Tax & Accounting

Anti-Corruption Laws in India – Minimize Your Risk Exposure

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By Srinivas Raman

Laws India

 

With the festive season around the corner, companies in India are particularly vulnerable to risks arising out of the breach of anti-corruption laws. It is customary to give and receive gifts during major festivals in India, and firms typically incur various forms of hospitality and promotional expenditures in the course of business operations.

However, in certain cases, this conduct could potentially trigger serious fraud investigations into the company, even resulting in criminal liability. The compliance regime gets further convoluted in the case of multinational companies operating in India or having business interests in India due to the extra-territorial application of certain foreign statutes.

This article highlights how foreign firms can be implicated in such cases, and suggests international best practices to mitigate liability.

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Reverse Charge Mechanism in the Import of Services under GST

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By Srinivas Raman

The new Goods and Services Tax (GST) regime has brought about a slew of reforms to the indirect tax system, which affect firms doing business in India. One such change pertains to the introduction of reverse charge mechanism (RCM) and the taxation of import of services via RCM.

What is RCM under GST?

Usually, the registered supplier of goods or services is required to pay GST to the government after collecting the same from the recipient. RCM is a process used in case the supply of goods or services is by an unregistered supplier. In such transactions, the recipient is required to directly pay GST to the government instead of the unregistered supplier. It is important to note that in all cases subject to RCM, the recipient must be registered under GST.

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GST Impact on the Flexi-Staffing Industry in India

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By Srinivas Raman

The introduction of the Goods and Services Tax (GST) regime has increased the demand for temporary jobs and organized flexi-staffing firms in India. The flexi-staffing industry in India is worth approximately US$280 billion (Rs 27,000 crores), and is expected to develop in a positive way due to the impact of GST.

How does the flexi-staffing model work in India?

Flexi-staffing or contract labor refers to an employment model where employees are hired by a staffing agency (contractor), and lent out to work at and under the supervision of a user company (principal employer). In such a model, the principal employer does not have any direct employment relationship with the flexi-employees, although they may be liable to fulfill certain limited legal obligations.

In India, the flexi-staffing industry employs more than two million workers in the organized sector – the majority of whom are aged 21-30 years. Most flexi-employees are employed in jobs such as data operations, accounts, sales, back end operations, administration, and marketing.

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Exporters in India Suffer under GST Regime – Delays in Refund Processing, Malfunctioning System

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By Srinivas Raman

GST on Imports and Exports in India

 

The improper administration of the goods and services tax (GST) regime is adversely affecting exporters in India.

Exports are taxed under the Integrated Goods and Services Act, 2017 as per which exporters are supposed to enjoy ‘zero rated supply’, i.e. taxes and duties paid on input goods or services or final goods or services are to be refunded.

However, since the implementation of the GST, the online refund mechanism has either delayed processing or been non-operational due to technical glitches. Consequently, exporters are facing major financial and compliance related burdens. Some of the other challenges faced by the exporters are discussed below.

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Anti-Profiteering under GST in India: Regulatory Measures and Compliance for Business

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By Srinivas Raman

Busting Myths about India's GST

 

The goods and services tax (GST) is a game changer for India’s indirect tax system, removing cascading taxes and simplifying administration.

The new regime also ensures that the tax rebate obtained by sellers or service providers under GST will be passed on to the final consumers.

Towards this end, GST legislation includes anti-profiteering measures under the Central Goods and Services Tax Act, 2017 (Act) and the Anti-Profiteering Rules, 2017 (Rules).

These measures ensure that businesses do not make excessive or unfair profits or charge unwarranted hikes under the guise of the GST. Further, it allows for tax benefits to reach consumers through suitable reduction in product prices.

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MAT Audit in India: Tax Department Notifies Revised Reporting Form 29B

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By Dezan Shira & Associates

India’s federal tax agency, the Central Board of Taxes (CBDT), recently notified new revisions for Minimum Alternate Tax (MAT) audit reporting under the Income Tax (22nd Amendment) Rules 2017.

The MAT is a local tax that India has levied on companies since 1987, and ensures that companies who are able to reduce their tax liability (up to zero percent) despite earning substantial book profits – due to various provisions under India’s Income-tax Act (IT), 1961 – are brought under the tax net.

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Five GST Myths Busted

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By Vasundhara Rastogi

IB-Demystifying the GST

 

The goods and services tax (GST) – the biggest tax reform in India – finally came into existence on July 1, 2017, after 17 years of deliberations between successive ruling governments and opposition parties.

While the Modi government continues its positive propaganda around the GST, several myths and misconceptions remain.

This article notes five key facts for businesses to get a transparent view about how the GST actually functions.

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GST Timeline: 2000-2017

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By Dezan Shira & Associates

After facing 17 years of political set-backs and missing several deadlines, India’s biggest tax reform – the Goods and Services Tax (GST) was launched on July 1, 2017. On successful completion of its one month, we provide you with a timeline of the most historic moments that culminated into the ‘one nation, one tax’ system in India.

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