Income tax department to name and shame all crorepatis

The government in the year 2015 released 67 names of the tax defaulters list. These names were released in 3 installments under the “name and shame policy. The source of income for majority of the individuals and entities in the list is through jewelry, diamonds and gold. The first list released was released in March 2015 with 18 names. The total amount these members owe to the government is 500 crore. The second list was released month later i.e. April 2015 with 31 names. The tax skimmed by these defaulters summed up to 1500 crore. The final list was released in December 2015 with 18 names and the due amount that has to be paid is 1,150 crore. This list is compiled by tax department and released by the finance ministry.

The list was published in leading national newspapers along with details regarding source of income, PAN number, and last known address and assessment years. The tax department has issued the notice to the defaulters to pay their taxes immediately. The department also welcomes public to come with any information regarding the defaulters. The public notice also points to the fact that the individuals or entities in the defaulters list are not “traceable” and do not have enough assets listed for recovery.Gujarat stands as the state with highest number of tax evaders. In the list of 67 ,24 are from Gujarat, followed by Gujarat Maharashtra and Telangana have 15 defaulters each.The first list for the year 2016 is released with 20 tax defaulter off which 3 are from Gujarat.

Lamborghini buyers will be watched over by Tax authorities

The Indian government has been struggling with small taxpaying population to meet its fiscal deficit. In a bid to face this herculean task the government has decided to try every hack to get hold of tax evaders.Tax authorities from now on will be watching over luxury car buyers like the Lamborghini. The company has rolled out its $580,000 (nearly INR 4 crore) V12 model for sale. Authorities will check tax declarations with the buyers list of this ultra luxurious car.The tax data released recently shows the deep rooted tax evasion in India. Only six people earning more than 50 crore according to the documents coming as a stark contrast to the 2,100 high wealth Indians whose worth exceeds 335 crore .

In line with this government has also made PAN details mandatory during high value transactions and increased vigilance over tax deduction at source (TDS). To weed out duplicate PAN government has been taking measures which narrows down tax evaders. Currently many people use multiple PANs to hide their transactions and cover tracks of their income. Finance Minister Arun Jaitley has announced all these measures will ensure that the fiscal deficit gap of 3.5 percent will narrow down to zero in the span of 5 years. To facilitate citizens to voluntarily come out and pay tax the ministry has announced tax amnesty to pay their past dues without any further investigations except for fines over the default money.

Krishi Kalyan Tax to be levied on services from June 1st

The 2016 budget had a provision which introduced the additional cess of 0.5 percent on all taxable services name krishi kalyan cess. This would be levied over the service tax and swatch bharat tax. The cess is introduced to finance and promote agricultural starting from June 1st. The revenue earned through cess can be used only for the purpose for which it was collected and not any other expenditure. Similarly swatch bharat cess is used for cleanliness activities. This cess is not over income but over all services for which service tax is applicable.
Telephone bill, internet bill, under construction property rent payment etc are some of the day-to-day services over which krishi kalyan will be levied upon.

The overall service tax stands at 15 percent. While a bill is generated for your service it will contain the split up of taxes you pay.Krishi kalian will be applicable over services which you obtain before 1st June if you have not paid the bill before the beginning of the month. So it is advisable to pay your bills before the month of June to avoid the excess tax at least for this month. Input credit of this cess will be allowed for claim. However claim against swatch bharat is not allowed.Like all taxes the cess will be a part of consolidated funds of India which will managed by the comptroller and auditor general of India.

Google office raided by income tax officers in France

Google’s Paris headquarters was raided by French Police as a follow-up of the investigation of probable tax evasion by the search giant.Google stated that it fully complies with the French laws and has paid all its taxes. In the recent times several multinational companies are accused of evading taxes by acting as subsidiaries of companies operating from tax havens.France’s central officer against corruption and tax fraud, investigators from financial prosecutors’ office and Income tax specialist took part in the raid.The investigation is verifying whether Google Ireland Ltd has a permanent base in France and is involved in fiscal obligation (corporate tax and value added tax) by not disclosing its activities in France.

The investigation began followed by the complaint received from French Tax authorities started in June of 2015 and made public during May, 2016.Google is now a part of alphabet Inc and pays only a small amount of tax in Europe. It reports as a company based in Ireland. The staff does not finalize contracts in France and the company does not pay taxes there.If Google is found guilty at the end of the investigation the company has to shell out 10 million euro as fine or half of the money laundered. France in the year 2015 has recovered 3.3 billion Euros as back taxes from just 5 multinational companies. According to the financial filling Google France made a profit of 12.2 million Euros from a revenue of 225.4 million Euros in the year 2014.

Finance ministry wants to bring foreign fund managers to India

At present foreign capital to India is managed from offshore nations like Mauritius, Singapore and London. In a bid to bring these managers to India the government has eased the norms. The Indian taxation structure has an inbuilt tax incentive system for those operating from these places. For example according to the earlier India-Mauritius tax treaty, capital gains exemption was given to funds flowing from there but with this exemption being phased out, government is expecting them to move to India. According to the phase out investments from Mauritius have to pay capital gains tax at a reduced 15 percentage from April 1, 2019 and will increase after a certain window period.

Another change to woe to them to set-up in India is modification of personal establishment norms. Based on the change the mere presence of fund manager in India will not result in PE of offshore funds and therefore will not be subject to double taxation. In the long run these moves will earn India revenue.Earlier India introduced such incentives to attract more foreign investors due to lack of companies and a weak economy. But today India has a strong workforce and knowledge wealth to attract many investors and companies. Thus it is the logical move from Indian government to phase out these incentives and raise the revenue.Initially these actions may cause turbulence to rupee value but will strengthen in the long run.

Raw sugar import tax may be reduced

With back to back droughts in India sugarcane productions is running low. India, the second largest producer of sugar in the world and a major exporter is now looking for options to control price rise in domestic market, owing to drop in crop yield.Maharashtra, the Indian states which contributes the major chunk of sugarcane crop has received poor rainfall consecutively for the past two years. The situation has turned worse to the extent, where water trains are sent to certain districts like Marathwada of Maharashtra. This will lead to severe price rise in the domestic market; to control the situation government is resorting to cut off 40 percent raw sugar import duty. This will be done in a phased manner a reduction to 20 percent from 40 percent.

However this would be last weapon for tackling the crisis. Aggressive steps of this sort would damage the central government’s goodwill among farmers. European traders union stated that they were not expecting such cuts from Indian government because as of now the country has enough stocks and it was not necessary. At present central government has ordered the state government to impose stock limits on sugar to avoid hoarding by sellers. For the past few months the price has been rising but has stayed slightly higher than the production cost. This is an issue in which the government has to maintain a delicate balance between the interest of consumers and farmers.

World Bank provides aid for rooftop solar project in India

World Bank has decided to provide $625 million aid to India for assisting its solar project. The grid connected roof top solar project will help India generate clean energy.The board also approved $5 million grant from climate Investment Fund (CIF) for clean technology and 120 million on concessional terms.According to world banks official statement the monetary help will be used to setup 400 Mega Watt of grid connected rooftop solar panels (GRVP) across India.This solar panel installation will provide clean and safe energy which will reduce GHG emissions. India lying in the tropical and subtropical region has good amount solar energy throughout the year which harnessed optimally will address both pollution issues and energy requirements.

It will be implemented by the state bank of India which will lend funds to Solar PV developers and aggregators, end-users and those who wish to invest in commercial rooftop PV systems. The loan from International bank of reconstruction and Development (IBRD) has 19.5 years grace period and maturity period of 20 years. Loan from CIF will have a grace period of 10 years and maturity of 40 years. The options available to investors under the SBI rooftop PV program are leasing third-party ownership rooftop rental and direct end user owner ship. Apart from India CIF provided South Africa with $330 million for South Africa’s solar power plant project. CIF is also working to mobilize funds held by institutional investors and help them fund climate-smart projects.

Two departments eyeing on the same plot

Bandra Kurla Complex (BKC) is a planned commercial complex in the suburbs of Mumbai. The commercial complex includes private and government offices, banks and wholesale establishments. It is a home for the Mumbai Cricket Association. The overall measure of the complex is one lakh seventy four thousand square meters.The Mumbai Metropolitan Region Development Authority and the Railway department are both waiting to occupy the BKC. The Railway department wants to build an underground terminal for the bullet train, while the Mumbai state wants to build a financial hub in the south for the IFSC (International Finance and service center). A senior official said the government wants a unit to set up an arbitration center, so once when the International Finance and Service Center building construction is over they will shift the arbitration section to the new building.

Because of the issue related to the Bandra Kurla complex, the Chief Minister of Maharashtra Devendra Fadnavis met the Railway Minister Suresh Prabhu. Later in a meeting the chief secretary met the officials of both the department take a decision regarding the issue. The officials of the railway department said that they planned the design according to the complex area, so changing the project to a different will lead back to the initial stage which is time consuming and increase the cost of the project.One of the officials said that since the railway project is an underground terminal and that the BKC is a vast area, there are possibilities to plan both the projects in the same area.

India -Mauritius tax treaty amended

Finance Minister Arun Jaitley announced that investors must pay taxes over the money earned in India. Developing countries follow FDI incentives to attract foreign individuals and companies to invest in their infrastructure and industries. This in turn will boost the economy and growth of the nation. Foreign investment was allowed in India in the year 1991 under the Foreign Exchange Management Act (FEMA). This made India as one the favorable destinations for foreign investment surpassing US and China. Mauritius holds 34 percent investments in India due to the bilateral investment treaty that exists between both the nations that exempts fund flows from capital gains tax. The government has amended this treaty to tax the capital gains, in which a transition period is given from April 1st 2017 to March 31st 2019.

During this period the capital gains will be taxed at half the domestic rate (15 percent). The original treaty was signed a decade before India opened its economy in 1981 to avoid double taxation and encourage mutual trade and investment. The amendment is to increase the tax revenue and decrease the fiscal deficit in the forthcoming years. This will temporarily affect the rupee value and cause turbulence in the share market but will benefit the nation in the long run. This will also avoid round tripping of black money through Mauritius to India. Following this amendment there is speculation regarding the tax treaty with Singapore also to be scrapped.Mauritius and Singapore account for 17 billion USD of FDI. India received 29.4 billion USD as FDI during April December 2015.

Royal bank of Scotland shuts down Indian operations

Royal bank of Scotland will shut down its operations (corporate, retail and institutional) in India in a phased manner. The bank with its headquarters in U.K was bailed out during the 2008 financial crisis and since then has sold out its non-core units in India. Several other European banks too have followed their shutdown in overseas nations due to higher capital requirements in home market. The organization decided to sell its banking business but with stringent rules in India in acquisition of bank assets has led to the shut down. The senior executive of RBS, India, stated that with further delay the value was depreciating and operational cost kept increasing and ultimately it was pushed to close.RBS India business will be wrapped up in the year end and will lead to a loss of 700 jobs.

However 13,000 jobs involved in back-end functions supporting global operations will remain with the institution. The company announced that all employees who will be affected by shut down will be communicated and treated fairly according to RBS global principles and local market practices. The decision to suspend its operation in India is a part of the global process of either selling or shut down operation in two-third of the countries it is currently present in. The chief executive of RBS Ross McEwan announced last year the operations in 38 countries will be brought down to 13.South Africa’s FirstRand and DBS were interested in buying RBS India assets but the company concluded that it was not feasible to sell entirely and thus will sell or shut down individual parts