GST data: CBEC orders taxmen to intensify efforts against uncooperative taxpayers

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After receiving ground reports of difficulty faced by tax officials in collecting comparative data from unwilling assessees, the Central Board of Excise and Customs (CBEC) has written to all commissioners urging them to intensify their efforts and challenge the objections raised by taxpayers in sharing information.

After receiving ground reports of difficulty faced by tax officials in collecting comparative data from unwilling assessees, the Central Board of Excise and Customs (CBEC) has written to all commissioners urging them to intensify their efforts and challenge the objections raised by taxpayers in sharing information. As FE reported earlier, CBEC had asked tax commissioners to collect granular data of taxes paid and credit availed by assessees under the goods and services tax (GST) for the July-October period and compare the same with data from the corresponding period of last fiscal. This, the board hopes, will bring out any anomalies in tax payment and utilisation of input tax credits (ITC), including transitional credit, by taxpayers. “When ‘resourceful officers’ are instructed by the special secretary to get the requisite data using their unjustified pressure, he seems to have bureaucratic overreach. Tone and tenor of the letter is such, as if, CBEC has issued an indictment order against chartered accountants on a holiday. Under digital India programme, the government is spending billions to control tax terrorism by eliminating interface of tax officers with taxpayers, here we witness complete negation of such policies,” Rajat Mohan, partner at AMRG & Associates, said.

CBEC has mentioned certain objections raised by the taxpayers in sharing the required information and also suggested ways to counter such resistance. For instance, some assessees have claimed that their chartered accountant (CA) was out of station and hence data couldn’t be shared. In his letter, CBEC member John Joseph said that it was improbable for CAs to go on long leave in the month of December as they would be busy filing I-T returns, hence they should be contacted and data should be collected from them.

“The name of the CAs who are not cooperating with the department along with the name of the name of the companies being handled by them may be intimated to his office,” the board said in the latest missive to field staff.Further, some assessees have said that they come under the jurisdiction of the states’ administration and would not share data with central officials. Responding to this, the letter said: “The list of such assessees who refuse to part with the data, may be indicated and reported to this office. However, it is felt that if the officer is resourceful then he/she should be able to collect the data.”

While CBEC had earlier provided tax filing data collected through the summarised return GSTR-3b with all the commissionerates, it has now also provided them with information on transitional credit claimed by assessees through the TRAN-I forms. “Comparison of data should be possible now as you are being supplied with the GSTN data on trans credit. Please analyse the data, report discrepancies/disputed credit if any along with reasons for the same,” the letter said. Officials tasked with collecting data have said that since assessees are being asked for data informally without being under investigation, the taxpayers are within their right to refuse to share such information. This has presented a twin problem for officials tasked with the exercise, as assessees can’t be forced to share the information while the task itself requires substantial time.

On the basis of data shared with field formations, CBEC wants the top 100 assessees to be selected by each of the commissionerates based on central excise and service tax revenue of FY 17 for revenue analysis. Each official would be given a maximum of two taxpayers for detailed analysis. The analysis would be based on central GST, state GST, integrated GST and compensation cess paid by assessees against pre-GST revenue of the corresponding period. In cases where it is possible, the officials would also take VAT and CST revenue into account. Further, these will include the pattern and quantum of ITC availed and CGST utilised along with transitional credit availed in form TRAN I and its comparison with the pre-GST period. In their analysis, the officials must also note any unusual ITC claimed, which can be detected by comparing the TRAN 1 ITC availed with the average ITC balance during pre-GST. “This analysis should clearly bring out any reason for variation in total duty/tax payable during respective periods,” the official quoted above said.

Additionally, the board has directed the commissioners to collect data only in the excel format, without any change in the format provided by the department. The analysis of the data is to be submitted to the board, which will be taken up for discussion this Saturday when the revenue secretary meets state and central tax officials for a reviewing GST collections. A tax official said that the department wasn’t convinced about the validity of the ITC claims, which was one of the main reasons for lower GST mop-up in October. The department has earlier undertaken verification of large quantum of transitional credit — amounting to Rs.65,000 crore, claimed by assessees.

 

Source: Financial Express

Forex reserves jump by $1.2 bn to $401.94 bn

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India’s foreign exchange reserves rose by USD 1.2 billion to touch USD 401.942 billion in the week to December 1.

India’s foreign exchange reserves increased by USD 1.2 billion to touch USD 401.942 billion in the week to December 1, according to the RBI data.

The surge in reserves was aided by an increase in foreign currency assets, a major component of the overall reserves.

The reserves once again crossed USD 400 billion mark in the previous week, after they rose by USD 1.208 billion to USD 400.741 billion.

The foreign currency reserves increased by USD 1.151 billion to USD 377.456 billion for the reporting week, the RBI said today.

Expressed in the US dollar terms, foreign currency assets include the effect of appreciation or depreciation of the non- US currencies such as the euro, the pound and the yen held in the reserves.

After remaining stable for many months, gold reserves also rose by USD 36.5 million to USD 20.703 billion.

The special drawing rights with the International Monetary Fund rose by USD 4.9 million to USD 1.502 billion.

The country’s reserve position with the Fund also rose by USD 7.4 million to USD 2.280 billion, the Reserve Bank of India said.

 

Source: The Hindu Business Online

Credit growth gathering steam: RBI

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Year-on-year disbursements up 10% as of November 24

Credit offtake from banks is gradually gathering steam, going by Reserve Bank of India data. This is underscored by the fact that year-on-year credit growth nudged closer to 10 per cent as on November 24, 2017.

Given the overhang of bad loans, especially in the case of public sector banks, market experts are of the view that these banks had turned risk-averse and reined in lending. However, banks seem to be slowly shrugging off their risk aversion.

In its fifth bi-monthly monetary policy statement, the Reserve Bank of India said: “On the positive side, there has been some pick-up in credit growth in recent months. Recapitalisation of public sector banks may help improve credit flows further.” After plunging to a multi-decade low of 4.1 per cent in May 2017, non-food bank credit has witnessed a rising trajectory every month since June, although it has been lower vis-a-vis the year-ago period.

In June, non-food bank credit growth rose to 4.8 per cent and increased in the following months — July (5.3 per cent); August (5.5 per cent); September (6.1 per cent); October (6.6 per cent). In the fortnight ended November 24, 2017, the banking system’s deposits declined by ₹41,164 crore while credit nudged up by ₹3,524 crore.

 

Source: The Hindu Business Online

FPIs pump over Rs 19,700 crore in November, highest in eight months

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After taking a break from buying into Indian equities in August and September, FPIs bought equities in abundance in November.

Foreign investors pumped over Rs 19,700 crore into the country’s stock markets in November, the highest in eight months, mainly due to government’s plan to recapitalise PSU banks and surge in India’s ranking in the World Bank’s ease of doing business.

In addition, such investors put in Rs 530 crore in the debt markets during the period under review.

According to depositories data, foreign portfolio investors (FPIs) invested a net amount of Rs 19,728 crore in equities last month.

This is the highest net investment by FPIs since March, when they had poured in Rs 30,906 crore in the equity market.It has been a tremendous journey for the Indian equity markets in 2017. After taking a break from buying into Indian equities in August and September, FPIs bought equities in abundance in November.

The strong inflow could be largely attributed to the government’s decision to recapitalise public-sector banks, which is expected to enhance lending and propel economic growth, said Morningstar India’s senior analyst manager (research) Himanshu Srivastava.

“This is particularly seen as a positive step after the questions have been raised from various quarters on the government’s ability to effectively implement economic reforms. Further, the slow pace of economic growth was also believed to be due to rising non performing assets (NPAs) problem in public sector banks, hence this decision provided a much-needed impetus to FPIs to again look back at Indian equity space,” he added.

Finance Minister Arun Jaitley had announced the PSU bank recapitalisation plan of Rs 2.11 trillion, out of which Rs 1.35 trillion will come from recapitalisation bonds, and the rest from markets and budgetary support.

Additionally, the news about India faring well in the World Bank’s Ease of Business index and a jump in core sector growth also turned the tide in India’s favour, Srivastava said.

India gained 30 places in the World Bank’s ease of doing business index for 2018 to 100th among 190 nations.

“These (bank’s recapitalisation plan and world bank’s ranking) and positive developments in the recent times provided a much-needed breather to FPIs who were concerned about the short-term impact of demonetisation and goods and services tax (GST) on the domestic economy and sluggish pace of economic recovery,” he added.

Yet another positive piece of news has come from Moody’s Investor Services, which upgraded its India rating by a notch to ‘Baa2’ from ‘Baa3’ with a stable outlook, citing improved economic growth prospects driven by the government reforms.
Overall, FPIs have invested Rs 53,800 crore in equities so far in 2017 and another Rs 1.46 lakh crore in debt markets.

CBDT signs first ever two Indian APAs with Netherlands in Nov-2017

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CBDT signs first ever two Indian APAs with Netherlands in Nov-2017. The total number of APAs entered into by the CBDT has gone up to 186

CBDT signs first ever two Indian APAs with Netherlands in Nov-2017. The total number of APAs entered into by the CBDT has gone up to 186

 

 

 

Press Information Bureau
Government of India
Ministry of Finance
01-December-2017 11:53 IST
Central Board of Direct Taxes (CBDT) signs two Indian Advance Pricing Agreements (APAs) in November, 2017

The Central Board of Direct Taxes (CBDT) has entered into 2 Bilateral Advance Pricing Agreements (APAs) during the month of November, 2017. These Agreements are the first ever Bilateral APAs with The Netherlands. With the signing of these Agreements, the total number of APAs entered into by the CBDT has gone up to 186. This includes 171 Unilateral APAs and 15 Bilateral APAs.

These two APAs pertain to the Electronics and Technology sectors of the economy. The international transactions covered in these agreements include Distribution, Provision of Marketing Support Services, Provision of Business Support Services, etc.

The APA provisions were introduced in the Income-tax Act in 2012 and the “Rollback” provisions were introduced in 2014. The APA Scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance. Since its inception, the APA Scheme has been well-accepted by taxpayers.

The progress of the APA Scheme strengthens the Government’s resolve of fostering a non-adversarial tax regime. The Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.

*****
DSM/SBS/KA 

Source: http://abcaus.in/income-tax/cbdt-signs-first-ever-two-indian-apas-with-netherlands-in-nov-2017.html

CBDT shoots off letter to taxmen, says don’t go overboard on fishing and roving inquiries in wake of demonetisation drive

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The move comes at a time when the tax department’s field formations have apparently been on an overdrive after the demonetisation move brought large chunks of supposedly tax-evaded cash into the banking system.
The Central Board of Direct Taxes (CBDT) has sent a missive to all assessing officers (AOs) to stick to protocol while pursuing cases of “limited scrutiny” and not resort to “fishing and roving inquiries” in such cases.

The Central Board of Direct Taxes (CBDT) has sent a missive to all assessing officers (AOs) to stick to protocol while pursuing cases of “limited scrutiny” and not resort to “fishing and roving inquiries” in such cases. The move comes at a time when the tax department’s field formations have apparently been on an overdrive after the demonetisation move brought large chunks of supposedly tax-evaded cash into the banking system. The department selects cases of “limited scrutiny” — which restricts probe into a single aspect rather than a complete appraisal of tax liability — through Computer Aided Scrutiny Selection (CASS). The data mined include annual information reports and 26AS, which includes tax payment/TDS history. In its latest direction to the assessing officers (AOs), the board said it has come across instances where AOs have ventured beyond their jurisdiction while making assessments in ‘limited scrutiny’ cases by initiating inquiries on new issues without following the due procedure.

“These instances have been viewed very seriously by the CBDT and in one case, the Central Inspection Team of CBDT was tasked with examination of assessment records on receipt of allegations of several irregularities,” the letter said. The CBDT in fact suspended the officer concerned after it was found that there was no reason recorded for expanding the scope of limited scrutiny. Violating standard operating procedure, the officer had not sought approval from principal commissioner for converting limited scrutiny cases into a complete scrutiny case. Moreover, the AO hadn’t maintained the order sheet properly, which gave rise to strong suspicion of mala fide intentions. The purpose of introducing ‘limited scrutiny’ was to curb overarching powers of AOs and improve ease of paying taxes. The CBDT has previously issued instruction to AOs to confine the questionnaire to the specific issues and complete the case expeditiously in a limited number of hearings.

The CBDT reiterated that AOs must maintain “order-sheet” properly by ensuring that the minutes of the hearing in a case are entered along with relevant date. Further, it said that the order-sheet must have entries for each posting, hearing and seeking and granting of adjournments. Order-sheet is meant to chronicle the progress of an assessment case by the concerned official. “Suspension of undisciplined officers clearly conveys the message that the government aims to make India’s taxation regime transparent, non-adversarial and taxpayer friendly. But the established fact is that real picture is drawn from the enforcement and not policy formulation. Hoping that the tax authorities follow the instructions diligently going forward and end the era a tax terrorism,” Rakesh Nangia, managing partner at Nangia & Co said.

Source: Financial Express

Forex reserves rose to $399.533 billion as on November 17

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India’s foreign exchange reserves rose by $240.40 million as on November 17 to $399.533 billion, data from the RBI shows. Foreign currency assets, which form a key component of reserves, rose by $220.40 million from the previous week to $375.096 billion.

India’s foreign exchange reserves rose by $240.40 million as on November 17 to $399.533 billion, data from the RBI shows.

Foreign currency assets, which form a key component of reserves, rose by $220.40 million from the previous week to $375.096 billion.

FCAs are maintained in major currencies like US dollar, euro, pound sterling, Japanese yen etc.

Movement in the FCA occur mainly on account of purchase and sale of foreign exchange by the RBI, income arising out of the deployment of foreign exchange reserves, external aid receipts of the government and revaluation of assets.

Gold reserves remained stable at $20.66 billion.

Special drawing rights (SDR) from the International Monetary Fund rose by $7.9 million from the previous week to $1.497 billion.

SDR is an international reserve asset created by the IMF and allocated to its members in proportion of their quota at the IMF.

The Reserve Position in the IMF rose by $12.1 million to $2.273 billion.

Source: Financial Express