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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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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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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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.
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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Attention of Authorized Persons is invited to the A.P. (DIR Series) Circular No. 16 dated November 9, 2016 giving certain exemptions to foreign tourists visiting India. In super session of instructions issued therein, it has been decided that foreign citizens (i.e. foreign passport holders) can exchange foreign exchange for Indian currency notes up to a limit of Rs. 5000/- per week till December 15, 2016 subject to the tenderer submitting a self-declaration that this facility has not been availed of during the week in accounting outsourcing companies in India. The Authorized Person shall keep the passport details and the above declaration on record. Authorized Person may also ensure that the total value of such exchange to Indian currency notes does not exceed Rs. 5000/- during the week.
2. The Instruction in respect of issue of prepaid instruments by Authorized Dealer Category I Bank shall continue in indirect taxation in India.
3. Authorised Persons may follow the above instructions and bring the contents of this circular to the notice of their constituents.
4. The directions contained in this circular have been issued under section 10(4) and section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.
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