Issue #108

Technology work for business







Budget 2016: Technology can amplify changes, says Vishal Sikka

It's encouraging to see the Union Budget reinforce the Indian government's commitment to focus on equitable growth areas clearly relying on the Digital India mission — and its pillars — to enable and amplify progress. Especially since the Budget has looked at leveraging technology to enable many of these changes.

Government to 'rightsize' ministries for projects like 'Make in India',

'Namami Gange'

The Centre is planning to 'rightsize' its ministries and enlist professionals for its priority projects such as 'Make in India' and 'Namami Gange'. The downsizing of the ministries would happen over the next few months by identifying bureaucrats who can be deployed in other departments.

Referring to this, Finance Minister Arun Jaitley said in his budget speech that a task force has been constituted to rationalise human resources in the various ministries.

Hello startups, here's your ticket to a tax holiday.

A proposal for tax exemption on profits, one-day registration of companies and exemption of capital gains tax on startup investments are key points.

  • Make in India Week: MoU’s worth 15.2L Cr Signed.
  • General Insurance companies will be listed in the stock exchange
  • Listed Banks add 1 Lakh Cr in bad loans in Q3
  • No Surcharge, service charge on card & digital payments.
  • Finance ministry to go green, print less copies of Economic Surveys, Budget
  • RBI cancels Bajaj Auto , IDFC Finance & 24 others NBFC registrations.
  • 60% of interest accrued on EPF after April 1 will be taxed: Govt
  • Flipkart’s valuation markdown: Billions gone in a flash


International Section

Venezuela inflation hits 181% GDP down 5.7%

Venezuela’sCentral Bank reported that the country’s inflation hit 180.9% in 2015, while the economy contracted 5.7%. Investors are reportedly concern about a potential default, with Venezuela facing around $10 billion in debt payments amid a major liquidity crunch. The international Monetary Fund has estimated that the country’s annual inflation will jump to 720% this year.

US shale firms finally predict output declines

Leading US shale producers are at last predicting output declines this year, a long-anticipated turning point for a market reeling from an epic supply surplus. The bad news is that, taken together, the declines they are disclosing to investors appear milder than some analysts have predicted.

  • Sales may get thanda as colas loosing Thunder- Excise duty on sugary aerated water has been increased
  • Tighten your seat belts but happy landings too – Flying will get more expensive
  • Jewellers to go on strike in protest over gold tax - reintroduction after four years of sales tax on gold jewelry
  • Small taxpayers get the biggest relief - A hike in surcharge may have caused consternation among the superrich, but low-income taxpayers are a happy lot.
  • Suit gets boot, government sings 'Jai Kisan' - Total allocation for agriculture and farmer welfare at Rs 35984 crores.
  • Pipeline of hope for oil producers - A tweak in the cess policy extended an immediate post-tax relief of $3 per barrel,
  • Budget 2016 punches lawyers, hike in service tax pinches everyone - Services are going to be costlier. And it's going to be a taxing time for lawyers
  • Woman on the Mind- LPG connections to be provided under the name of women members of family: Rs 2000 crore allocated for 5 years for BPL families.
  • Big Bank Boost- Banks get a big boost: Rs 25,000 crore towards recapitalization of public sector banks.
  • Reach faster by roads- Rs. 27,000 crore to be spent on roadways
  • 100 per cent FDI in marketing of food products produced and marketed in India- Walmart, Tesco to get 100 % FDI in multi-brand retailing
  • Energy Regained- Rs. 3000 crore earmarked for nuclear power generation
  • Padhega India – Badhega India - Rs. 1,700 crore for 1500 multi-skill development centers.
  • Rs. 38,500 crore for Mahtma Gandhi MGNREGA for 2016-17
  • Looking for a house just go for it- Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.
  • Quick Money - Govt to increase ATMs, micro-ATMs in post offices in next three years.
  • Buying a Car is a BIG Deal – With Levy of Infra Cess & Luxury tax.
  • Budget is Pro- Village, Pro- Poor & Pro Farmer- with focus on bringing about qualitative change in the country and alleviate poverty through a slew of time-bound programmes.
  • Big Boys of India INC. are unhappy-No reductions in tax rates and started the process of phasing out corporate tax exemptions.


State of Jharkhand & Ors. v. Tata Steel Ltd. & Ors.(SC)(12 Feb, 2016)

Held:The concept of exemption is distinct from the concept of deferment of tax. After the JVAT Act came into force, under the statutory provisions, there was no exemption and beneficiaries were entitled to convert to the scheme of deferment. The period remains intact, that is, 8 years. The repayment has to be done in equal six monthly instalments and that period is 5 years. The repayment commences after completion of eligibility period of deferment or the prescribed percentage limit of fixed capital investment, whichever is earlier. The prescribed authority can grant an eligibility certificate but he has to keep in view the terms and conditions stipulated in thus analysed, the irresistible conclusion is that the repayment schedule has to end on 31.08.2013 within a span of 5 years from the expiration of the eligibility period. It is argued on behalf of the assessee that it is not a case for levy of interest. Regard being had to the special features of the case and taking note of the fact that the assessee-1st respondent had already deposited the amount in pursuance of the order of Court and regard being had to the nature of litigation, court direct that the 1st respondent-assessee shall pay 12% interest per annum and the said amount shall be deposited with the competent authority of the revenue within three months. Appeal disposed of..


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Ravikiran Ceramics Pvt Ltd Vs. Commissioner of Income Tax(HC-GUJ)(2 Feb, 2016)

Held:As is wellknown section 69C of the Act pertains to unexplained expenditure and provides that where in any financial year, an assessee has incurred any expenditure, and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any offered by him is not in the opinion of the Assessing Officer satisfactory, the amount covered by such expenditure or part thereof, would be deemed to be the income of the assessee for such financial year. He noted that the officers of the assessee company had also admitted the commission payment to said Shri Laljeebhai and Shri Siddiquibhai who were associated with M/s. Sudchemie India Pvt. Ltd. Who would provide job work to the assessee. In this background, the assessee owed a duty to explain the source of such expenditure. Court may recall the explanation of the assessee was that the bills and vouchers were inflated to generate income for payment of such commission. However, such explanation was not accepted by the Assessing Officer in the order of assessment making observationsEntire issue, as can be appreciated, is based on the assessment of evidence on record. When the Assessing Officer and the Commissioner concurrently found that there was unexplained expenditure and source of such income was not satisfactorily explained, section 69C of the Act would certainly be applicable. Petition partly allowed.

National Petroleum Construction Company Vs. Director Of Income Tax (International Taxation) (HC-Delhi)(29 Jan, 2016)

Held:DTAA between India and UAE - Article 5 of the DTAA provides for an inclusive definition of the term "Permanent Establishment" and specifically lists out places of business that fall within the meaning of that expression. Read in the context of the other provisions of Article 5, paragraph 2 clearly indicates that it has been used as an explanatory provision to specifically include the species of places of business that would constitute a PE of an enterprise. In this view, paragraph 1 and 2 of Article 5 of the Insofar as sub-paras (h) and (i) of paragraph 2 of Article 5 are concerned, the test of permanence as required under paragraph 1 of Article 5 is substituted by a specified minimum period of nine months. The Project Office was only used for the purposes of correspondence and as a communication channel; apart from that, the Project Office had no role to play in the execution of the activities under the Contracts and no other business of the Assessee was carried on through the Project Office. The activity of the Assessee's Project Office in Mumbai would clearly fall within the exclusionary clause of Article 5(3)(e) of the DTAA and, therefore, cannot be construed as the Assessee's PE in India. Appeals disposed of.


Semi-Automated Approach Vs specific IT System like

The Indian economy has undergone a transformation of sorts in the last decade and is today the third largest economy with respect to purchasing power parity (PPP). With this change has come complexity. And coming in its wake as always, are some revolutionary solutions. Each matter has its own complexity which is evidenced by various reports and format that need to be filled. Practically every aspect of running an enterprise is affected by legalities which keep becoming more stringent and complex as the levels of activity and profitability goes up. Legalities being just that, one cannot wish them away. Most corporate in these circumstances invariably find some solution or the other tailor made to suit their situation. Sophistication till a while back and to some extent even

today has a negative connotation which invariably leads to resistance and resultant heartburns. But increasing emphasis at every level including the Government on Digitization and the usage of the internet have brought a paradigm shift in the way we look at systems to help us do business. No more half measures like excel sheets and the likes. You now have IT systems like the CADashboard, a platform exclusively for professionals (CA/CS/Lawyers) & SME. The advantage one gets are:

1.Complete, on-the-cloud business so you do not need to invest in any advanced machinery like servers, disk-drives etc.

2.Complete package taking care of all needs of Professionals like reminders, formats, latest info etc so that one need not waste time looking for information elsewhere and can concentrate on business

3.Advanced features which no manual or semi-manual system can ever provide

4.Complete accessibility anywhere in the world in real-time.

5. Data security at the highest levels

6.Seamless updates of system and relevant information present therein.

7.Cost effective due to its being extremely user-friendly.

Need we say more about Cloud-based Applications? Most likely not! Eating to prove the pudding might be a luxury for most. The same though can’t be said for industries. Here it is an imperative to get it right, first time and every time. So get it right, right away & be ready to change the way you manage your business and customers.

Here is the best platform.

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