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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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 ofindustryThe 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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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.
“Digitisation is the basis for credit and credit becomes the attractive reason for businesses to enter the formal economy,” he said, adding that ‘India’s formal economy is small and only 7per cent of the India’s employment is in the formal sector.

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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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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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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.
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.

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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GST Could Trip Make in India For Smarphones

India’s success in making firms such as Samsung, Xiaomi, and Micromax to locally produce phones could become a cropper, once the Goods and Services Tax (GST) comes into effect, as the new expats taxation regime could neutralise the cost benefits to make these phones in India in taxation services for expatriates
Since the last two years, India has been able to attract 40 global smartphone makers in the country, after it tweaked norms that made cheaper to make phones in India and sell it to the billion strong mobile subscribers. At the same time, government has been able to scale investments in electronic manufacturing over ten-fold to Rs 1.24 lakh crore from Rs 11,000 crore two years ago.
“There is a near 10% tax arbitrage for manufacturing mobile phones in India in the current tax regime. However, once GST is implemented, it will be different. We hope that the Government will try and protect the arbitrage in some manner,” said Prateek Jain, Partner and National Leader – Indirect Tax at PwC India.
A IIMB Counterpoint report released in November 2016 estimates that 180 million mobile phones to be manufactured in India in 2016, which is nearly a 125% growth over the year-ago period. This has also helped in creating nearly 50000 jobs in expatriates taxation.

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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.

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.

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Most deposited Rs 2 Lakh or More, Some Used One PAN For 20 Accounts: GOVT

REVENUE Secretary Hasmukh Adhia Thursday said deposits of Rs 2 lakh or more formed a sizeable chunk of the demonetised currency that found their way into bank accounts immediately after the November 8 announcement on withdrawal of Rs 500 and Rs 1,000 notes wholly owned subsidiary company in India

Asked if deposits of less than Rs 2 lakh constituted the majority deposits in accounts, Adhia said: “Na na, woh zyaada nahi hai. Rs 2 lakh se upar wale mein hi main hua hai. (No, that’s not big. The bulk of deposits were those above Rs 2 lakh.) And people thought Rs 2.5 lakh tak safe hai, so most of them have done Rs 2.25 lakh (deposits) in 10-15 accounts. We have cases in which 20 accounts are connected to a single PAN.” Company formation in India

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E- Commerce firms like flipkart and snapdeal to deduct TCS under GST

E-commerce operators like Flipkart and Snapdeal will have to deduct TCSBSE -1.02 % (tax collected at source) while making payments to their suppliers, according to the new model GST law, which has done away with the definition of ‘aggregator’.
Explaining the changes in the provision, experts said the proposal will increase the compliance burden on e-commerce operators as they will have to deduct 2 per cent TCS and deposit it with the government.
The measure, Nangia & Co Director Rajat Mohan said, will not increase the incidence of indirect taxation in India on consumers as the supplier will get tax credit for the TCS. The model GST law provides for 1 per cent TCS to be deducted by the E-commerce operators.
According to experts, this would mean that a similar amount will have to be levied on inter-state movement of goods, taking the total TCS deduction to 2 per cent although burden on consumers will not increase.
Mohan further said in case of return of goods by the consumer, the e-commerce companies will not have to deduct TCS as there is no actual sale.
The draft model GST law does not provide any definition of businesses would be covered under the term.
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