economic Survey of India 2017 finds that the acceleration of structural reforms and the move toward a rule-based macroeconomic policy framework are sustaining the country’s longstanding rapid economic expansion. The Survey, launched in New Delhi today by OECD Secretary-General Mr Angel Gurria and Secretary, Department of Economic Affairs, Ministry of Finance, Govt. of India, Shri Shaktikanta Das, hails India’s recent growth rate of more than 7 percent annually as the strongest among G-20 countries. It identifies priority areas for future action, including continuing plans to maintain macroeconomic stability and further reduce poverty, additional comprehensive tax reforms and new efforts to boost productivity and reduce disparities between India’s various regions in tax consultancy firms in Delhi.
The implementation of the landmark GST reform will contribute to making India a more integrated market. By reducing tax cascading, it will boost competitiveness, investment and job creation. The GST reform – designed to be initially revenue-neutral – should be complemented by a form of income and property taxes, the Survey said in tax consultant in India.

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New GST Rules May Impact Auto Consumer Durables

After getting hit by the transition of new fuel technology — from Bharat Stage-III (BS-III) to BS-IV — the automobile sector in the country may be awaiting yet another shocker. The proposed taxation format under the upcoming goods and services tax (GST) is likely to fuel inflation, and increase the tax burden of secondhand car buyers and those opting for exchange offers. It may also increase the working capital of dealers of used vehicles. Earlier the tax used to be calculated on the discounted value of a product in the case of exchange schemes after the market value of the old vehicle was deducted in tax consultancy firms in Delhi. The proposed GST rules, issued by the government on Sunday, will consider the market value of the new vehicle while calculating the tax burden. Thus, consumers may end up paying more as the discounted amount would be taxed. Under the new GST rules, retailers and traders dealing in used vehicles will come under taxation. While under the existing rules, secondhand products are outside the purview of tax, sellers will have to pay taxes at the same rate as the new products in indirect taxation in India.

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New Tax Norms Target Shell Firms

The government on Tuesday issued guidelines to plug tax evasion by shell companies or foreign firms set by groups in India to retain income outside the country, dashing hopes of industry. The rules outline companies incorporated overseas but with effective control of that implementation of these norms would be deferred to next year.The rules will affect companies in industries like pharmaceuticals, automobiles, energy, manufacturing and software. The guidelines have a few safeguards that were not present in draft norms issued in 2015 such as a collegium of officers to vet whether companies are to be taxed on the basis of their place of effective management (POEM) and test of active business. However, experts warned even then there could be subjectivity in establishing Poem. Business and majority ofboard meeting in India will be considered a tax resident. The rules will not apply to companies with a turnover or gross receipts of ~50 crore or less in a financial year. “The intent is to target shell companies and accounting outsourcing companies in India created for retaining income outside India although real control and management of affairs is located in India,” the Central Board of Direct Taxes (CBDT) said in a release. The rules will come into effect from assessment year 2017-18, which essentially means the current financial year. Tax consultancy firms in Delhi pitched for a deferment raising compliance concerns because the rules were issued in the tenth month of the financial year.

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Startup Brace For legal War With I-T

With startup fever having waned over the past year or so amid concerns over profitability and competition, valuations have declined sharply. Last month, the tax consultancy firms in Delhi department challenged such reductions at about 100 startups and issued orders seeking 33% tax at the elevated levels that prevailed earlier.
Some startups have moved the income-tax tribunal against the notices while others have approached their advisers and could seek legal recourse in the coming days.

Lets Recycle, an Ahmedabad based and Aavishkaar Ventures-backed waste management startup, was among those to get the tax demand and has challenged it at the Income-Tax Appellate Tribunal. “Entrepreneurs don’t understand I-T notices as they have to struggle daily to improvise business processes,“ said Lets Recycle founder Sandeep Patel. “When I-T (income tax) acts this way, investors will be sceptical to invest, entrepreneurship will never be born and startups will never become (large) enterprises.“ He said his startup directly or indirectly employs 1,650 waste pickers, among them 200 from the weaker sections of the society in chartered accountant firms in mumbai.

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Threshold Limit on ESI Increases to Rs. 21,000

As per notification issued by Ministry of Labour and Employment dt. 22nd December, 2016, in exercise of the powers conferred by section 95 of the Employees’ State Insurance Act, 1948, the Central Government, after consultation with the Employees’ State Insurance Corporation, hereby makes the following rules further to amend the Employees’ State Insurance (Central) Rules, 1950, namely:- 1. (1) These rules may be called the Employees’ State Insurance (Central) Third Amendment Rules, 2016. (2) They shall come into force from 1st day of January, 2017. 2. In the Employees’ State Insurance (Central) Rules, 1950, in rule 50, for the words “fifteen thousand rupees” occurring at both the places, the words ‘twenty one thousand rupees” shall be substituted in chartered accountant firms in mumbai.
In simple words, lower rate of contributions (3% instead of 4.75% for employers and 1% instead of 1.75% for employees) will apply in areas where the Act is implemented for the first time in Tax consultancy firms in India.
The increase in wage cap will augment the burden on employers as they have to pay 4.75% of an employee’s salary as ESI contribution every month (Rule 51 of the Rules). A benevolent amendment indeed for the employees; however the far reaching effect & impact thereof will be seen in times to come.
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Tax Experts Hope Goods and Services Tax Will Pep up GDP growth by 2%

Tax experts on Sunday said there will be a uniform andone-nation-one-tax in the form of Goods and Services Tax(GST) proposed from April 1. The experts guided CAs on GST during a regional tax conference held here jointly by the Nashik and Jalgaon branches of TheInstitute of Chartered Accountants of India (ICAI).
Bimal Jain, chairman, Indirect Tax Committee of PHD Chamber of Commerce, said, “The present indirect taxes in India have driven business to structure and model their supply chain and systems owning to multiplicity of taxes and costs involved therein. GST will be a big game changing reform for Indian economy by developing a common Indian market and reducing the cascading effect of taxes on the cost of goods and services.” tax consultancy firms in Delhi
He added, “GST has broad-based implications, affecting the entire organisation regardless of the size and nature of the business. There will be uniform tax structure across the country based on the one-tax-one-nation formula. Currently, the total taxes on supply of goods in the country are around 27%. But the standard tax rate of GST will be 18%.” Indirect taxation in India

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Ordinance Likely To Amend Payment Of Wages.

A mid currency crunch, the government is mulling over bringing in an ordinance to amend the payment of wages Act for allowing business and industrial establishments to pay salaries through Cheques or by electronic modes.
“The government may bring an ordinance to amend Payment of Wage Act, 1936, to nudge employers of certain industries to make payment through electronic modes and cheques,” a source said Direct foreign investment in India.
The source further said, “The bill for the purpose was tabled in the Lok Sabha on December 15, 2016. It can be pushed for passage in the Budget session next year. Thus, instead of waiting for two more months, the government can issue the ordinance and later it will be passed in Parliament.” Standard practice is, government brings ordinance to amend laws for immediate implementation of new rules. An ordinance is valid for six months only. Government is required to get it passed in Parliament within that period in accounting outsourcing companies in India.
The Payment of Wages (Amendment) Bill, 2016, seeks to amend Section 6 of the principal Act to enable employers pay wages to their employees through cheques or by crediting it to their bank accounts electronically. The Bill was introduced by Labour Minister Bandaru Dattatreya amid din over demonetisation issue.
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Royalty Paid to AE Wasn't Capital Exp, as It Was Paid for Use of Trademark and Not for Its Acquisition

Where assessee-company made payment of royalty to its AE for mere use of trademark, that too by means of non-exclusive licence, it was to be allowed as revenue expenditure while determining ALP.
Assessee-company (GKN Driveline (India) Ltd.) was engaged in business of manufacture and sale of Constant Velocity Joints (CVJ) – During relevant year, assessee made payment of royalty to AE for use of its trademark in respect of manufactured products – In transfer pricing proceedings, TPO taking a view that payment in question was capital in nature, disallowed same and made certain addition to assessee’s ALP – It was noted that Tribunal in assessee’s own case relating to earlier assessment year, opined that assessee did not acquire any ownership right in trademarks by paying amount of royalty – It was further noticed that royalty was paid simply for use of trademarks, and that too tax consultancy firms in delhi, by means of a non-exclusive license – Tribunal had thus concluded that royalty payment was to be allowed as revenue expenditure – Whether in absence of any change in circumstances, following aforesaid order of Tribunal, impugned disallowance was to be deleted – Held, yes [In favour of assessee].
Companies With More Than 10 Times of Turnover of Assessee Couldn’t be Selected as Comparables.

Assessee-company (Acusis Software India (P.) Ltd.) was rendering ITES to its AE – Whether companies providing KPO services cannot be considered as comparable – Held, yes – Whether companies having turnover in excess of 10 times of turnover of assessee could not be selected as comparable – Held, yes – Whether companies having employees’ cost of less than 25 per cent were incomparable to assessee – Held, yes [Partly in favour of assessee] in chartered accountant firms in mumbai.

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Demonetisation to help revive affordable housing segment

Demonetisation will help revive the latent demand in the housing sector as people now hope to buy houses in transparent deals, said Sriram Kalyanaraman, managing director & CEO, National Housing Bank. In an exclusive chat with ET’s Saikat Das, Kalyanaraman said some segments of the housing sector will especially benefit from it as prices may correct 15-20% with adequate supplies. Edited excerpts…
Will demonetisation drive demand in the housing sector in direct foreign investment in India?
Housing finance is a long term requirement, and the demonetisation exercise will have a long term impact as it will benefit both consumers and the industry. Most of the housing finance players have put in place systems for e-payments and e-receipts in chartered accountant firms in mumbai. Demonetisation will further improve the use of e-transactions and reduce cash dealings. It will result in greater transparency in property contracts, which will also bring in greater professionalism in the industry. As a result, the latent demand, particularly in the affordable segment is expected to revive, thereby increasing sales.
But will home prices come down?
We expect housing prices to correct by 15-20% in some segments. But we do not think it is a gloom and doom scenario. On the contrary, with a dip in prices and higher transparency in dealings, demand will pick up in the medium to long term.

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