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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India's Growth Rate of More Than 7% is The Strongest Among 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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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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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

Ordinance Likely To Amend Payment Of Wages Act.

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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More Online Services May Face Google Tax

The government is likely to expand the scope of the equalisation levy, the so-called “Google tax”, to bring more digital transactions into the tax net in the upcoming budget to curb tax avoidance by multinational chartered accountant firms in mumbai. Online sales of goods and services; downloading of software, songs, movies and books; and online consumption of news are among the services that the government may consider for the levy.
“Internationally the trend is to bring more digital transactions into the tax net as multinational companies end up avoiding taxes. It was just a beginning last year when we introduced a six per cent tax on online advertisement,” said an official. The government has imposed a six per cent levy for business-to-business transactions on income accruing to foreign e-commerce companies from India for specified services like online advertisement. It has been imposed on non-resident companies without a permanent establishment for incomes exceeding Rs.1 lakh a year.
The government has earned Rs.100 crore in revenue on account of the equalisation levy so far. Companies like Facebook, Yahoo, Twitter and Google earn significant revenues from India from local advertisers. A committee set up by the Central Board of Direct Taxes to examine indirect taxation in India of e-commerce had recommended an equalisation levy of 6-8 per cent on 13 broad services based on the OECD’s Base Erosion and Profit Shifting guidelines.
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India, Singapore Revise Tax Treaty

The government signed a pact with its Singapore counterpart on 30th Dec, 2016, amending their decade-old tax treaty, gaining indirect taxation in India rights over capital gains. This is the third double taxation avoidance agreement (DTAA) amended so far this financial year with a zero or low tax jurisdiction. The other two were with Mauritius and Cyprus. According to tax consultants in India, Mauritius would be the most attractive source of investments into India for debt funds and Singapore for equity investments. Mirroring the revised IndiaMauritius DTAA, the government has some grandfathering provisions (having the old rule continuing to apply for some existing situations, with the new one for all future cases) and a two-year transition benefit to investments from Singapore. The revised pact will take effect from April 1, 2017. For two years from that date, capital gains tax will be imposed at 50 per cent of the prevailing domestic rate. The short-term rate is 15 per cent at present. The full rate will apply from April 1, 2019.

“2016 has been historic, with all three tax treaties amended… The treaties were misused to round-trip domestic black money and bring it back to India through these routes. There has been a significant battle by India against black money. It is a happy coincidence that by amending these treaties, there has been a burial to the black money route that existed,” said Finance Minister Arun Jaitley on the revised DTAA. Mauritius and Singapore are the top two sources for direct foreign investment in India, about half of the total direct flow. Total FDI from Mauritius over the past decade and a half is USD 95.9 billion. That from Singapore is USD 45.8 bn The concessional rate of 50 per cent would be subject to fulfilment of conditions of Limitation of Benefit (LOB), an expenditure of at least Rs. 50 lakh in Singapore in the previous financial year. It is Rs.27 lakh in the case of Mauritius.
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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.

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My Notes Ban Speech Will Cause Earthquake, Claims Rahul Gandhi: 10 Facts

Tens of thousands of villages will soon be equipped with card-swiping machines to boost cashless payments, the finance minister said on Thursday, a month after the government banned high-value banknotes.

Prime Minister Narendra Modi unleashed chaos with his shock announcement last month that all Rs500 and Rs1,000 ($7.30, $14.60) notes—some 85% of all bills in circulation—would cease to be legal tender.

The move triggered a chronic shortage of cash with people forming long queues outside banks across the country for hours to get rid of their old notes. Cash accounts for 90% of transactions in India where millions rely heavily on notes for their daily transactions.

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New Income Disclosure Scheme: Do or Die For Black Money Holders.

After PM Modi's surgical strike on black money, cases of cash crunch, money laundering, and illegal exchange of discontinued notes started to surface which led to economic fiasco. So, after analyzing the recent developments, a new scheme Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY) for disclosure of unaccounted money has made its way through Lok Sabha . Pradhan Mantri Garib Kalyan Yojana, 2016 gives an opportunity to all the black money hoarders to come out clean by declaring their undisclosed income and paying heavy taxes and penalty. The provisions of scheme require declarations to pay-

Which amounts to approximately 50 % tax of the undisclosed income. Apart from paying tax and penalty, the declarants will also be required to deposit 25% of the amount disclosed in the Pradhan Mantri Garib Kalyan Yojana, which will be interest free deposits locked in for a period of 4 years. After analysing the provisions of the new scheme and the amendments made in the existing provisions of the Income Tax Law, a person holding black money is left with three options- (a)    Declaring income under PMGKY, by filling a declaration form attracting a tax of 50% (30% tax, 33% surcharge on tax, 10% penalty) and depositing an additional 25% of income in the Pradhan Mantri Garib Kalyan Yojana, 2016 (which is refundable after 4 years) 

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Demonetisation: Currency Recall Could Cost India a Massive Rs 1.28 lakh crore

The transaction cost of the government’s demonetisation exercise is projected to be about Rs 1.28 lakh crore during the 50-day window till December 30, 2016, according to Centre for Monitoring Indian Economy (CMIE) estimates. According to Mahesh Vyas, the managing director and chief economist of CMIE, the exercise can only be considered worth if the government is able to unearth unaccounted cash worth at least the transaction cost. “If the government succeeds in unearthing even Rs.4 trillion unaccounted cash, then the transaction cost of this exercise would be about 26 per cent. It would be over 43 per cent if the unearthed cash is Rs.3 trillion,” Vyas said in his research note.

Though welcomed by many across the country, the government’s decision to demonetise higher currencies has left many in the lurch and utter state of confusion. The study also warned the impact of the rudimentary step could impact the economy over a longer period.

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