Six new appellate tribunal benches for faster disposal of indirect tax cases
BS REPORTERS
New Delhi, 17 October
The government will set up six new benches of the Customs, Excise and
Service Tax Appellate Tribunal ( CESTAT) to expedite disposal of
indirect tax cases. Chandigarh, Hyderabad and Allahabad will get a
CESTAT bench each for the first time, while New Delhi, Mumbai and
Chennai will get an additional bench.
The decision, approved by the Cabinet here on Thursday, will
facilitate the cause of the government as well as litigants, by
reducing travel time and expenditure, an official statement said. "
With the creation of six additional benches of CESTAT, disposal of
cases will increase and pendency will decrease benefitting government
and tax payers," the statement noted. In all, the posts of 12 tribunal
members ( six technical and six judicial) in the higher administrative
grade and 98 posts of supporting staff, including deputy registrar and
assistant registrar, will be created.
"The creation of additional new benches of the CESTAT would amount to
a onetime expenditure of ₹ 3.45 crore, while the recurring expenditure
would be ₹ 10 crore per annum," the statement noted.
At present, CESTAT has three benches each in Delhi and Mumbai and one
each at Kolkata, Chennai, Bangalore and Ahmedabad. The headquarters
and the principal bench are in Delhi.
Preferential Market Access policy
A policy reserving a stipulated percentage of government procurement
of electronics for domestically manufactured items has
also been given the go- ahead, Press Trust
of India reported, citing sources. This is a revised version of the
Preferential Market Access policy, kept in abeyance after the
government faced pressure from multinational companies and trade
groups.
e- KYC set to benefit banking, financial services sectors
NEELASRI BARMAN & M SARASWATHY
Mumbai, 17 October
The soon- to- be- launched electronic know- your- customer ( eKYC)
process, based on Aadhaar or unique identification number, would be a
boon for the banking and financial services sector.
Pilot studies on e- KYC are underway. Based on the results of these
studies, a launch is expected by December, say facilitators such as
National Payments Corporation of India, Visa and MasterCard.
These organisations would act as a bridge between banks and financial
service companies and the Unique Identification Authority of India.
"With e- KYC, you can actually do an online account opening in a bank,
which will be much simpler. A lot of people in rural areas do not have
the documents which we require for KYC. This will be a good instrument
to get new accounts opened, especially in rural and unbanked areas,"
said Sumant Kathpalia, head ( consumer banking), IndusInd Bank. " This
initiative will help banks like us to expand in rural and un- banked
areas, along with our expansion in metros," he added.
In its physical form, the KYC process is completed by banks in five-
seven working days. " Through e- KYC, the time taken would be reduced
to three days and this way, a bank can save the time, money and
manpower required for the verification process. Adoption of e- KYC is
very important by banks, as well as insurance companies and fund
houses. e- KYC will be a very cost- effective move for us," said a
senior Central Bank of India official.
The insurance industry would also stand to gain. K G Krishnamoorthy
Rao, managing director and chief executive of Future Generali India
Insurance, said, " This will lead to less documentation for insurance
companies and customers. Further, all verifications can be done
online, which will ease the overall processing." ADVANTAGE E- KYC
|Under the electronic know- yourcustomer (e- KYC) process, customers
can open a bank account online based on just their Aadhar card |While
the physical KYC process takes five- seven working days, the time
would be reduced to three days in the case of e- KYC |Using this
process will also mean less documentation for insurance companies and
customers
I- T department can't rewrite our balance sheets, Vodafone tells high court
BS REPORTER
Mumbai, 17 October
At the high court here on Thursday, British telecom major Vodafone Plc
questioned the income tax ( I- T) departments move to claim tax over
shares issued by its Pune unit to the parent company.
This fresh case pertains to the tax assessment done by the I- T
department for the year 2009- 10. This comes after the HC here had
recently turned down a petition filed by the company against the tax
authorities over transfer pricing for the year 2007- 08. The
department wanted the company to add another ₹ 8,500 crore to its
income, taking the tax claim to ₹ 4,200 crore, including interest and
penalty.
The department had slapped yet another notice over transfer pricing,
as it believes the valuation of the shares issued was suppressed. The
tax authorities claim ₹ 1,300 of income was suppressed by Vodafone.
The parent company invested ₹ 246 crore and bought 289,000 shares. The
IT department values each of these shares at ₹ 8,509, while the
transfer pricing officer valued it around ₹ 80,000. The department
claims the difference in valuation is to be treated as a loan given to
the company, and tax could be claimed on that. Senior corporate lawyer
Harish Salve, who represented Vodafone, contends this move is against
the law.
"The claim is departing from the real income and is being valued on
notional income which is being fantasised," said Salve. He also said
premium which is not received cannot be taxable.
The case was heard by the chief justice on Thursday and will heard on
Friday, too. The parent company is yet to respond to a query on the
issue. However, Salve said the IT department has no right to rewrite
the balance sheet of a company.
"After they add this loan amount, they ( I- T department) might say
that the net worth is higher by ₹ 2,000 crore," he said.
Sebi to tweak ICDR, MF and other rules...
SACHIN P MAMPATTA
Mumbai, 17 October
The Securities and Exchange Board of India ( Sebi) is set to tweak a
number of existing regulations to bring those in line with the new
Foreign Portfolio Investors ( FPI) regime, the new unified framework
for foreign portfolio investment into India.
There are at least five sets of regulations which will require changes
to reflect the change from the foreign institutional investor ( or
FII) framework to the FPI one, according to the minutes of a board
meeting on October 5 made available on the Sebi website.
The regulations which require change include ones that govern the
activities of mutual funds, dictate norms on fund- raising by
companies and regulation of the depositories which maintain securities
in electronic format. The regulator will have to issue notifications
tweaking the Sebi Issue of Capital and Disclosure Requirements (
ICDR), Sebi Substantial Acquisition of Shares and Takeovers
Regulations, 2011; Sebi Depositories and Participants Regulations,
1996; Sebi Intermediaries Regulations, 2008, and the Sebi Mutual Funds
Regulations 1996. The new FPI regime cannot take full effect till the
term foreign institutional investor is replaced with foreign portfolio
investor in all of these regulations.
The FPI norms would also require amendments to the income tax Act,
according to taxation experts.
The foreign portfolio investment norms consolidated all the different
avenues for portfolio investment in India into a single one. Earlier,
regulations covering foreign institutional investors and qualified
foreign investors were to be merged into a single FPI route. "
Existing FIIs, sub- accounts and qualified foreign investors shall be
merged into a new investor class termed FPIs," said the press
statement issued following the meeting on October 5.
Sebi is also looking to change the format for the statement of assets
and liabilities under its ICDR regulations.
NREGULATORY MOVES N
Move to rationalise existing rules in line with new FPI norms
|Regulator had given its nod to a new FPI framework in a board meeting
on October 5 |Sebi needs to tweak at least five separate regulations
before it can take full effect |Rules to be tweaked include Takeover
and Mutual Funds Regulations |Required changes to the regulations
likely soon, reveals agenda to the board meeting |Tax regulations also
will need changes, say experts PAVING THE WAY FOR FPI REGIME
--
CS A Rengarajan
9381011200
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