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.

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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.

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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.

India notifies rules for income tax computation for foreign firms

Source: The Economic Times, Jun 28, 2018

The government has notified rules for computation of income tax for foreign companies if they have place of effective management in the country. According to tax experts, it brings clarity on various aspects of the new place of effective management (POEM) regime.

Central Board of Direct Taxes (CBDT) has notified a mechanism for calculation of written-down value, and computation of brought-forward loss and unabsorbed depreciation.

It has said a company would continue to be treated as a foreign company even after it becomes resident in India. Read the rest of this entry »

Tax breather for e-commerce companies for three more months

download (1).jpgSource: The Economic Times, Jun 25, 2018

NEW DELHI: India proposes to defer the implementation of tax collection at source (TCS), a move that will give a breather to Amazon, Flipkart and other ecommerce service providers. “It has been decided to defer it for three months,” said a senior government official aware of the development.

Online platforms have to collect the tax from those selling goods on their sites while making payments for goods sold. The tax, designed as a measure to improve compliance by helping to track such transactions, was to come into effect on July 1. Ecommerce platforms, which have multiple sellers with small turnovers, have been wary of the provision, fearing an increase in the compliance burden.

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New direct tax code to benefit corporates, income tax payers

Source: LiveMint.com, May 13, 2018

New Delhi: Businesses and low-income earners will stand to gain the most from the new direct tax code that the government is working on, two people familiar with the matter said.

The proposed direct tax code, the draft of which will be ready by July, will take forward the government’s agenda of lowering corporate tax rate to 25% for all businesses and seek to give further relief to individual income tax payers.

The idea is to moderate tax rates for assessees without squandering the recent gains in revenue growth and tax base. Therefore, the proposed tax rate cuts will be incremental over a period of time as compliance and revenue collections grow. Between fiscal 2014 and fiscal 2018, income tax returns filed have risen over 80% to 68.4 million.

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Google tax may be broadened to cover non-digital MNCs

download.jpgSource: The Economic Times, May 08, 2018

MUMBAI: A budgetary proposal to tax multinationals with a substantial user base in India such as Google and Facebook is now being widened to include non-digital companies.

This could mean that any company that merely sells goods or services in India could see domestic taxes of up to 42% on their profits, said two people with direct knowledge of the matter.

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