Monthly Archives: April 2011

India’s Advance Tax Rulings Benefit Non-Resident Investors

Apr. 28 – Differences of opinions between the tax payers and the tax administration are a universal phenomenon. Advance tax is a mechanism by which such problems would be settled in advance and tax payers are aware of their liability. Therefore, the Indian government has set up an authority to provide advance tax ruling.

The rewards of a ruling to taxpayers are that it offers assurance regarding the tax consequences of a particular business deal. Certainty and predictability are particularly important in the context of pre-transaction tilling. A post operation ruling would at least serve to accelerate the assessment process thereby dipping drastically cost of litigation, so that the taxpayers may better plan for future undertakings. Continue reading →

India’s Free Trade Agreements

Apr. 27 – Free trade agreements are normally made between two countries. Many governments, throughout the world have either signed FTA, or are negotiating or contemplating new bilateral free trade and investment contracts.

However, there are two types of free trade agreements: namely, bilateral and multilateral. Every customs union, trade common market, economic union, customs and monetary union also has a free trade area. Continue reading →

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India Exempts Visa Facilitators from Service Tax

Apr. 25 – India’s Finance Ministry has stated that the aid provided by visa facilitators to applicants does not come under the range of service tax. According to the circular from the Central Board of Excise and Customs (CBEC), visa facilitators, while providing visa assistance directly to individuals, do not act on behalf of the embassies as agents of the principal and hence service tax is not leviable within the meaning of business auxiliary service. Continue reading →

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First Quarter PE Investment Soars in India

Apr. 20 – India saw private equity investments worth US$3.3 billion in the first three months of 2011 – most of which went in the infrastructure, IT and manufacturing sectors.

In all, 96 deals were made in the quarter with private equity deals worth about US$750 million confirmed in March, an increase of nearly 120 percent from the month before. Private equity investments in the January-March quarter were about 57 percent higher than the US$2.1 billion worth of PE investment recorded over the same period in 2010 and more than double the US$1.5 billion accrued over last three months of 2010. Continue reading →

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Newer, Faster Approval Procedure for Businesses Underway

Apr. 19 – India will soon have a system in place that will simplify the process of approval for business projects, according to a government official. It will not only encourage investors to invest in India but also young entrepreneurs to start up their own businesses. Currently, each and every business needs to go through a cumbersome series of approvals before it actually becomes a functioning firm.

In all, 35 different sets of approval are required from authorities before setting up a business in India. The process includes seeking approval from municipalities, state government agencies and the central government’s authorities. The process also requires registration with the authorities responsible for collecting VAT and income tax, as stipulated by the Companies Act and the Shops & Establishment Act.
Continue reading →

Posted in Business, FDI and Foreign Trade, Legal and Regulatory, Regulatory Update | 1 Comment

‘Sugam’ Return Form to Simplify Life for India’s Tax Payers

Apr. 18 – The Union Budget 2011-12 has planned a singular prominence on reducing the compliance burden of small tax payers by projecting a simplified return form called “Sugam.” The finance minister of India, while presenting the Budget, said that the small tax payers who fall within the scope of presumptive taxation can utilize the new simplified form.

Sugam is currently being assessed by the law ministry. It would make the life of tax payers easy and compact.

Saral II for the salaried tax payers has been successful and has received good feedback. It is the most simplified version of tax returns for the individual tax payers. Continue reading →

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India Issues Tax Benefits for Garment Companies

Apr. 15 – In the annual budget presented by the finance minister, branded garment companies can get the benefit of CENVAT (central and value added tax) credit. It means the garment companies will be taxed on inputs.

In the budget, the ministry has projected 10 percent excise duty on readymade garments and textile made ups which is under a reputed banner or brand name. Additionally, the government has also widened the advantages of excise duties to small scale readymade garment companies. Continue reading →

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India’s FDI Trends and Analysis

Apr. 8 – India has emerged as the preferred destination for many foreign international enterprises due to constructive factors such as high economic growth, fast population growth, English speaking people, and lower costs for workers.

Location determinants of foreign direct investment
Location-specific rewards are further classified by three types of FDI motives. Continue reading →

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