TIOL-DDT 2844 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=23157"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2015_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="300" height="148" hspace="5" border="0" align="right" ></a><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2844</font><br> 12 05 2016<br> Thursday</strong></font></p> <p align="center"><font face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600" size="3">Rajya Sabha Clears Finance Bill 2016 - One Step Short of Enactment </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Rajya Sabha yesterday passed the Finance Bill 2016, which will now go to the Rashtrapati Bhavan for the approval of the President for enactment into the Finance Act 2016. Most probably, they will get the President's signature today or tomorrow. The Finance Bill has to be enacted within 75 days after it is presented, that is by 14th of May 2016.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In his reply to the discussions on the Finance Bill, Finance Minister, Mr. Arun Jaitley concentrated mostly on GST and hoped the GST Bill will be passed in the Monsoon Session of Parliament. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the demand for doing away with the one percent additional tax for manufacturing States, the FM said it was consensus of the panel of State Finance Ministers, but he was ready to go back to the States and persuade them to drop the additional tax as demanded by the Congress. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the suggestion to create a dispute redressal mechanism headed by a Supreme Court judge, the FM was at his combative best in attacking judicial activism. He said it would be like giving powers to the judiciary to decide on the legislative power of taxation. He said “step by step, brick by brick” the courts are encroaching into the powers of legislature. He asked the opposition not to allow the judiciary to enter into matters of taxation, so far untouched by judicial intervention in legislation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He said, “<em>You are suggesting that if states can't decide in the GST Council, a body headed by the Supreme Court judge must then decide. For heaven's sake, I beseech you in the interest of Indian democracy not to go on this misadventure. With the manner in which encroachment of legislative and executive authority by India's judiciary is taking place, probably financial powers and budget making is the last of the only powers that you have left.”</em> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On capping the GST to 18 per cent, he said the opposition demand is not realistic as it will handicap the States' and the Centre's power to tax luxury items and need based taxation. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f1"></a>Who Believes India's GDP? - 3G Speech of Jairam Ramesh - GDP, GST and Gas </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CONGRESS</strong> MP, Jairam Ramesh, in perhaps his last speech in the Rajya Sabha yesterday said, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sir, my today's speech is going to be on three Gs. It is a 3-G speech. The first 'G' will be on GDP. The second will be on GST. And, I will come to the third 'G' after finishing two Gs. I come to the first G, that is, the GDP. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today, nobody believes in India's GDP figures. Dr. Swamy is shaking his head. I am sure, he agrees with me. And, I will come to Dr. Swamy a little later. The Chief Economic Advisor does not believe GDP numbers. The Governor of the Reserve Bank does not believe GDP numbers. The London Economist does not believe our GDP numbers. The Wall Street Journal does not believe our GDP numbers. Investment Bankers, Research Scholars -- they all know that our economy is on a growth path. Nobody is denying the fact that we are on a higher growth path than most other countries including, perhaps, China. But the numbers that are being put out by the Government on GDP are highly suspect. In fact, there is today a wide consensus that the GDP growth is not 7.5 per cent plus, but somewhere between 5.9 to 6.5 per cent. Sir, I am not going to quibble about whether it is 5.9 or 7.5. We are growing; we are growing well; we should grow faster; there is no dispute on that. But, I think, for the first time, the credibility of our GDP's numbers has become an international issue. Now, I am not attributing any <em>mala fides</em> to anybody. It has happened. The way the GDP numbers are being calculated, it has served the Government's political purpose very well. And, I would honestly urge the Finance Minister to pause, to take note of the criticisms that are being made of our GDP numbers and come up with a credible set of estimates, which everybody, including the Governor of the Reserve Bank, including the Chief Economic Adviser, including all top economists of the world and India and all research scholars, agrees to. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sir, I have a suggestion for him. He does not have to look anywhere else outside. His own family. In his own party, he has an outstanding economist who has written seminal articles on statistical methods in Econometrica in 1962, in the Quarterly Journal of Economics in 1964 and in the American Economic Review of 1965. Yes, Sir, I referring to Dr. Swamy! He can get Dr. Swamy to head a commission to review his GDP estimates, and in this process, he may end up saving his job as well. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sir, as far as the GST is concerned, let me reiterate our position which has been consistent and has been principled. We want GST; we want a GST, a good and simple tax. We brought the legislation in 2010. It was torpedoed by the Standing Committee. It took two-and-a-half years for the Standing Committee Report to be published, to be submitted. It was, then, subverted by the Chief Minister of Gujarat, who has now emerged as the biggest champion of GST in India and abroad. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We have made three specific suggestions for improving the GST. I have read hon. Finance Minister's blogs and his facebook, his response to our suggestions. If these suggestions are met, I am sure a consensus can emerge on the way forward. So, on GST, Sir, let me reiterate our position. Our position is, an independent dispute settlement mechanism; number two, the elimination of extra one per cent tax; and, number three, through the creative use of language, in which the Leader of the House is an expert, introduction in the Constitution of an upper cap on the GST rate. I know the Leader of the Opposition is going to say that the Constitution does not mention any...(Interruptions)... I am sorry, Leader of the House. I am used to seeing him as the Leader of the Opposition. I would soon get to see him as the Leader of the Opposition again, I am sure. Article 276, if the hon. Leader of the House knows Article 276(2), a very specific number of Rs.2,500/- as the ceiling on profession tax is mentioned in the Constitution. So, it is not true to say that the Constitution does not mention specific numbers, but, as I said, through the creative use of language, it is possible to accommodate the Congress Party's position that there be an upper cap on the GST rate in the Constitution (Amendment) Bill, so that Indian industry is competitive and the Indian consumer pays a lower tax incidence. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is as far as GST is concerned. Sir, let me now turn to the third 'G'. The first "G" 'GDP' has three letters, the second "G" 'GST' has three letters and the third "G" also has three letters. It is a coincidence. It is 'Gas'; and I am not talking of 'political gas' but of 'natural gas'. But before I talk about gas, let me draw the hon. Finance Minister's attention to an article that appeared on Sunday in one of India's leading newspapers which I will authenticate and lay on the Table of the House which says the following. "<em>A school of thought in the Government believes that the proposed GST is undesirable, a top Government Economist told The Hindu. There is a list of products for which States can go for higher than standard rates. A desirable GST is one that will have uniform rates. The current GST has too many rates. It is not a real GST"</em>. Sir, what I want to say is that the real opposition to the GST is not coming from the Congress. The real opposition to the GST is coming from within the BJP, from within sections of the Government, and the Congress Party is being used as a smokescreen, as an alibi, as an excuse for the failures and the limitations of the current structure of GST. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sir, let me now turn to 'Gas', and why do I bring it up in the context of the Appropriation Bill is because this 'Gas' is a case of misappropriation and it is only appropriate that I talk about misappropriation in the context of appropriation. What is the story, Sir? Today the country is rightly concerned, the Finance Minister is concerned, the Minister of State is concerned about huge mounting NPAs of banks -- one lakh crores, five lakh crores. Different numbers are given. The country is exercised over the fact, and rightly so, that Mr. Mallya is sitting in London when he owes the banks Rs.9,000 crores. There are industrial groups in India which owe banks Rs.20,000 crores, Rs.30,000 crores, Rs.70,000 crores and, I think, the Congress Party will support any move that the Government comes forward with for reducing the burden of NPAs and for solving this problem of wilful defaulters once and for all. There is no politics in this. We will support any move that the Finance Minister comes forward with to reduce the incidence of NPAs and to bring wilful defaulters to book. However, Sir, as the Prime Minister said, there is no selectivity in the fight against terrorism. You cannot have good terrorists and bad terrorists; you cannot have good NPAs and bad NPAs. You cannot be selective in your fight against NPAs. Public sector NPA is as bad as a private sector NPA. If there is a private sector industrialist who has taken Rs.9,000 crores from banks and has not paid it back and is not in a position to pay it back, go after that industrialist and we will support you. But what about a company that takes Rs.20,000 crores from banks, has to pay Rs.1800 crores per year back to the banks in terms of interest but its annual income is only Rs.80 crores? Is this a solvent company? Isn't this company a fit case for being declared a non-performing asset? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2005, the Chief Minister of Gujarat announces India's largest gas discovery of 20 trillion cubic feet. Sir, 20 trillion cubic feet of gas in offshore Krishna-Godavari basin! Offshore basin means Government of India, not Government of any individual State. It is a national resource. The contract for exploration was given by the Government of India. From 2005 to 2009, what happens? The reserves in the KG Basin, rightly called the Deen Dayal Upadhyay Block, are reduced by GSPC, from 20 trillion cubic feet to one trillion cubic feet! These are not my inventions. These are not my numbers. This is from the CAG Report presented to the Gujarat Assembly, hardly fifteen days ago, on the last day of the Session, leaving no opportunity for a discussion. These are numbers. This is a forty page-discussion on this company in the CAG Report. Reserves come down from 20 trillion cubic feet to one trillion cubic feet. Bank loans go from zero crore to Rs. 19,700 crores. There is a failure of due diligence. Yes, UPA Government was in power. Yes, Finance Minister was a UPA Minister. Yes, the Petroleum Minister was a UPA Minister. But the company was the GSPC. And, when the reserves have declined from 20 trillion to one trillion, as the CAG brings out, bank loans merrily increase from zero to Rs. 19,700 crores. Please find out why this happened. You are investigating everybody. You are investigating Mr. Mallya; go ahead. You are investigating, hopefully, the Panama Papers names; we will support you. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f2"></a>FM's Reply to 3G Speech </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> his reply, the FM was at his witty best. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are many firsts that Jairam Ramesh scored including his demand for a discussion on the CAG report on a state PSU in the central legislature. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I think he is the first Congressman to score a new first. He is the first Congressman who has the history to publicly praise Dr Subramanian Swamy. He advised me to consult him. I am conscious of the experience and wisdom of Dr Swamy. He first became the member of this house in 1974. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He is a well-known economist. I will certainly consult him but I must compliment the courage and conviction of Jairam Ramesh that whereas he concentrated on 3-Gs, he probably let down the fourth one inasmuch as he indulged in this new misadventure of doing what he did today. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Another first that he has scored is that he is the first MP to tell the Supreme Court that you must start interfering in the speaker's and chairperson's ruling with regard to the conduct of the business of the House. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f3"></a>Service Tax - Leasing of Vehicles - Delhi HC stays Adjudication Order of Mumbai Service Tax Commissioner </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAN</strong> the Delhi High Court admit a writ petition against an order passed by the Mumbai Service Tax Commissioner? The High Court held it can, if even a miniscule part of cause of action arises within the jurisdiction of the court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court stayed the order of the Service Tax Commissioner demanding tax on the business of operating leases of vehicles. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For more details, please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26975" target="_blank">Breaking News</a></strong>.</font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f4"></a>Income Tax -Kaun Banega Crorepati - Revenue Wins Against Amitabh Bachchan in Supreme Court </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY</strong> the Supreme Court upset the decisions of the ITAT and High Court in a Revenue Appeal against Amitab Bachchan. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee, Amitabh Bachchan in the re-revised return dated 31st March, 2003 had made a claim of additional expenses of 30% of the gross professional receipts (Rs.3.17 crores). It appears that the Assessing Officer required the assessee to file requisite details in this regard. The assessee responded by letter dated 13th February, 2004 stating: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“With regard to the 30% estimated expenses claimed, we have to submit that these are the expenses which are spent for security purposes by employing certain Agencies, guards etc. for the personal safety of Shri Bachchan as he has to protect himself from various threats to his life received by him and to avoid extortion of money from gangsters. The names of such Agencies cannot be disclosed/divulged as there is a possibility of leakage of information of Agencies' names from the office staff, which will obviously be detrimental to the interests of Shri Bachchan. The payments have been made out of cash balances available and lot of outstanding expenses are to be paid which could not be paid for want of income.” </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For more details, <strong>please see <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTEzNjA5" target="_blank">2016-TIOL-70-SC-IT</a></strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f5"></a>Our Cob(Web) is 500 </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26977" target="_blank">TIOL</a></strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26977"> - COB(WEB)</a> completes 500 editions today. In a remarkable feat, our Managing Editor Shailendra Kumar completes 500 editions of his widely read and well appreciated weekly column - <strong>TIOL - COB(WEB)</strong>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Writing a weekly column is not all that easy - who knows it better than I? (writing a daily column). The CobWeb is famous for its incisive analysis on the intricacies of economics and taxation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commenting on one of the CobWebs, a tax expert also a columnist wrote to us, "<em>Excellent. I think it is time now for me to stop writing. You are really rendering me out of business.</em>" </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today we bring you the 500th <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26977" target="_blank">COB(WEB)</a></strong>. </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@tiol.in" target="_blank"><strong>vijaywrite@tiol.in</strong> </a></font></p> </body> </html>