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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Input tax credit on ATF: Aviation ministry suggest ways to compensate Airlines

Civil aviation ministry has written to the finance ministry suggesting ways to compensate airlines that will not be able to take input tax credit on aviation turbine fuel (ATF) under the Goods and Services Tax (GST). Since petroleum products including ATF are outside the GST regime for the time being, airlines will not be able utilise credit on taxes paid on ATF – a key input which comprises over 40 per cent Union civil aviation minister Ashok Gajapathi Raju said his ministry has suggested various alternatives to the finance ministry to help compensate airlines that cannot take tax consultancy firms in delhi ncr credit on ATF under the GST regime.

“The issue has to be identified, flagged and the ministry has flagged it with the finance ministry in indirect taxation in India. They have to take a call on it, what to do, how to go about it. Anywhere between 40-45per cent of the operating costs are fuel. If fuel is high taxed and that too with no set offs, they will be in trouble,” the minister said.

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GSTN Enrolment Window to Re-Open on June 1 for 15 Days

The process of migration of 84 lakh VAT, excise and service tax assesses to the GSTN had started in November, with a phased enrolment plan for each state in company formation gurgaon. The government had earlier set March 31 as the migration deadline, which was later extended to April 30, following which the government shut down the enrolment process for technical reasons.

The GSTN is conducting a pilot on GST System Software from May 2-16 with 3,200 taxpayers drawn from each State/UT and Centre as participants to test the three modules of company registration in gurgaon, Returns and Payment and to get their feedback on the live system, the statement said.  

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GST To Ease Loan Access for Millions of Firms Using Digitalised Data

The new unified indirect taxation in India system, which is scheduled to be implemented later this year, will bring in millions of unorganized businesses on one platform. This would effectively, Nilekani believes, help them get loans
Nilekani pointed out, though the country has over 60 million businesses, fewer than one million are incorporated and only a few thousand are listed. A digital trail through GST would help these firms get access to formal credit at a much lower cost, which would help more small enterprises get into the formal economy.
Nilekani headed the empowered group on information technology infrastructure on GST in chartered accountant firms in mumbai.

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Key Highlights of Budget 2017?

This is the first time in Indian history that Union Budget has been announced one month in advance. This decision is made to complete the legislative process for approval of annual spending plans and tax proposals in chartered accountant firms in mumbai before beginning of the new financial year on April 1.

	-Govt. proposes levy of surcharge of 10% for income between Rs. 50 lakhs and Rs. 1 crores
	-FM proposed no change in Exemption limit but reduces tax rate to 5% for income between 2.5 lac to 5 lacs
	-Threshold limit for audit of entities opting for presumptive indirect taxation in India under Section 44AD is increased to 2 crores. For more information visit at: http://bit.ly/2oDQOqi

How GST Will Impact The Wallet Of The Common Man.

Since the passing of the GST Constitutional Bill by the Rajya Sabha in August last year, the country has been preparing itself for the new tax regime. The new GST law is India?s biggest tax reform initiative which is expected to improve compliance levels, increase government revenue in company registration in India and create a common playing field for businesses by amalgamating a host of central and local taxes.

The present rate of service tax is 15 percent and is applicable to most of the services, excluding essential ones like cultural activities, ambulance services, and certain pilgrimages and sports events. Under Goods and Service Tax, this rate would increase to 18 percent making the services more costly. For some goods like edible oil, textiles, etc. the excise duty is nil and the VAT in several states is 5 percent. Hence, the total cost of such goods is close to 8%-9%. With GST, the cost of such goods is likely to increase and this might put a hole in the budget of a common man to wholly owned subsidiary in India.

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Budget 2017 - Push or Pull to Digital Economy

There are not many changes in current indirect taxation in India regime as GST is proposed to be rollout on 1stJuly, 2017. Hon’ble Finance Minister in today’s speech, said that IT system is on schedule for GST implementation and several teams of tax officers are also working tirelessly to give finishing touch to the Model GST law and rules and other details.

This budget has been welcomed by the whole industry. The Sensex jumped immediately after the speech was over. Digital economy budget will be a right move for the future growth of the economy. With more & more digitalization, India would have new taxpayers & better transparency in system. Every stakeholder from a small shop to a big corporate is pushed towards the digital economy. Government has pushed the digital theme in every area of the budget which is a nice effort.
Therefore, this Budget of 2017 is not a pull, but a push to Digital economy. Our government is determined to lay a beautiful foundation of digital economy in chartered accountant firms in Mumbai.

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