Get recommendation from boss to serve abroad: CBDT to taxmen

The Finance Ministry has introduced new rules for sending Income Tax officers to newly created overseas units like in the US and the UK that include asking aspirants to get testimonials from bosses and write a note on how they can help maximise revenue from this front.

The ministry had announced creation of eight new Income Tax Overseas Units (ITOUs) in 2011 as part of its multi-pronged strategy to tackle the menace of blackmoney.

It had designated I-T officers to go as First Secretaries in these countries to "maintain effective coordination and liaison between Indian tax authorities and the tax authorities of countries concerned."

"The new terms and conditions for posting the tax officers were recently finalised after meetings between the Ministry of External Affairs (MEA) and Finance Ministry in coordination with the Central Board of Direct Taxes (CBDT)," top sources said.

According to the freshly revised selection criteria, the aspiring candidate, with a mandatory 15 years of service in the Indian Revenue Service (IRS), will be evaluated for ten marks each in getting recommendations from two serving officers who were "immediate supervisory authority" anytime during their service and for writing a 1,000 word statement of purpose describing how his "knowledge, experience and commitment" will help in bolstering tax administration in the international context.

The applicant, who will have to go through a final interview by a panel headed by Central Board of Direct Taxes (CBDT) chairperson, will be judged for a maximum of 40 marks for providing a brief bio-data of five of their "outstanding work" in the field of revenue administration.

The interview will carry 35 marks.

While two ITOUs are already there in Mauritius and Singapore, the eight new are all set to be fully operational at Indian missions in Cyprus, France, Germany, Netherlands, Japan, UAE, UK and USA.

"The new rules will however be applicable for postings of officials to all the ten ITOUs," the sources said.

During the meetings held between the MEA and Finance Ministry over a year on these new eight postings, it was decided that unlike earlier, the seniority of I-T officials should be kept at a minimum of 15 years considering the nature of job and "seniority of officers from other services" in Indian missions abroad.

"The new postings, after finishing these procedures, should take place by August after the CBDT will obtain approval of the Finance Minister on the final list of selected candidates, consult the MEA and take final approval by the Appointments Committee of Cabinet (ACC)," the sources said.

The aspiring I-T officials will also be rated on their investigation skills and acumen to handle international financial transactions, overall awareness in respect of financial scenario and methods used for tax avoidance.

The other areas on which these senior officers will be rated include awareness of international financial protocols, issues pertaining to transfer pricing, working knowledge of tax treaties like the Double Taxation Avoidance Agreement (DTAA) and Tax Information Exchange Agreements (TIEAs) and other tax dispute resolution mechanisms like Advance Pricing Agreement (APAs) and Mutual Agreement Procedure (MAP).

The posting of an officer in these ITOUs is for a period of three years.

Fourteen new ITOUs in different countries are now in the pipeline.

The government's intention to increase their numbers is drawn from the idea that these units could obtain hassle-free information on tax and financial data of investments made by individuals and institutions in these countries and facilitate exchange of data on legal investment or routing of money in India and vice-versa.

Order to predeposit tax can’t be challenged in writ if it considered the capacity of assessee to pay

ST : Where Prima facie case, balance of convenience, undue hardship and financial burden have been duly considered by appellate authority while making order of pre-deposit, such an order cannot be challenged in writ petition

If nexus between sale and purchase of land is established, addition for unexplained investment is un

IT: Where land was purchased with consideration received from sale of another land, amount could not be added as unexplained investments

Recovery proceedings before Debt Recovery Tribunal are no bar to invoke winding up proceedings

CL : Invocation of recovery proceedings under Recovery Act before Debt Recovery Tribunal by creditors of company would not be a bar to initiate winding up proceedings under Companies Act

No tax on sale of cruise tickets by foreign co. if cruise activities has no business connection with

IT/ILT : Where assessee foreign company was not taxed in respect of sale proceeds of cruise tickets remitted to it by Indian agent in previous assessment years, it was not taxable in current year also

Net direct tax collections rise 6.44% in April-May period

Ushering the new fiscal on a positive note, net direct tax collections in April-May period rose by 6.44 per cent at Rs 37,596 crore compared to the same period last fiscal.

Net direct tax collections, which are gross collections minus refunds, stood at Rs 35,322 crore in April-May period of 2012-13 fiscal.

Gross direct tax collections rose by 21.10 per cent to Rs 63,252 crore in April-May period of 2013-14 fiscal year from a year-ago period, an official statement said.

During April-May period, the gross collection of corporate taxes went up by 14.91 per cent to Rs 27,957 crore. The same stood at Rs 24,329 crore in the corresponding period last fiscal.

The gross collection in personal income tax was up by 27.29 per cent to Rs 34,805 crore compared to Rs 27,343 crore in the same period last fiscal year.

Besides, collection from wealth tax stood at Rs 28 crore, up from Rs 15 crore collected in April-May 2012-13.

Growth in Securities Transaction Tax (STT) was (-) 14.63 per cent. Collection stood at Rs 461 crore in April-May period of this fiscal compared to Rs 540 crore in the same period last fiscal.

The government has fixed a direct tax collection target of Rs 6.68 lakh crore for the current fiscal, up from 5.65 lakh crore in the previous fiscal

Subsidiary Co. couldn’t be treated as conduit of its foreign holding Co. without giving it a chance

IT/ILT : Advertisement revenue could not be taxed in assessee-parent company's hands, holding its subsidiary, which undertook sale of advertisement airtime in India to be a conduit

Fees for due diligence of target entities to assist in their main stream businesses is allowable as

IT : Where assessee in course of providing support services to its foreign based parent company engaged in hotel business, availed services of a Singapore based company for carrying out due diligence and risk analysis of target hotels, payments made in respect of said services was to be allowed as business expenditure

Rupee Hits All-Time Low Of 57.54 Against Dollar

The rupee breached its all-time low of 57.32 against dollar in early trade on Monday. It traded at 57.52 against Friday's close of 57.06/07 as of 09.28 a.m. The Indian currency had earlier hit a low of 57.54 against the greenback.



The rupee has been falling sharply since the start of May on concerns that the U.S. Fed may withdraw its monetary stimulus and the Reserve Bank of India may not cut rates as much as previously anticipated.



The rupee has been falling for five straight weeks, taking its losses since the start of May to 5.71 percent, to make it among the worst performing currencies in Asia during this period. (Read: Why the rupee is sliding against the dollar)



Stock markets opened with strong gains, with the Sensex rising over 150 points. However, the sharp fall in the rupee weighed on sentiments.



Deven Choksey, managing director of KR Choksey said given the negative trend on rupee and crude oil, equities too will have negative bias. In such a situation, the Nifty may trend down to 5,750-5,700 levels, he added.



"The depreciation in the rupee is counterproductive for markets. It affects current account deficit and all the consequential issues that follow including the RBI policy. It lead to higher cost of production, higher commodity prices, high inflation and is suicidal for the economy," Mr Choksey added. (Read: How a weak rupee impacts you)



The Sensex traded 72 points higher at 19,501, while the Nifty traded at 5,905, up 24 points as of 09.29 a.m.



Bearish bets on the rupee have increased to their largest since late June 2012 as continuing worries about the country's current account deficit weighed on sentiment and as the unit came under pressure from importers' dollar demand.



Traders said foreign banks were seen adding long dollar positions based on their non-deliverable forward-related bets on Friday. There was also continued dollar buying from oil refiners, the largest buyers of dollars in the domestic currency market.

Source:-profit.ndtv.com

Service Production Index Likely To Be Delayed

New Delhi: The wait for a comprehensive index of service production is expected to get longer, till the long-overdue goods and services tax (GST) system overhauls data collection by tax authorities.

The services production index, analogous to the Index of Industrial Production (IIP) and to be brought out by the statistics ministry, requires tax data to be classified by entity.

This needs the Central Board of Excise and Customs (CBEC) to modify its information systems. Officials said this will happen only after GST is rolled out.

The services sector contributes about 60% to national income, but there is no survey tracking trends in service sectors such as trade, hotels, communications, and banking and finance.

Recently, the ministry of statistics and programme implementation developed a mechanism to service industries, the feasibility of which is being tested through pilots, said T.C.A. Anant, chief statistician of India.

“Given the importance of the sector, its diverse nature and lack of data on an annual basis, the need for compiling the index of service production with an appropriate periodicity was felt for a long time,” the ministry says in a note on its website.

But data for a comprehensive index covering the diverse sector will be available only when the much-awaited GST is in place, which is now likely to happen only from 2015-16 because of persisting differences between the Union and state governments.

The GST system aims to create a unified national market for goods and services by removing all barriers to their movement across states. Prime Minister Manmohan Singh, during a recent trip to Japan said GST may not be launched during the current term of this government, scheduled to end in May next year.

“For railways, postal services, air travel and banking, we have been able to come out with service production indices, but there are other areas such as trading, health, hospitality and private freight transportation where it can’t be done without a system to collect data on output,” said an official in the statistics ministry, who did not want to be identified.

“We have been discussing this with the CBEC for some time for them to collect this output data classified by entities,” said the official.

“The CBEC has informed them (the statistics ministry) that the classification of services is possible only once GST is rolled out,” said a finance ministry official, also speaking on condition of anonymity. “Once GST comes in, we can have a classification of services as well, as we have for goods now. Under it, there will be a common tariff for both goods and services.”

Anant said the current approach to the index of service production is sectoral and not entities-based, which leaves out sectors where private providers of services dominate.

An experimental index of services production has been brought out since 2005-06 for railways, air transport, banking and postal services following the recommendations of a technical advisory committee under Jawaharlal Nehru University professor C.P. Chandrashekhar.

Source:-www.livemint.com

Gujarat Has Over 50% Of Ppp Projects In Ports Sector: Report

8-Jun-2013

AHMEDABAD: Gujarat accounts for the lion's share of over 50 per cent in value terms of the total number of completed projects in the ports sector under the public-private partnership (PPP) model, industry body Associated Chambers of Commerce and Industry of India ( Assocham) said on Friday.





Of the total 31 PPP port projects worth over Rs 24,700 crore under operation in India as of April 30, 2013, Gujarat accounts for 12 completed PPP projects worth over Rs 12,400 crore, according to the study titled 'Port Developments in India'.

Besides, Gujarat ranks sixth with four PPP-based port projects worth over Rs 1,650 crore under construction. With a share of over 53 per cent, Gujarat also tops the list of nine maritime states as it could create almost double the capacity at the minor ports than was envisaged in the 11th plan.



Minor ports in Gujarat had a capacity of 182 million tonnes as on March 31, 2007, and the state was expected to add about 56 million tonnes capacity during 2007-12, while the state had realized capacity addition to about 283.6 million tonnes up to March 31, 2011.



Out of the total 881 PPP projects worth over Rs 5.4 lakh crore taken up under the PPP model across India, 62 projects in the port sector worth over Rs 82,000 crore are in different stages of implementation.



Odisha ranks second with a share of about 17 per cent followed by Maharashtra where five projects worth over Rs 3,700 crore are under operation. Andhra Pradesh and Tamil Nadu each with three projects under operation and have garnered a share between 5-6 per cent followed by Kerala at 2.8 per cent.

Source:-articles.timesofindia.indiatimes.com

Smart things to know about funding students abroad

1) The students who go abroad for studies are treated as non-resident Indians (NRIs) from the day they leave the country. All the provisions that apply to NRIs under the Foreign Exchange Management Act ( FEMA) are also valid for them.

2) The limitation for remittance of fee is $100,000 per year, or the actual fee, based on documentary proof from the institution where the student is enrolled, whichever is higher.

3) The remittance for living expenses up to $2,00,000 can be sent through a bank, after executing a self-declaration form by close relatives.

4) The bank may ask for a CA certificate or income tax returns, depending on the length of the client's relationship with it, as well as its internal processes and due diligence.

5) The foreign exchange that can be carried by such students while travelling abroad is not subject to limits, but declaration at the Immigration and Customs counters for amount exceeding $10,000 is mandatory.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.

Bank loans and EMIs may not be the correct way to build assets

Shravan Sharma is 35 years old with two children and a wife, who is a homemaker. He is currently paying EMIs for his car, home and personal loans. However, he is not too worried because he earns a good salary and is confident of being gainfully employed given his professional qualification. He thinks that the funding from banks is a good way to increase his asset base. He also believes that EMIs result in compulsory savings and that he may not do so if he did not have a loan. What precautions should Sharma take given his penchant for loans?

To begin with, Shravan Sharma needs to understand that his portfolio may run the risk of being too skewed, with a high proportion in property. If a large chunk of the income is used to pay the EMIs for a home loan, he will be left with little to build any other asset and might be compromising his need for liquidity. He should ensure that at least 30% of his investments are in other assets that are liquid, easy to access, and flexible. He should build them as a priority.

Second, Sharma runs the risk of default if his EMIs comprise more than 50% of his income. In a household with young children, the mandatory needs are likely to go up as the fees for private schools, coaching, extra-curricular activities, cost of outings and travel are likely to increase. Sharma should enhance his savings to provide for these needs, and to do so, he needs a higher monthly surplus. The existing EMIs will hurt this objective.

Third, loans will always have come for a higher cost than the return from the assets, except in the case of property, which may appreciate at a higher rate. However, a self-occupied home is not an earning asset, while those like a car depreciate in value. Therefore, Sharma's logic about using loans to build assets may be flawed. He may be substituting his inability to save regularly with costly loans, which reduce his wealth and flexibility to build assets.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.

'High Import Duty May Spur Gold Smuggling'

KOCHI: Gold merchants' association in the state is of the view that the recent increase in the import duty of gold from 2% to 8% will spur smuggling activities.



"We are of the opinion that most of the non-banking financial companies and commercial banks are responsible for the sizeable chunk of bulk imports," said B Girirajan, president of All Kerala Gold and Silver Merchants Association (AKGSMA).



According to him, traditional jewellers buy back the ornaments, coins and bars sold by them, but the banks and agencies don't follow that. "A direct result of this is that every time, these agencies will have to resort to fresh imports of the precious metal to replenish their stocks," he noted.



Studies conducted by AKGSMA showed that the demand for jewellery remained stable or even declined over the last few years. However, our country has become one of the largest exporters of handcrafted gold jewellery over the years and this export requirement is fully met by imports, Girirajan said.



"Any restriction on imports will adversely impact our jewellery exports. This is the third such hike in the last two years. This is a clear indication that the earlier hikes have not yielded the desired results," he added.Sour

Source:-timesofindia.indiatimes.com

Export Of Soybean Meal Continues To Fall

8-Jun-2013

It may not sound well for the Soya growers in the country, particular in Madhya Pradesh, which is a major contributing state on the front in the country. The export during May 2013 was 0.97 lac ton as compared to 1.39 lac ton in the same period of previous year showing a decrease of 29.74%. Overall demand of soybean meal is poor all across the world. This information was given by the spokesperson & coordinator of Soybean Processors Association of India (SOPA), Rajesh Agrawal.SOPA's office is located in Indore.







On a financial year basis, the export during April 2013 to May 2013 has been 1.98 lac ton as compared to 4.75 lac ton in the same period of previous year showing a decrease of 58.33%, added he.



During current oil year, (October-September), total exports during October 2012 to May, 2013 are 27.95 lac ton as against 32.61 lac ton last year, showing a decrease by 14.29%.



If one has a look on the country-wise/port-wise export of soybean meal during the period under observation, then also the same findings will come. The data has been collected and compiled by Soybean Processors Association of India (SOPA), based on the information received from the members, Port authorities and other agencies. However, the data does not include exports to Pakistan, Nepal and Bangladesh by rail or even by road.

Source:-timesofindia.indiatimes.com