India finds a new way to tax Google, Facebook

Source: The Economic Times, Dec 17, 2018

New Delhi: India may be pushing Internet firms such as Facebook and Google to store data locally not just to safeguard critical data of its citizens but also to ensure due taxes are paid by these digital firms for services including advertisements sold to local clients, a senior official told ET.

The government’s push for internet companies to host data of Indian users in local servers is also due to concerns that they deliver services mostly from overseas, outside India’s tax jurisdiction.

“Who can the government tax? Any entity with presence here.  Read the rest of this entry »

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Playing safe, govt may defer rollout of new GST returns system

Source: The Hindu Business Line, Dec 02, 2018

Mumbai: In what could well turn into a pre-poll relief for traders and businesses, the Centre may opt to delay the rollout of the new format of simplified monthly returns for the Goods and Services Tax (GST).

“This will have to be a decision by the GST Council. But given that businesses have struggled significantly with GST returns in the past, it may not be right to upset them, with State elections and more importantly, general elections just around the corner,” said two persons familiar with the development.

Current system to continue

This could potentially mean that taxpayers under GST are likely to be allowed to continue with the current system of filing GSTR-3B returns until May or June next year. A final decision on the issue will be taken by the GST Council. Read the rest of this entry »

₹29,088-crore indirect tax evasion detected in April-October period

Source: The Hindu Business Line, Nov 21, 2018

New Delhi: The investigation arm of the Finance Ministry has detected tax evasion of ₹29,088 crore in 1,835 cases during April-October period of the current financial year, a senior official said Wednesday.

Of this, the Directorate-General of GST Intelligence (DGGI), the enforcement agency for checking indirect tax evasion, has detected evasion of GST of ₹4,562 crore in 571 cases.

However, the bulk of the evasion was detected in case of service tax. The total number of cases where service tax was evaded stood at 1,145 involving ₹22,973 crore.

In case of central excise duty, the DGGI detected 119 cases where tax evaded was worth ₹1,553 crore. Read the rest of this entry »

Back offices face 18% GST for services to MNCs

Source: The Economic Times, Nov 18, 2018

MUMBAI: Are India-based back offices of multinationals merely brokers? And, are Indian companies providing services to foreign firms just commission agents? Going by the tax department’s definition, it appears that they are so — and not exporters.

Several back offices at multinationals now face 18% Goods and Services Tax (GST) liabilities after a tax body said they are merely intermediaries. Even Indian companies providing offshore support services to multinationals are liable to pay the 18% GST levy on their revenues. Read the rest of this entry »

Centre, states apportion Rs 29,000 cr IGST in September

Source: The Economic Times, Sept. 30, 2018

As much as Rs 29,000 crore lying in the Integrated GST or IGST pool has been apportioned between the Centre and states in the month of September.

The central government will get about Rs 14,500 crore and the remaining would be distributed among the states in proportion to the revenue collection in September, an official told PTI.

The apportionment would help improve indirect tax position of both the Centre and states.

This is the fourth time that IGST funds have been dividend between the Centre and states.

As much as Rs 12,000 crore was settled between them in August, Rs 50,000 crore in June and Rs 35,000 crore in February this year.

A policy decision has been taken that when some substantial amount accrues to IGST pool it should be apportioned so that funds do not lie idle with the Centre, the official said, adding Rs 29,000 crore has been apportioned this month.

Read the rest of this entry »

E commerce companies set to collect tax from sellers

Source: The Economic Times, Sept 13, 2018

Ecommerce platforms such as Amazon, Flipkart, and Myntra will from October 1have to withhold tax from payments made to suppliers.

The tax deducted at source (TDS) and tax collected at source (TCS) provisions under the goods and services tax (GST) have been notified to be effective from October 1. The GST Council had deferred the implementation of the provision first for a year from July 1, 2017 till June 30, 2018. It was again put off till September 30 after industry expressed concerns on increased compliance burden.

Read the rest of this entry »

Tax havens account for highest increase in FDI inflows

Source: The Economic Times, Jul 25, 2018

Foreign direct investment (FDI) inflows from tax havens such as Cayman Islands, the Bahamas and Liechtenstein have jumped leaps and bounds in the last one year, official data showed.

While FDI from Cayman Islands sharply rose 1,640% on year in 2017-18, in absolute terms the FDI inflow was $1.2 billion from $71 million in 2016-17, as per a Lok Sabha question answered by the commerce and industry ministry on Monday.

Bahamas showed a 475% rise in foreign inflows but the increase was from $0.24 million to $1.38 million in FY18. For Liechtenstein, the 392% increase was from $2.04 million in FY17 to $10.04 million last fiscal.

Overall, there was a 3.17% rise in FDI inflows into India at $44.8 billion in FY18 from $43.4 billion in FY17.

The FDI increase from Mauritius was 1.3% to $15.9 billion from $15.7 billion in FY17.

“Though Luxembourg, Switzerland and Ireland are not strictly tax havens, their favourable tax environment has given them this reputation,” said an expert on investment issues.

Luxembourg showed a 54.69% rise in FDI but that from Switzerland was flat at $514 million.