สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 27 พฤศจิกายน 2556

RBI balm fails to reduce foreign banks' headache

Foreign banks would not have to pay capital gains tax and stamp duty for converting their India branches into wholly-owned subsidiaries (WOS), the Reserve Bank of India (RBI) clarified on Tuesday. But bankers said clarity was awaited on certain other areas of taxation. For instance, a few foreign lenders had requested RBI to consider deducting expenses incurred on creating subsidiaries from taxable income. The government has yet to clarify if that will be allowed. RBI has said foreign banks that commenced operations in India before August, 2010, will have the option of conducting their business here either through branch mode or via subsidiary. But the foreign lenders that entered India after August 2010, will have to mandatorily set up subsidiaries.

(Source: Business Standard)

Finance Minister talks tough on service tax evaders

Taking a firm stand on tax evaders, Finance Minister, P Chidambaram, today said that people evading service tax would not escape from the government and the latter could construct a complete profile of evaders once they were under the scrutiny of any of the tax departments. He said that financial transactions can be traced once you are identified as a tax evader and a 360 degree profile on such evaders would be constructed. The government will have the option to arrest and prosecute chronic offenders. He urged the traders and others to take advantage of the VCES (Voluntary Compliance Encouragement Scheme) scheme and then come out clean. The notorious sectors which were collecting service tax but not depositing with the government were construction, couriers, telecom and security services among others, the minister claimed. To bring back non-filers, the scheme has been operational since May 10, and will continue till December 31. The scheme offers ‘no penalty, no interest’ and provides one-time opportunity to the defaulters to come clean. Under it, the defaulters have to pay at least 50 per cent arrears for the five-year period ending 2012 and the balance in another six months without interest.

(Source: Business Standard)

India’s corporate tax rates among highest

Tax rates for companies in India are among the highest in the world and the number of payments is also more than the global average, putting the country at a low 158th rank on the ‘Paying Taxes 2014’ list. However, the time taken for tax payments is relatively less in India, which is rated ahead of China and Japan where it takes 318 hours and 330 hours, respectively, to comply with tax regulations, according to a World Bank and PwC report. According to the report, the total tax rates in India can be as high as 62.8%, there are as many as 33 payments under the head of profit, labour and other taxes, and the time taken to comply with taxation requirements could be as much as 243 hours. India was placed 158th position in the overall ranking of paying taxes, above Brazil (159th) and below the Russian Federation (56th) and China, which was ranked 120th.

(Source: Financial Express)

IMF meets Finance Min officials to review economic situation

Ahead of its world economic growth outlook, representatives of International Monetary Fund (IMF) met senior Finance Ministry officials to discuss the macroeconomic situation of India.IMF representatives held consultations with the Finance Ministry and the meeting was chaired by Economic Affairs Secretary Arvind Mayaram, an official source said. Fiscal deficit, current account deficit and investments were among other things that were discussed. During the first quarter, Indian economy grew by 4.4 per cent, lowest in four years. Besides Finance Ministry officials, IMF representatives also met key officials of the Reserve Bank as well as private sector players. Indian economy expanded by 5 per cent in the 2012-13 fiscal, the lowest level in a decade. For the current fiscal, Reserve Bank expects GDP to grow by 5 per cent, while the government expects the growth to be between 5 per cent and 5.5 per cent. Both IMF and the World Bank had lowered the growth forecast for India last month. IMF projected an average growth rate of about 3.75 per cent at market price in 2013-14. Besides, the World Bank slashed India's economic growth forecast for the current financial year to 4.7 per cent, from earlier projection of 6.1 per cent.

(Source: Economic Times)

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