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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