Hello and welcome to The Week that Was – TIOL's weekly news round up.
Lets have a quick look at the major policy changes, legal and tax news coverage this week.
Govt. extends olive branch to Cong for GST passage
The government has reached out to the Congress, to get support for the passage of the long-pending goods and services tax (GST) Bill in Rajya Sabha. The Congress is demanding clarification on the taxability of petroleum, alcohol, tobacco and electricity under the GST and asking whether GST would subsume the Swachh Bharat cess as well.
Will the government succeed in pushing the Constitution Amendment Bill in Rajya Sabha in the monsoon session, beginning July 18. We shall know next week.
ED arrests Jignesh Shah
Intro: Jignesh Shah has been arrested for money laundering.
The Enforcement Directorate has arrested Jignesh Shah, founder of Financial Technologies India, the company that promoted the National Spot Exchange, which was at the centre of the Rs 5000 crore money laundering scam.
Funds were allegedly siphoned off from the NSEL platform through bogus trades for money laundering through subsidiary companies. The enforcement directorate is investigating the money trail. It had filed an application for Shah's custody for non-cooperation and on the basis of new evidence.
Shah will remain in custody with the Enforcement Directorate, until Monday.
Intro: Corruption has many heads and not just bribery: CVC
Even nepotism and prejudice are forms of corruption, which is not only rampant in government but the private sector too. The Chief Vigilance Commissioner, C.V. Choudhry pointed out the need for a single code of ethics, at the conference on “Corporate Ethics and Compliance” organised by Confederation of Indian Industry. Senior corporate and government officials also participated in the event.
Black money SIT holds high level meet
The Special Investigation Team on Black Money submitted its Fifth Report to the Apex Court. In its report, it has noted that large amount of unaccounted wealth is stored and used in the form of cash. To curb use of cash it has called for putting an upper limit to cash transactions - a total ban on cash transactions above Rs. 3,00,000 and an Act be framed to declare such transactions as illegal and punishable under law. It has also suggested an upper limit of Rs 15 lakhs on cash holding.
Indian companies are most transparent
Kudos to the Indian Companies Act. Indian companies were ranked as the most transparent in terms of financial disclosures, while Chinese organisations were found to be most opaque. The report by Transparency International, covered 15 emerging market countries, including Brazil, Mexico and Russia. It underlines the need for multinationals to do more to fight corruption.
Download images - Union Jack – European Union Corporate Taxation -
Now for the news in detail
Intro: Modi is India's most widely traveled PM
The Indian Prime Minister has joined the club of the most widely travelled country heads in recent times.
As compared with other Prime Ministers, during the first 25 month period of their tenure while Manmohan Singh spent 64 days in foreign lands, Atal Bihari Vajpayee managed only 49 days. But Prime Minister Narendra Modi's latest tally is 24 foreign trips covering 42 countries over 113 days, not counting the repeat visits to US, Nepal, France, Singapore, Russia, Afghanistan and Uzbekistan.
Such aggressive diplomacy may be just what India needs to shine internationally, to boost foreign direct investment, develop bilateral relations, increase commercial cooperation and technical ties, with the world.
But one question: while focusing on India's neighbourhood, and beyond, why has the Prime Minister not tried to heal the most troublesome spot, relations with our nearest neighbour, with whom we share long borders and regular skirmishes. Is it a bureaucratic failure?
Intro: What does the word, Thulla, mean?
The Delhi High Court has asked the Delhi Chief Minister Arvind Kejriwal to explain the meaning of the word 'Thulla, which he used against policemen.
The judge observed that the word thulla is not seen in any dictionary and if the CM has used this word, he must know the meaning.
The court also exempted the Chief Minister from personal appearance before the trial court upto August 21, in a criminal defamation case filed against the Chief Minister by a constable.
The constable Ajay Kumar Taneja had claimed that the chief minister used the derogatory word thulla on a news channel to refer to corrupt policemen.
The word thulla is a derogatory colloquialism, mostly used in Delhi, to refer to a policeman engaging in wrongful practices.
But hasn't it got the CM into trouble?
Excise rules relaxed for jewellers
Intro: Excise rules for jewellers have been relaxed.
The government has relaxed the excise rules for the jewellery sector by accepting the recommendations of the High Level Committee, which was appointed, after jewellers nationwide went on a six week strike.
Under the new rules, the small scale eligibility limit has been increased and smaller jewellers with a turnover upto Rs 15 crore will be exempt from excise duty. For those with a higher turnover, excise duty will now be payable on jewellery at first sale invoice value. Repairs and alterations, not being manufacture, will not attract excise duty. Jewellers with a turnover of less than Rs 100 crore will not be audited for excise. When old jewellery, not being of gold or precious metal, is converted into new jewellery, excise duty shall only be payable on the value addition. An optional scheme may be prescribed for small jewellers who are not able to maintain separate physical stocks and records of manufactured and traded goods.
Aadhaar Act and UIDAI Notified
Intro: Aadhaar Act has been notified.
Pending the apex court decision on whether Aadhaar card can be made mandatory for delivery of government benefits, the government has paved the way for the selection of the next chairperson of the Unique Identification Authority of India, a post lying vacant since two years.
The government has notified the Aadhaar (Targeted Delivery of Financial and Other Subsidies Benefit and Services) Act, 2016.
It has also separately notified the UIDAI (Terms and Conditions of Service of Chairperson and Members) Rules, 2016, which will enable the selection of chairperson and members.
The chairperson of UIDAI shall be selected on the recommendation of a top level committee headed by the cabinet secretary.
Intro: Medical Devices must be licensed under new draft rules
To regulate and streamline the quality standards of medical devices, like pacemakers or Blood pressure machines, the Healthy Ministry has released the new draft rules, for public feedback.
The rules provide that all unapproved medical devices being currently marketing in the country will need to be licensed within six months.
Currently only 15 categories of medical devices are licensed and regulated under the Drugs and Cosmetics Act. The rest are in the unorganised sector. The rules propose quality standards for devices, including qualifications of technical staff involved in production .Medical devices may also be classified into four categories based on the risks of usage. The rules call for a division of the licensing and enforcement powers between the states and the centre, which may take on the responsibility for regulating the higher risk devices. For the first time, quality inspection and audits of low risk devices may be farmed out to third party consultants for granting licenses.
The health ministry is also working on a separate Medical devices Regulation Act.
Intro: Govt. sets 31st December as deadline for dispute resolution
The Indian government has set December 31 st as the final deadline for multinationals like Vodafone and Cairn to opt for the one time settlement of tax disputes, following the retrospective amendments to the Income Tax Act, that left the government embarrassed.
The dispute resolution scheme that opened on June 1 offered multinationals a one time settlement of tax demand with waiver of interest and penalty in return for withdrawal of pending court cases. But neither Vodafone nor Cairn have responded to the government's overture, yet. Are they waiting for a better deal?
Cairn Files For Compensation
Intro: Cairn files huge Compensation claim
British oil major Cairn Energy does not seem interested in a one time settlement of its retrospective tax dispute. It has filed for compensation of 5.6 billion dollars from the Indian government for raising an unlawful tax demand against the company and not honouring the UK-India Bilateral investment treaty.
The dispute escalated following the department's attachment of the company‘s shareholding in Cairn India, and today the interest component of the total tax demand is more than double the principal amount.
Cairn's claim for compensation, made in the international arbitration panel, seeks to cover the loss in the value of its shareholding in Cairn India, and is equal to the tax demand.
The Indian government will file its statement of defence against the compensation claim by November 2016 and hearing is expected to start in early 2017.
Intro: Finmin Revises tax scrutiny notice format
TOP BANDS-Taxpayers in metros can opt for paperless assessment soon?
The Finance Ministry has revised the format of the Income Tax department's notices to initiate the scrutiny process against an assessee. The new format, to be used across the country with immediate effect, will categorise the inquiry as "limited, complete or manual".
The new format also introduces the use of courteous language and phrases like ‘for your kind information,' and you are invited to get the inquiry done in an e-enabled and paperless manner. Yes, CBDT's new pilot project will soon permit taxpayers in metros to opt for paperless assessment (if their case falls under scrutiny).
Can taxpayers now look forward to transparency and a paperless process?
Public Wi Fi model to cut data cost
Intro: how to cut data costs and get faster Wi Fi speed?
The telecom sector may be opened up for non-telecom companies too. To cut data cost, and get faster Wi Fi speeds, the Telecom Regulatory Authority of India is keen to allow such companies to set up public Wi Fi hot spots.
The regulator has invited public views on a host of telecom issues by August 10, including regulatory hurdles, licensing restrictions, business models, interoperability between wifi networks and delicensing of mobile airwaves.
TRAI has clarified that 'public Wi-Fi networks' refers to not just the Wi-Fi hotspots created by licensed service providers at public places but also other small entities who would like to participate in common and shared Wi-Fi network for larger public use.
The report indicates that consumer tariff for data may reduce by as much as one-tenth in Wi-Fi compared to mobile data.
NSC, KVP Certificates in E-Mode
Intro: Saving Schemes certificates have become Digital
The government has digitalized the operation of its small savings schemes with effect from July 2016. It has discontinued the physical printing of National Savings Certificate and the KisanVikas Patra, which will now be available in e-mode and passbook mode.
In e-mode, the certificate may be viewed online as a non-printable form while passbook mode is the e-mode format printed or recorded manually in a passbook. A customer may opt for either mode, unless the infrastructure of the issuing branch restricts any particular mode. But having chosen the exclusive e-mode, a customer cannot revert to passbook mode.
The government has advised the preference of the e-mode over the passbook mode wherever possible.
On this note, we conclude this bulletin of The Week That Was. Thank you for watching.
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