CBDT signs 4 more APAs with taxpayers in August

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The Central Board of Direct Taxes (CBDT) signed four more advance pricing agreements (APAs) in August with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.

The four APAs entered into during August, 2017 pertain to various sectors of the economy like telecom, banking, manufacturing and education, an official statement said today.

“Out of these four agreements, three are unilateral and one is a bilateral,” it said.

According to the statement, the bilateral APA is for international transactions between an Indian company and a UK-based company and this is the eighth bilateral APA with the United Kingdom and 13th overall (the other five being with Japan).

With the signing of these four agreements, the total number of APAs entered into by CBDT has reached 175, the statement said, adding, “this includes 162 unilateral APAs and 13 bilateral APAs.”

Besides, in the current financial year, a total of 23 APAs (2 bilateral and 21 unilateral) have been signed till date, the statement noted.

The APA provisions were introduced in the Income-tax Act in 2012 and the “rollback” provisions were introduced in 2014.

The 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.

The statement pointed out that since its inception, the APA scheme has been well-accepted by taxpayers and that has resulted in more than 800 applications (both unilateral and bilateral) being filed so far in five years.

Noting that the progress of the APA scheme strengthens the government’s resolve of fostering a non-adversarial tax regime, the statement said 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.

 

Source: Times of India

FDI in services sector up 26% to $8.68 billion in FY17

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FDI inflows in the services sector rose by about 26% to $8.68 billion in 2016- 17 with the government taking steps to improve ease of doing business and attracting foreign investments.

The services sector, which includes banking, insurance, outsourcing, research and development, courier and technology testing, had received foreign direct investment (FDI) worth $6.89 billion in 2015-16, according to data of the Department of Industrial Policy and Promotion (DIPP).

The government has taken several measures such as fixing timeliness for approvals and streamlining procedures to improve ease of doing business in the country and attract foreign investments.

With FDI growth in key sectors like services and telecom, the overall foreign investment inflows in the country too increased by 9% to $43.5 billion last fiscal.

Increasing FDI inflows in the services sector assumes significance as it contributes over 60% to India’s gross domestic product. The sector accounts for about 18% of the total FDI India received between April 2000 and March 2017, followed by key sectors such as computer software & hardware, construction development and telecommunications.

To further boost FDI inflows in the sector, the government is considering relaxation of policy in areas like single brand retail, multi-brand retail, print media and construction. The government is also focusing on enhancing services exports. It is organizing global services exhibition besides the commerce and industry ministry is looking at relax norms in areas like higher education to attract foreign players.

Foreign investments are considered crucial for India, which needs around $1 trillion for overhauling its infrastructure sector such as ports, airports and highways to boost growth. A strong inflow of foreign investments helps improve the country’s balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.

Source: http://www.livemint.com/Money/oqGqFei9Aeuk00ls8ZgXLI/FDI-in-services-sector-up-26-to-868-billion-in-FY17.html

India Inc’s March M&A deal tally jumps 4-fold to $28 billion

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India Inc’s M&A deal tally in March rose four-fold to $27.82 billion, led by the Vodafone-Idea merger, taking the overall figure to $31.54 billion in the first quarter of 2017, says a report.

Overall deal activity in the January-March quarter witnessed an unprecedented three-fold year-on-year rise in value terms, driven solely by the Vodafone-Idea mega merger, which accounted for 80 per cent of the total values.

“The Indian deal activity was dominated by big-ticket mergers and acquisitions (M&As) this quarter. The quarter witnessed one of the largest deals in the country with Vodafone and Idea’s merger, which is estimated at around $27 billion,” Grant Thornton India LLP Partner Prashant Mehra said.

The January-March quarter recorded $33.7 billion across 300 deals marking a sharp increase in value as compared to $10.9 billion in the same period last year while volumes declined by 27 per cent.Without the Vodafone-Idea mega merger, estimated to be a $27 billion transaction, the deal activity would have recorded 39 per cent decline in values, assurance, tax and advisory firm Grant Thornton said.

M&A market activity has so far been driven solely by the big-ticket deals, while on the other hand number of transactions continued to slip for the third straight quarter.

“Primary driver for M&A growth was consolidation in the domestic market with deal values growing by 10 times on the back of healthy capital markets and easing credit conditions. This enabled companies strike big ticket deals either to slash debt or consolidate market share,” Mehra said.

Meanwhile, the cross-border deal activity is yet to pick up pace in 2017 as compared to previous quarters due to looming uncertainties in the global economy.

Going forward M&A activity this year is expected to stay positive owing to the sustained interest in Indian economy.

Mehra believes consolidation and expansion is set to be the major theme that will drive the deal activity, especially in healthcare, telecom, e-commerce and infrastructure sectors.”In financial services sector, the possibility of new business models emerging post demonetisation, continued fund raising by NBFCs and a consolidation push by micro finance firms will play a big role,” he added.

Source:   http://economictimes.indiatimes.com/articleshow/58160464.cms

FIPB clears 6 FDI proposals worth Rs 180 crore

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Inter-ministerial body FIPB today cleared six foreign direct investment proposals worth about Rs 180 crore.

 

The Foreign Investment Promotion Board has cleared six proposals including those of Janalaxami Finance and Turmeric Vision, a Finance Ministry official said.

 

The panel headed by Economic Affairs Secretary Shaktikanta Das had considered 15 proposals.

 

The official further said four investments proposals were rejected while decisions on five were deferred for want of more inputs.

 

India allows FDI in over 90 per cent sectors via automatic route. However, investment proposals in sensitive sectors like telecom and banking go through FIPB.

 

In last two years, the government has taken a series of reforms measures to liberalise FDI regime. Last month, it announced FDI liberalisation in nine sectors such as civil aviation, retail and private security services. This was the current government’s second round of relaxation in these rules.

 

During 2015-16, FDI into the country increased by 29 per cent to $40 billion from $30.93 billion in the previous fiscal.

 

Source : http://economictimes.indiatimes.com/articleshow/53175869.cms

Government issues licence guidelines for virtual telecom operators

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The entry of VNOs is expected to push down cost of providing telecom services for companies and even give them room for cutting down tariffs.

The Telecom Department on Friday released licence guidelines for virtual network operators, opening the door for new class of players which will act like retailers for telecom service providers.

 

“After considering the recommendations of Trai on VNO, the government has decided to grant Unified Licence VNO (UL VNO),” DoT said in the licence guidelines.

 

The Virtual Network Operators will be entities providing telecom services like mobile landline and internet but only as retailer for full-fledged telecom operators such as BSNL, MTNL and Airtel etc.

 

The entry of VNOs is expected to push down cost of providing telecom services for companies and even give them room for cutting down tariffs.

 

“VNO shall use underutilized telecom infrastructure of national telecom operators. This will reduced cost of ownership on telecom companies to provide telecom services at more affordable rates,” internet firm Bluetown’s Country Managing Director Satya N Gupta said.

 

For obtaining UL VNO, interested companies will need to pay a one-time non-refundable entry fee for authorisation of each service they want to provide and for each service area where they wish to operate.

 

“The total amount of entry fee shall be subject to a maximum of Rs 7.5 crore,” the guidelines said.