Global News Post: Taxation

US Explores Treaty to Nail Us Tax Defaulters in India

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<st1:state w:st="on"><span style="font-family: "Trebuchet MS"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">WASHINGTON</span></st1:state><span style="font-family: "Trebuchet MS"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"> (NNN-PTI) -- The <st1:country-region w:st="on">US</st1:country-region> has said it is working on an inter-government
engagement with <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place>
and other countries to check non-compliance by American taxpayers using foreign
bank accounts in their jurisdictions.<br />
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Through these engagements with more than 50 countries, the <st1:place w:st="on"><st1:country-region w:st="on">US</st1:country-region></st1:place> is looking to implement
information reporting and withholding tax provisions, commonly known as the
Foreign Account Tax Compliance Act (FATCA).<br />
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Enacted in 2010, FATCA aims at checking non-compliance by <st1:place w:st="on"><st1:country-region w:st="on">US</st1:country-region></st1:place> taxpayers using foreign
accounts.<br />
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t requires foreign financial institutions to report to the <st1:place w:st="on"><st1:country-region w:st="on">US</st1:country-region></st1:place> tax department information about
accounts held by US taxpayers, or by foreign entities in which they hold a
substantial ownership interest.<br />
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Concerns have been raised in the past by various foreign banks and other
financial institutions about the FATCA provisions, as it is feared that they
might lead to increased compliance costs and might infringe upon the local
financial secrecy laws of the jurisdictions concerned.<br />
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An agreement with India will allow the US tax department to seek information
from the financial institutions operating in that country about their clients
who are liable to pay tax in the US.<br />
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In a statement, the US Treasury Department said last night it has engaged with
more than 50 countries and jurisdictions around the world to improve
international tax compliance and to implement FATCA provisions.<br />
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"The jurisdictions with which Treasury is working to explore options for
inter-governmental engagement include Bermuda, Brazil, the British Virgin
Islands, Chile, the Czech Republic, Gibraltar, India, Lebanon, Luxembourg,
Romania, Russia, Seychelles, Sint Maarten, Slovenia, and South Africa," it
said.<br />
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The US Treasury has already concluded pacts with the <st1:place w:st="on"><st1:country-region w:st="on">UK</st1:country-region></st1:place>. The jurisdictions with which it
is in process of finalising an agreement or it hopes to conclude negotiations
by year-end include: <st1:country-region w:st="on">France</st1:country-region>,
<st1:country-region w:st="on">Germany</st1:country-region>, <st1:country-region w:st="on">Italy</st1:country-region>, <st1:country-region w:st="on">Spain</st1:country-region>,
<st1:country-region w:st="on">Japan</st1:country-region>, <st1:country-region w:st="on">Switzerland</st1:country-region>, <st1:country-region w:st="on">Canada</st1:country-region>,
<st1:country-region w:st="on">Denmark</st1:country-region>, <st1:country-region w:st="on">Finland</st1:country-region>, <st1:city w:st="on">Guernsey</st1:city>,
<st1:country-region w:st="on">Ireland</st1:country-region>, Isle of Man, <st1:city w:st="on">Jersey</st1:city>, <st1:country-region w:st="on">Mexico</st1:country-region>,
the <st1:country-region w:st="on">Netherlands</st1:country-region>, and <st1:place w:st="on"><st1:country-region w:st="on">Norway</st1:country-region></st1:place>.<br />
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"Jurisdictions with which Treasury is actively engaged in a dialogue
towards concluding an intergovernmental agreement include: Argentina, Australia,
Belgium, the Cayman Islands, Cyprus, Estonia, Hungary, Israel, Korea,
Liechtenstein, Malaysia, Malta, New Zealand, the Slovak Republic, Singapore,
and Sweden," the Treasury said.<br />
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Negotiations with many of these jurisdictions are expected to be concluded by
the year-end, it said.<br />
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"By working cooperatively with foreign governments and financial
institutions, we are intensifying our ability to combat tax evasion while
minimizing burdens on financial institutions," Treasury Assistant
Secretary for Tax Policy Mark Mazur said. --NNN-PTI</span></div>

US Explores Treaty to Nail Us Tax Defaulters in India

WASHINGTON (NNN-PTI) -- The US has said it is working on an inter-government engagement with India and other countries to check non-c...

Tax on Almost All Services except Funeral, Gambling in India

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</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">NEW DELHI, India (NNN-Bernama) -- Funerals, betting and gambling have been exempted while almost all other services will be taxed from July 1, Press Trust of India reported. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">Under the new Service Tax regime, only 17 services are in the negative list, which means they will not be subjected to tax. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">The government has widened the definition of 'Services' to bring in more activities under the tax net. At present, 119 services that come under 'positive list' are levied. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">The 'negative list" approach was proposed in the Budget. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">Following assent of the President to the Finance Bill, the Finance Ministry said the new service tax regime will come into force from July 1. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">The Budget also hiked the service tax rate by two per cent to 12 per cent.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">Services like metered taxis, auto rickshaws, betting, gambling, lottery, entry to amusement parks, transport of goods or passengers and electricity transmission or distribution by discoms have been kept in the negative list. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">Other important services which will not attract the tax include funeral, burial, mutate services and transport of deceased. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">Coaching classes and training institutions will come under the net, though the tax will not be levied on school, university education and approved vocational courses. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">Travel in first class and in air-conditioned rail coaches, too, will attract service tax. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">The services sector account for about 60 per cent of the country's Gross Domestic Product. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">In order to bring as many services as possible in the net, the government has come out with a very wide definition of service. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">With some exception, it has been defined service as "any activity carried out by a person for consideration". <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-size: 11.0pt; mso-hansi-theme-font: major-latin;">The government aims to garner US$22 billion from the Service Tax during 2012-13. -- NNN-BERNAMA <o:p></o:p></span></div></div>

Tax on Almost All Services except Funeral, Gambling in India

NEW DELHI, India (NNN-Bernama) -- Funerals, betting and gambling have been exempted while almost all other services will be taxed from Ju...

India: Tax Overhaul Bill to Be Introduced in Parliament Monsoon Session

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<div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span style="font-family: 'Trebuchet MS', sans-serif;"><span style="line-height: 18px;"><br />
</span></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><br />
</div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">  <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">NEW DELHI (NNN-PTI): The Direct Taxes Code (DTC) Bill, which seeks to overhaul the 50 year-old Income-tax laws, will be brought in Parliament in the monsoon session and most of the recommendations of the Standing Committee will be accepted. <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><br />
</div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Finance Minister Pranab Mukherjee stated this in the Rajya Sabha ( Upper House) on Tuesday as he moved the Finance Bill, 2012 for consideration and passing. It has already been approved by the Lok Sabha (Lower House). <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><br />
</div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"I will have the opportunity after the Budget session is over, to go through all the recommendations (of the Standing Committee) and thereafter approval of the Cabinet, in the next monsoon session bring the DTC bill for approval of the both the Houses," Mukherjee said. <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><br />
</div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"...And that stage many of the recommendations of the standing committee will be accepted," he said. <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><br />
</div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">The minister said he could not go through the all the recommendations the Standing Committee on DTC as the report was given on March 9 and Finance Bill presented on March 16. <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><br />
</div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"...Therefore it was quite natural that I could not take into account all major recommendations on the DTC," he said. <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><br />
</div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">The DTC Bill will have far reaching consequences on the income tax laws in the country as it replaces the Income-tax Act, 1961. <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><br />
</div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">The Parliamentary Standing Committee on DTC, headed by senior BJP leader Yashwant Sinha, in its report had given a number of recommendations, including raising income tax exemption limit to Rs 3 lakh from Rs 1.8 lakh now. <o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><br />
</div><div class="MsoNormal" style="tab-stops: center 234.0pt; text-align: justify; text-justify: kashida; text-kashida: 0%;"><span lang="EN-US" style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Mukherjee ruled out reopening of cases where assessment orders have been finalised following retrospective amendment in laws related to taxation of overseas deals involving Indian assets. -NNN-PTI<o:p></o:p></span></div></div>

India: Tax Overhaul Bill to Be Introduced in Parliament Monsoon Session

NEW DELHI (NNN-PTI): The Direct Taxes Code (DTC) Bill, which seeks to overhaul the 50 year-old Income-tax laws, will be brought in Parl...

Obama Calls for End to Oil Company Subsidies

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</span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";">U.S. President Barack Obama has called for an end to tax subsidies for oil companies, saying the firms are making record profits while Americans are struggling with rising fuel costs.<o:p></o:p></span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";"><br />
</span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";">At the White House Thursday, the president said Congress can either vote to spend billions of dollars more on oil subsidies that keep the country “trapped in the past,” or it can end the subsidies so the nation can invest in its future.<o:p></o:p></span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";"><br />
</span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";">He said the three biggest U.S. oil companies made more than $80 billion in profits last year.<o:p></o:p></span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";"><br />
</span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";">“When the price of oil goes up, prices at the pump go up, and so do these companies' profits. In fact, one analysis shows that every time gas goes up by a penny, these companies usually pocket another $200 million in quarterly profits. Meanwhile, these companies pay a lower tax rate than most other companies on their investments – partly because we're giving them billions in tax giveaways every year.”<o:p></o:p></span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";"><br />
</span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";">He called for investments in clean energy technologies, wind and solar power, biofuels, fuel-efficient vehicles and energy-efficient homes and buildings — instead of the tax breaks to the oil companies.<o:p></o:p></span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";"><br />
</span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";">But prospects for a legislative repeal appear dim. Republicans say that too much government regulation has kept the fuel prices high. They also say that ending the subsidies would only further drive up prices and discourage spending on exploration.<o:p></o:p></span></div><div style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";"><br />
</span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif";">The rising costs have hurt the popularity ratings of Mr. Obama, who is running for re-election. ---VOA News<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div></div>

Obama Calls for End to Oil Company Subsidies

U.S. President Barack Obama has called for an end to tax subsidies for oil companies, saying the firms are making record profits while Ame...

India Not A Tax Haven, Says Finance Minister Pranab Mukherjee

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<div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">NEW DELHI (NNN-PTI) -- In a strong message to the critics of the retrospective amendment to the tax laws, India's Finance Minister Pranab Mukherjee on Tuesday asserted India is not a tax haven. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"India is not a no-tax country, India has a determined tax rate, but it is not a tax haven ... If you pay tax in your country of origin, you don't have to pay tax, if we have double taxation agreement with your country of origin. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"We are exactly explaining that position in respect of Vodafone case. It is not a vindictive attitude," Mukherjee said in the Lok Sabha (Lower House of Parliament) in his reply to the discussion on the Budget. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">India has dropped its pursuit of Vodafone Group for a £1.3bn unpaid tax bill relating to the British mobile phone operator's £7bn purchase of Hutchison Essar, in a move that will reassure foreign companies at a time when the subcontinent's economic boom is slowing.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">The Supreme Court ruling on Jan 20, 2012 put an end to the Indian tax office's long-running battle to extract capital gains tax for one of the country's biggest corporate takeovers, which was conducted in 2007 through offshore companies.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Vodafone, which has invested an estimated £12bn in its Indian venture, fought its case on the grounds that the tax was applied retrospectively and that capital gains are usually paid by the seller, not the buyer.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Mukherjee said the double taxation avoidance agreements (DTAAs) are meant for genuine investors who are required to pay in only one of the contracting countries. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">He said the tax laws are not arbitrary but transparent and determined. "We are not going to have tax haven. At the same time, we are not going to say that tax laws are arbitrary. Tax laws are transparent, it is firm and determined," he said. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">He defended government's proposal to amend the Income Tax Act with retrospective effect in the wake of Supreme Court order in the Vodafone case but said there was no room for apprehension as cases beyond six years cannot be reopened. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"It does not mean all cases will be reopened from 1961 and 1962 ... where is the apprehension?", he said. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">As per the IT Act, the government cannot reopen tax cases beyond six years, he said, adding the intent of legislature is that there should be no double taxation and also no outflow of revenue. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">The proposed IT amendment aims at taxing overseas mergers and acquisition relating to domestic assets with retrospective effect. The proposed changes in the I-T Act evoked sharp reactions from industry which argued that the move will hurt foreign investment. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">As regards the controversial provisions in the Budget on the general anti- avoidance rules (GAAR), the Finance Minister said there are companies which use the DTAAs to escape taxes. "Should I not prevent that?" he asked. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"I will examine and modify GAAR as and when required. This is essential for anti-avoidance," he said. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">In his budget for 2012-13, Mukherjee had said that the government wanted to introduce GAAR in order to "counter aggressive tax avoidance schemes, while ensuring that it is used only in appropriate cases, by enabling a review by a GAAR panel". <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">On the proposed 1 per cent excise duty on non-branded jewellery, he said the government will reconsider the proposal as it has received several representations from the industry which is objecting the move. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"I have no intention of causing any harassment or disturbing the industry. The intention was very clear, all of them, and all the state governments ... they are charging VAT on this (jewellery)," he said. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"If jewellers can pay value-added tax on the commodity, why can't they pay excise duty," he argued. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"But as there have been lots of representations, I am considering it," he added. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Bullion traders and jewellers are observing indefinite strike across the country to protest the Budget proposals imposing excise duty on non-branded jewellery, among others. -- NNN-PTI<o:p></o:p></span><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif; font-size: 16px; line-height: 18px;">NEW DELHI (NNN-PTI) -- In a strong message to the critics of the retrospective amendment to the tax laws, India's Finance Minister Pranab Mukherjee on Tuesday asserted India is not a tax haven.</span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"India is not a no-tax country, India has a determined tax rate, but it is not a tax haven ... If you pay tax in your country of origin, you don't have to pay tax, if we have double taxation agreement with your country of origin. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"We are exactly explaining that position in respect of Vodafone case. It is not a vindictive attitude," Mukherjee said in the Lok Sabha (Lower House of Parliament) in his reply to the discussion on the Budget. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">India has dropped its pursuit of Vodafone Group for a £1.3bn unpaid tax bill relating to the British mobile phone operator's £7bn purchase of Hutchison Essar, in a move that will reassure foreign companies at a time when the subcontinent's economic boom is slowing.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">The Supreme Court ruling on Jan 20, 2012 put an end to the Indian tax office's long-running battle to extract capital gains tax for one of the country's biggest corporate takeovers, which was conducted in 2007 through offshore companies.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Vodafone, which has invested an estimated £12bn in its Indian venture, fought its case on the grounds that the tax was applied retrospectively and that capital gains are usually paid by the seller, not the buyer.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Mukherjee said the double taxation avoidance agreements (DTAAs) are meant for genuine investors who are required to pay in only one of the contracting countries. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">He said the tax laws are not arbitrary but transparent and determined. "We are not going to have tax haven. At the same time, we are not going to say that tax laws are arbitrary. Tax laws are transparent, it is firm and determined," he said. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">He defended government's proposal to amend the Income Tax Act with retrospective effect in the wake of Supreme Court order in the Vodafone case but said there was no room for apprehension as cases beyond six years cannot be reopened. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"It does not mean all cases will be reopened from 1961 and 1962 ... where is the apprehension?", he said. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">As per the IT Act, the government cannot reopen tax cases beyond six years, he said, adding the intent of legislature is that there should be no double taxation and also no outflow of revenue. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">The proposed IT amendment aims at taxing overseas mergers and acquisition relating to domestic assets with retrospective effect. The proposed changes in the I-T Act evoked sharp reactions from industry which argued that the move will hurt foreign investment. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">As regards the controversial provisions in the Budget on the general anti- avoidance rules (GAAR), the Finance Minister said there are companies which use the DTAAs to escape taxes. "Should I not prevent that?" he asked. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"I will examine and modify GAAR as and when required. This is essential for anti-avoidance," he said. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">In his budget for 2012-13, Mukherjee had said that the government wanted to introduce GAAR in order to "counter aggressive tax avoidance schemes, while ensuring that it is used only in appropriate cases, by enabling a review by a GAAR panel". <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">On the proposed 1 per cent excise duty on non-branded jewellery, he said the government will reconsider the proposal as it has received several representations from the industry which is objecting the move. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"I have no intention of causing any harassment or disturbing the industry. The intention was very clear, all of them, and all the state governments ... they are charging VAT on this (jewellery)," he said. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"If jewellers can pay value-added tax on the commodity, why can't they pay excise duty," he argued. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">"But as there have been lots of representations, I am considering it," he added. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Bullion traders and jewellers are observing indefinite strike across the country to protest the Budget proposals imposing excise duty on non-branded jewellery, among others. -- NNN-PTI<o:p></o:p></span></div></div>

India Not A Tax Haven, Says Finance Minister Pranab Mukherjee

NEW DELHI (NNN-PTI) -- In a strong message to the critics of the retrospective amendment to the tax laws, India's Finance Minister Pran...

India: Government Issues Notification to Provide Average Rates of Service Tax Refund for a Wide Range of Goods Exported From India

<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="text-align: justify;"><span style="font-family: 'Trebuchet MS';"><b><br />
</b></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div align="center" class="MsoNormal" style="text-align: center;"><b><span style="font-family: "Trebuchet MS";">Adds to E-Enabled Service Delivery to Exporting Community, Limits Public interface and Reduces Transaction Costs in obtaining Refunds<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><st1:city w:st="on"><span style="font-family: "Trebuchet MS";">NEW DELHI</span></st1:city><span style="font-family: "Trebuchet MS";"> (<span class="apple-style-span"><span style="background: white; color: windowtext;">PIB) -</span></span>The Government of India has issued a notification today to provide average rates of service tax refund, ranging from 0.03% to 0.20% of the F.O.B. value of export, for a wide range of goods exported from <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>. The average rate of refund is in respect of 18 identified services used beyond the factory gate. This is being done to implement the simplified scheme.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS";">An announcement was made to this effect by the Union Finance Minister Pranab Mukherjee in his Budget Speech 2011 for introducing a simplified scheme for the refund of service tax paid on services used for export of goods on the lines of drawback of duties. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS";">As in the case of payment of duty drawback, the service tax refund will be enabled by the Indian Customs EDI System resulting in the amounts getting directly credited into the exporters’ bank accounts within a few days of confirmation of export without additional export documentation. Customs Officers have separately been vested with powers of Central Excise/Service Tax Officers for this purpose. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: "Trebuchet MS";">The scheme adds to the e-enabled service delivery to exporting community, limits public interface as well as reduces transaction costs in obtaining refunds.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div></div>

India: Government Issues Notification to Provide Average Rates of Service Tax Refund for a Wide Range of Goods Exported From India

Adds to E-Enabled Service Delivery to Exporting Community, Limits Public interface and Reduces Transaction Costs in obtaining Refunds N...

New Service Tax Structure a Step Closure Towards Proposed GST

<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: center;"><span class="Apple-style-span" style="font-weight: bold;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Service Tax Regime on Hotel Accommodation, Restaurant Services Restructured</span></i></span></div><div style="text-align: center;"><span class="Apple-style-span" style="font-weight: bold;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br /></span></i></span></div><div style="text-align: center;"><span class="Apple-style-span" style="font-weight: bold;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br /></span></i></span></div><div style="text-align: center;"><span class="Apple-style-span" style="font-weight: bold;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"></span></span></i></span></div><div class="MsoNormal" style="font-size: 11pt; line-height: 17px; margin-bottom: 10pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span lang="EN-US" style="font-size: 12pt; line-height: 18px;">Hotel accommodation, in excess of declared tariff of Rs. 1000 per day and service provided by air conditioned restaurants that have license to serve liquor are the new services <span class="GramE">which</span>have been brought under the service tax net.  While proposing to levy service tax on these services, the Union Finance Minister, <span class="SpellE">Shri</span> <span class="SpellE">Pranab</span> <span class="SpellE">Mukherjee</span> has said that the hotel accommodation with declared tariff of over Rs. 1000 per day will have to pay the service tax with an abatement of 50 per cent.  This will mean an effective burden of only 5 per cent of the amount charged. Air conditioned restaurants with license to serve liquor will now be paying service tax with an abatement of 70 per cent.  The effective burden will be 3 per cent of the bill only in this case. <o:p></o:p></span></span></i></div><div class="MsoNormal" style="font-size: 11pt; line-height: 17px; margin-bottom: 10pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span lang="EN-US" style="font-size: 12pt; line-height: 18px;"><span>            </span><span class="SpellE">Shri</span> <span class="SpellE">Mukherjee</span> has also proposed various measures to achieve a closure fit between the present service tax regime and its GST (service and goods tax) successor.<span>  </span>These measures would include:<o:p></o:p></span></span></i></div><div class="MsoListParagraphCxSpFirst" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span lang="EN-US" style="font-size: 12pt; line-height: 18px;"><span>·<span style="font: normal normal normal 7pt/normal 'Times New Roman';">         </span></span></span><span lang="EN-US" style="font-size: 12pt; line-height: 18px;">Bringing in a few new services into the tax net to expand the tax base while ensuring that the impact is predominantly on sections of society that have the ability to pay;<o:p></o:p></span></span></i></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span lang="EN-US" style="font-size: 12pt; line-height: 18px;"><span>·<span style="font: normal normal normal 7pt/normal 'Times New Roman';">         </span></span></span><span lang="EN-US" style="font-size: 12pt; line-height: 18px;">Suitably expanding or rationalizing the scope of existing service categories;<o:p></o:p></span></span></i></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span lang="EN-US" style="font-size: 12pt; line-height: 18px;"><span>·<span style="font: normal normal normal 7pt/normal 'Times New Roman';">         </span></span></span><span lang="EN-US" style="font-size: 12pt; line-height: 18px;">Rationalizing certain provisions relating to import of services and valuation;<o:p></o:p></span></span></i></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span lang="EN-US" style="font-size: 12pt; line-height: 18px;"><span>·<span style="font: normal normal normal 7pt/normal 'Times New Roman';">         </span></span></span><span lang="EN-US" style="font-size: 12pt; line-height: 18px;">Modifying provisions of the <span class="SpellE">Cenvat</span> Credit scheme to achieve a more realistic balance between input credits and output tax and harmonizing the provisions of the scheme across goods and services;<o:p></o:p></span></span></i></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span lang="EN-US" style="font-size: 12pt; line-height: 18px;"><span>·<span style="font: normal normal normal 7pt/normal 'Times New Roman';">         </span></span></span><span lang="EN-US" style="font-size: 12pt; line-height: 18px;">Rationalizing penal provisions to reinforce the message that honest taxpayers would be facilitated and deviants would be dealt with severely; and<o:p></o:p></span></span></i></div><div class="MsoListParagraphCxSpLast" style="font-size: 11pt; line-height: 17px; margin-bottom: 10pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;"><i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span lang="EN-US" style="font-size: 12pt; line-height: 18px;"><span>·<span style="font: normal normal normal 7pt/normal 'Times New Roman';">         </span></span></span><span lang="EN-US" style="font-size: 12pt; line-height: 18px;"> Adoption of Point of Taxation rules for services which would shift the basis for tax collection from “cash” towards “accrual” basis as with Central Excise duty.<span style="font-family: 'Times New Roman', serif;"> </span></span></span></i></div></div>

New Service Tax Structure a Step Closure Towards Proposed GST

Service Tax Regime on Hotel Accommodation, Restaurant Services Restructured Hotel accommodation, in excess of declared tariff of Rs. 1000 pe...

Service Tax Provisions to be Rationalised

Service Tax Provisions to be Rationalised

Rs. 4000 Crore Net Revenue Gain Through Service Tax Envisaged in 2011-12 Union Budget 2011-12 estimates to make net revenue gain of Rs. 4000...