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Showing posts from March, 2012


CURRENT ACCOUNT DEFICIT DOUBLES TO $19.6 b in Q3 Widening trade deficit and slowdown in capital inflows are weighing down India's key macroeconomic indicators. The country's current account deficit (CAD) jumped to 4.3 per cent of GDP in the October-December 2011 period (Q3) against 2.3 per cent in the corresponding year-ago period. Current account deficit occurs when a country's total imports of goods, services and transfers exceed exports, making it a net debtor to the rest of the world. In absolute terms, the current account deficit has widened to $19.6 billion in the reporting Q3 against $10.1 billion in Q3 of 2010-11. According to economists, a widening deficit will weaken the rupee which, in turn, will have an inflationary impact (India imports almost 80 per cent of its crude oil requirement). The rupee has depreciated by about 13 per cent (or Rs 5.75) against the dollar between April 1, 2011 and March 30, 2012. On Friday, the domestic currency closed at Rs 50.85 to th…

Clarification on POT

Circular No.154/5/ 2012 – ST
FNo 334/1/2012- TRU Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs Tax Research Unit Room No 146, North Block, New Delhi Dated: 28th March 2012 To Chief Commissioner of Customs and Central Excise (All) Chief Commissioner of Central Excise & Service Tax (All) Director General of Service Tax Director General of Central Excise Intelligence Director General of Audit Commissioner of Customs and Central Excise (All) Commissioner of Central Excise and Service Tax (All) Commissioner of Service Tax (All)
Subject: - Clarification on Point of Taxation Rules - regarding. 1.Notification No.4/2012 - Service Tax dated the 17th March 2012 has amended the Point of Taxation Rules 2011 w.e.f. 1st April 2012, inter- alia, amending Rule 7 which applied to individuals or proprietary firms or partnership firms providing taxable services referred to in sub-clauses (g), (p), (q), (s), (t), (u), (za) and  (zzzzm) of clause (105) of sect…


Income-tax (third amendment) Rules, 2012 - amendment in rule 12 and substitution of forms sahaj (itr-1), ITR-2, ITR-3, SUGAM (itr-4s), ITR-4 and itr-v Notification No.14/2012 [F.No.142/31/2011-TPL]/S.O. 626(E), DATED 28-3-2012 In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:- 1. (1) These rules may be called the Income-tax (3rd Amendment) Rules, 2012. (2) They shall come into force on the 1st day of April, 2012. 2. In the Income-tax Rules, 1962,- (A) in rule 12,- (i)  in sub-rule (1),- (a)  for the figures "2011", the figures "2012" shall be substituted; (b)  after clause (a), the following proviso shall be inserted, namely:- "Provided that the provisions of this clause shall not apply to a person being an individual, who is a resident and has (i)  assets (including financial interest in any entity)…

Liberalization of ODI Norms

Liberalization of ODI Norms
The RBI vide A.P. (DIR Series) Circular No. 96 & 97 dated 28th March, 2012 has liberalized the provisions related to Overseas Direct Investment.The objective is to provide operational flexibility to Indian Corporate having investment abroad or Indian resident individuals to acquire securities aboard. ;
Key terms of circular are outlined below:
Liberalized provision relating to Corporate having investment abroad :
Creation of charge on immovable / movable property and other financial assets.
As measure of liberalization, now RBI can also consider proposals for creation of hypothecation/pledge /mortgage on movable and immovable properties and financial assets of Indian Party and group companies under approval route within the overall limit of 400% for financial commitment subject to the condition that the Indian party and their group companies are submitting the No Objection Certificate in this respect.

Reckoning bank guarantee issued on behalf of JV / WOS fo…

Revised fees of Bank Audit 2011-2012 & increase in time line to complete the audit to 21 April at branch level

Revised fees of Bank Audit 2011-2012 & increase in time line to complete the audit to 21 April at branch level

Category of bank branch Rates of audit fees Revised Rates of audit 
(on the basis of quantum of advances) (Rs.) New Fees

Upto Rs.75 lakh 12,500/- 15,625

Above Rs.75 lakh and upto Rs.150 lakh 15,000/- 18,750

Above Rs.150 lakh and upto Rs.300 lakh 22,500/- 28,125

Above Rs.3 crore and upto Rs.5 crore 30,000/- 37,500

Above Rs.5 crore and upto Rs.10 crore 35,000/- 43,750

Above Rs.10 crore and upto Rs.20 crore 50,000/- 62,500

Above Rs.20 crore and upto Rs.30 crore 69,000/- 86,250

Above Rs.30 crore and upto Rs.50 crore 1,05,000/- 131,250

Above Rs.50 crore and upto Rs.75 crore 1,20,000/- 150,000

Above Rs.75 crore and upto Rs.125 cror 1,59,000/-198,750

Above Rs.125 crore and upto Rs.175 crore1,99,000/-248,750

Above Rs.175 crore and upto Rs.300 crore2,50,000/- 312,500

Above Rs.300 crore and upto Rs.500 crore2,82,000/- 352,500

Above Rs.500 crore 3,13,000 391,250

CBDT sets up panel for tax anti-avoidance

CBDT sets up panel for tax anti-avoidance The Central Board of Direct Taxes (CBDT), Indias apex body for administration of taxes, has formed a six-member committee to draft guidelines for enforcing the general anti-avoidance rules (GAAR) introduced in the Union budget to crack down on tax cheats. The panel, headed by CBDT chairman Laxman Das, is expected to submit the draft norms to the finance ministry within two months. The proposed guidelines will be put up for public feedback before they are finalized by the committee, which held a meeting early this week in New Delhi.
GAAR will help the tax authority deal with commercial transactions that are structured essentially to circumvent tax laws and avoid paying taxes. If the revenue authority concludes that a transaction by any entity is aimed primarily at avoiding taxes, it will be able to deny tax benefits claimed by the entity.
The key challenge for the committee is to formulate the rules to determine whether the arrangement lacks com…

CBEC on Service Tax on Tyre Retreading

Service Tax on Tyre Retreading – Board Clarification In a letter to the Chairman, CBEC, the AP Tyre Retreaders Association, requested the Department not to charge Service Tax on retreading of tyres under 'Management Maintenance & Repair Service', on the ground that 'retreading of tyre' is specifically figuring in Central Excise Tariff under TI 4012 and therefore, they are excisable goods. Hence, Service Tax cannot be imposed, as Excise Duty is payable. Board has examined the issue and observes, "The matter has been examined. For the purpose of levy of Central Excise, Section 3 of the Central Excise Act 1994, being the charging Section provides that a duty of excise shall be levied on all Excisable Goods, which are produced or manufactured in India at the rates set forth in the first schedule of the Central Excise Tariff Act. Further, 'Excisable Goods' have been defined under Section 2(d) of the Central Excise Act (CEA) as the goods specified in the firs…

Finance bill, 2012 & Judicial Decisions

Finance bill, 2012 & Judicial Decisions A Reckoner of Judicial decisions proposed to be overcome/incorporated in the Act- SOURCE: TAXMANN --
[2012] 19 251 (Article) Finance bill, 2012 & Judicial Decisions A Reckoner of Judicial decisions proposed to be overcome/incorporated in the Act The Finance Bill,2011 contains a large number of proposed amendments which are based on judicial decisions. Some of these proposed amendments are for overcoming judicial decisions unfavourable to the Revenue. Some of the proposed amendments are meant to resolve controversy due to conflicting rulings. Some proposed amendments are for incorporating in the statute principles set out in judicial decisions. These are all discussed below : Sr. No.Subject-matterCourt RulingsProposed Amendments to overcome/ incorporate Court rulings or to resolve conflicting judicial opinion(1)(2)(3)(4)1Definition of capital asset in section 2(14)Applying the test of enforceability, influence/ pers…

BUDGET 2012: Highlights by Talati & Talati

FAVOURABLE POINTS OF BUDGET 2012 – 13 ON DIRECT TAXATION 1.The Basic Exemption Limit for Individual (Male) have been increased from Rs. 1,80,000/- to Rs. 2,00,000/- giving tax relief of Rs. 2000/-. 2.The Basic Exemption Limit for Individual (Female) have been increased from Rs. 1,90,000/- to Rs. 2,00,000/- giving tax relief of Rs.1000/-. 3.The upper limit of 20 percent slab proposed to be raised from 8 lakhs to 10 lakhs. Therefore the new slab rates for General category is- Upto Rs. 2,00,000                              NIL Rs. 2,00,001 to Rs. 5,00,000             10% Rs. 5,00,001 to Rs.10,00,000           20% Rs. 10,00,001 and above                  30%
4.An Individual tax payers or an HUF are allowed a deduction upto Rs.10,000 for interest on deposit from savings Bank accounts ( other than time deposits) with Banking Co., Co-operative soc. Engage in business of banking or Post office,  u/s 80TTA. 5.Under section 115A the taxable rate have been reduced from 20% to 5 % (plus surcharge and cess…