Finance, Tax and Accounting

New Issue of India Briefing: India’s Goods & Service Tax and Retail Sector

Oct. 24 – In this new issue of India Briefing Magazine – titled India’s Goods & Service Tax and Retail Sector – we focus on two dramatic, ongoing initiatives by the Indian government to fuel economic activity in the country: the introduction of a dual goods and service tax and further opening in the retail sector.

India’s existing indirect tax structure is being restructured with a synchronized tax system and uniform levy, continuing national tax structure reform to encourage entrepreneurial initiatives and economic activity in India. A dual – Central and State level – Goods and Service Tax (GST) is planned to replace most of India’s current indirect taxes. A country-wide GST is anticipated to be realized by 2012-13.

Additionally, the Indian government is currently discussing the removal of the 51 percent cap on FDI into single-brand retail outlets and allowing some degree of FDI in multi-brand retailing, which has so far been prohibited in India. Recent protests and boycotts of modern retailers in India indicate that the forays foreign retailers have made into India’s retail sector are not welcomed by all. Continue reading →

Posted in FDI and Foreign Trade, Featured, Finance, Tax and Accounting | Tagged India Briefing Publications, India China Comparison, India Goods and Service Tax, India GST, India Multi-brand Retail, India Retail, India Single-brand Retail, India Tax | Leave a comment

No Mandatory Clause for Companies to Keep Two Books of Accounts

Oct. 21 – Organizations aspiring to move around to international auditing norms, the International Financial Reporting Standard (IFRS) may be spared from preserving two books of accounts — one under the Companies Act and the other for taxation purposes – if a Finance Ministry proposal gets implemented. The application, which was drafted in a discussion paper on Tax Accounting Standards issued by the government, aims at reducing the compliance burden on businesses.

It would be arduous for tax payers to preserve two sets of account books i.e. first in accordance with the Accounting Standards issued by the ICAI/notified under the Companies Act, 1956, and another in accordance with the Accounting Standards notified under the (Income Tax) Act. Continue reading →

Posted in Finance, Tax and Accounting | Tagged Companies Act, Income Tax Act, India Accounting, India Accounting Standards, India Finance Ministry, India Tax, International Financial Reporting Standard | Leave a comment

Hike in India PayPal Payments Ceiling to US$3,000 per Transaction

Oct. 20 – Users of online payment web site PayPal in India can now accept up to US$3,000 per export-related transaction in their accounts, with the RBI raising this limit from US$500 per transaction earlier.

The payment has to be withdrawn within seven days irrespective of the currency risk. Also, RBI has barred purchases abroad with PayPal balance. This causes losses to the buyers as it adds to exchange conversion losses, tax and other charges. Users also feel that PayPal exchange rates are far below the current rates. Continue reading →

Posted in Finance, Tax and Accounting, Legal and Regulatory | Tagged India Finance, PAN, PayPal, RBI, SME | Leave a comment

India Announces Special Incentives for Exporters

Oct. 19 – The government of India announced a Rs. 900-crore package for exporters to assist them to fight with the slowdown in developed markets and rising input costs. The Reserve Bank of India has already declared an interest subsidy of 2 percent on rupee export credit for handicrafts, handlooms, carpets and small and medium exporters. Along with the interest financial support, the total relief package for exporters stands at nearly Rs. 1,700 crore. Continue reading →

Posted in FDI and Foreign Trade, Finance, Tax and Accounting, Legal and Regulatory | Tagged Commerce Ministry, Foreign Direct Investment, India Exports, India FDI, India Incentives, India Regulations, India Regulatory, India Tax | Leave a comment

India Grants Approval to Buy Assets Overseas for Public Sector Units

Oct. 14 – The government of India has permitted a policy to facilitate profit-making state-run firms to obtain assets overseas. The new policy also seeks to augment the power of Maharatna and Navratna companies and provide greater autonomy for acquiring raw material assets abroad.

The government will also mull over setting up a dedicated Sovereign Wealth Fund to obtain assets overseas. The guidelines for acquisition of raw material assets abroad by public sector enterprises is likely to appreciably improve the capabilities of such entities to acquire such assets and protect the country’s long term economic interests. Continue reading →

Posted in Finance, Tax and Accounting, Legal and Regulatory | Tagged India Regulatory, Maharatna, Navratna, Public Sector Units, Sovereign Wealth Fund | Leave a comment

Taxability of Leave Travel Allowance

Oct. 3 – Leave travel allowance (LTA) is the one of the most common cases of reimbursement adopted by employers to compensate employees due to the tax benefits attached to it. Section 10(5) of the Income Tax Act (1961) read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt.

Who is covered by the benefits?
LTA exemptions can be maintained where the employer provides LTA to a member of staff for leave to any place in India taken by the employee and their family. Such freedom is limited to the extent of actual travel costs incurred by the employee. Travel has to be undertaken within India and overseas destinations are not covered for exemption. Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Markets | 1 Comment

External Commercial Borrowings in Chinese Renminbi

Sept. 29 – Taking into consideration the particular needs of the infrastructure sector, the existing external commercial borrowing (ECB) policy has been reviewed in discussions with the Government of India and it has been decided to permit Indian companies which are in the infrastructure sector – where “infrastructure” is defined under the existing guidelines on ECB – to avail of ECBs in Chinese renminbi (RMB), under the approval route, subject to a yearly cap of US$1 billion until further review. Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Markets | Leave a comment

RBI relaxes Forex Facilities for Individuals

Sept. 26 – The Reserve Bank of India has further liberalized foreign exchange services for individuals under the Foreign Exchange Management Act (FEMA) 1999. The services are as follows:

NRIs can be joint holders in resident’s SB/EEFC/RFC accounts
Individual residents in India are now allowed to comprise non-resident close relative(s) as joint holder(s) in their resident bank accounts, namely: savings (SB), exporter earners’ foreign currency (EEFC) and residents’ foreign currency (RFC) accounts, on a “former or survivor” basis. Continue reading →