Alarm!Alarm!Wake up!
All the way Beast runs through! All the way reforms and reforms!
Palash Biswas
Alarm!Alarm!Wake up!
The Indian government has asked tax officials to apply the principle behind a tax ruling in favour of Vodafone Group Plc(VOD.L) to all similar cases, a major boost to foreign firms including Royal Dutch Shell PLC (RDSa.L). Thus,India's decision to drop a tax dispute with Vodafone Group Plc is likely to mean relief for Royal Dutch Shell PLC and others caught in similar, protracted battles, as the government tries to attract much-needed foreign investment.
Union Finance Minister of Dow Chemicals Arun Jaitley has said that US President Barack Obama's visit has helped both the countries in forging new commercial ties.He added that in the conclave of Indian and American business leaders, the CEOs exhibited a strong confidence about India and showed great interest to invest.Jaitley said that the queries of American business leaders were essentially related to the ease of doing business in India.Referring to the World Economic Forum's annual meeting at Davos last week, the Finance Minister said the investors were looking at India with greater enthusiasm.
US President Barack Obama's visit has helped forge a new commercial relationship and India appears high on the agenda of American companies flush with funds looking for investment opportunities, finance minister Arun Jaitely has said.
About a fifth of India's 1.27 billion people identify themselves as belonging to faiths other than Hinduism. Modi has warned lawmakers from his own party to stop promoting controversial issues such as religious conversions and to focus on economic reforms.But cent percent Hindutva drive is as much as intensive as the drive for reforms.
Conversion of every non Hindu and the agenda to make India free of Christians and Muslims,the Ghar Wapsi,ended th Parade in a Prod while the US President warned against Hinduization referring to Indian Constitution.
The Free Market economy might not grow on Fire.that is the aesthetics.
All the way Beast runs through! All the way reforms and reforms!
The so much so hyped success in diplomacy is exposed and the media management to project Modi as world leader results in a rare fashion statement hitherto we have not seen.Parade ends in Prod as Obama warned India against cent percent Hindutva and quoted Indian constitution.Now lo!The PM has to dismiss the foreign secretary after such a record breakthrough and having ensured billion billion Dollars for the air conditioned HAVES to intensify the economic ethnic cleansing.
Here it is.There you are!
ET reports:The government has pressed the accelerator on the reforms front, fast-tracking a faltering disinvestment programme, fixing a base price for auction of spectrum for 3G telecom services and deciding not to appeal a decision by the Bombay High Court, which had quashed a transfer pricing-related tax demand on Vodafone, keeping its promise of a non-adversarial tax regime.
It is pertinent to mention here that a government-appointed panel had recommended reforms in food subsidy and its distribution system on January 21. The recommended reforms include decentralisation of grain procurement.Just because Global credit rating agency Moody's Investor Service Thursday said the recommended reforms in food subsidy and distribution will reduce India's inflationary pressures and fiscal deficit.
"We expect (farm sector reforms)... will improve the efficiency of India's food supply chain, a credit positive because it will reduce inflationary pressures and the government's fiscal deficit, two key constraints on the sovereign's credit quality," Moody's said
Prime Minister Narendra Modi has fired India's highest-ranking diplomat and replaced her with the ambassador to the US, a day after a successful visit by President Barack Obama.In her e-mail dated January 28, Singh said that she had sought early retirement from the government service after 38 years!
just see the Times of India report:
"Government leaders, policy makers, heads of major corporations were engaging with India. Our own industrialists were attending the conferences with a renewed sense of confidence with their heads held high," he said.
India had the second largest contingent after the United States at Davos. Investor perception about India has reversed dramatically after years of stagnation.
Prime Minister Narendra Modi with US President Barack Obama at the India-US Business Summit in New Delhi, on January 26, 2015.
But he said the optimism was, however, tempered with caution. "Will India be able to deliver what it has promised? Will all these ordinances translate into law? Will the obstructionists be able to derail India's march? Many questions centered around this scepticism," he said.
He said the conclave of Indian and American CEOs during President Obama's visit exhibited a strong confidence about India.
"The desire of American businesses to invest in India was great. Their queries related essentially to the ease of doing business in India," he said.
The finance minister said both internal and external factors favour India. Decline in global crude oil prices have helped and states are competing with each other for higher growth. Andhra Pradesh chief minister N Chandrababu Naidu and Maharashtra chief minister Devendra Fadnavis were aggressively marketing their their states for investment in Davos.
"India needs more resources. Our domestic resources are not adequate. The cost of our capital is high. The world is looking to invest," the finance minister said.
"There are not too many options which are more attractive than India. Whereas most competing economies are facing serious challenges, India is promising to accelerate its growth. Hope has revisited us," he said.
Jan 29 2015 : The Economic Times (Kolkata)
After Barack, Govt Moves Like Beast on Reforms Road
New Delhi
Our Bureau
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Oks Rs 24kcr CIL sale, fixes base price for 3G, decides not to challenge Voda order
The government has pressed the accelerator on the reforms front, fast-tracking a faltering disinvestment programme, fixing a base price for auction of spectrum for 3G telecom services and deciding not to appeal a decision by the Bombay High Court, which had quashed a transfer pricing-related tax demand on Vodafone, keeping its promise of a non-adversarial tax regime.
The government on Wednesday notified stock exchanges that it would sell up to 10% in Coal India on Friday (January 30), a transaction that could fetch as much as ` . 24,000 crore, more than half the disinvestment target of ` . 43,425 crore for the fiscal year ended March 31, 2015. It has raised only ` . 1,700 crore till now. Barring the Coal India stake sale, all the other decisions were taken by the Cabinet, which met on Wednesday afternoon.
Further, the cabinet committee on economic affairs (CCEA) approved HDFC Bank's plan to raise Rs 10,000 crore capital though a rights issue. The CCEA also approved Lupin's proposal to raise the FII limit in the company to 49% from 33%, which could fetch foreign investment of Rs.6099 crore, the government said in a statement. Both proposals had already been approved by the Foreign Investment Promotion Board (FIPB).
DISINVESTMENT FAST-TRACKED
The cabinet is likely to be busy on Thursday as well as the CCEA will decide the price band for the offer for sale (OFS) of Coal India. The price band will be announced on Thursday evening and retail investors will, as is the usual practice, benefit from a 5% discount.
Coal India's share closed 0.27% up at Rs 384.05 on the BSE on Wednesday.
ET had reported on January 12 that a 10% stake sale in Coal India was imminent after the government managed to convince unions who had gone on strike protesting the disinvestment as well as a provision in the recently promulgated ordinance which could allow private companies to mine and sell coal.
"The final price would be anywhere between Rs 365 and Rs 375 per share," a person privy to the deliberations told ET. The government is likely to sell 5-10 % stakes in Power Finance Corporation and Rural Electrification Corporation once the Coal India OFS is complete.
NOT TO APPEAL VODAFONE CASE
The Union Cabinet decided not to appeal the Bombay High Court decision that had squashed a Rs 1,397 crore transfer pricing claim on telecom major Vodafone.
Bombay High Court had struck down the demand in an order in October this year.
In a statement the government said it decided not to appeal the case in the Supreme Court based on the opinions of the Chief Commissioner of Income-tax (International Taxation), Chairperson (CBDT) and the Attorney General of India.
"This is a major correction of a tax matter which has adversely affected investor sentiment," the statement said.
The decision could benefit IBM, Nokia, Cairn India, Leighton India and many others that have faced similar tax demands.
The cabinet said the government will accept orders at different fora in similar cases that have been decided in favour of the taxpayer.
"The government, led by the Prime Minister Narendra Modi, wants to convey a clear message to investors world over that this is a government where the decisions will be fair, transparent and within the four corners of the law" telecommuni cations minister Ravi Shankar Prasad told a news conference after a cabinet meeting.
The tax demand on Vodafone and other MNCs had caused consternation as the tax authorities had sought to tax equity inflows from the parent company to their Indian affiliates using transfer pricing rules, something which many tax experts say is unprecedented.
HIGHER RESERVE PRICE FOR 3G AUCTION
The union cabinet also decided to adopt recommendations by the Telecom Commission setting the base price for the 3G spectrum auction at Rs 3705 crore, significantly higher than that suggested by the telecom regulator TRAI.
At this price, the government is guaranteed of at least Rs 17,555 crore, a third of which will accrue to the exchequer in the current fiscal providing support to finance minister Arun Jaitley, who is struggling to meet the fiscal deficit target for the year.
"The estimated revenues from the auction of 2100 MHz Band are Rs.17555 crore of which Rs.5793 crore is expected to be realized in the current financial year," the government said in a statement.
The industry expressed unhappiness with the higher base price.
(Reuters) - The Indian government has asked tax officials to apply the principle behind a tax ruling in favour of Vodafone Group Plc(VOD.L) to all similar cases, a major boost to foreign firms including Royal Dutch Shell PLC (RDSa.L).
The order was detailed in a letter seen by Reuters and sent by the finance ministry to all tax officials across the country on Thursday.
India's image as an investment destination has been tarnished by a reputation for red tape, unpredictable rules and a tax office long seen as over zealous in its pursuit of foreign companies with billions of dollars of demands.
Prime Minister Narendra Modi's government, which stormed to power in May on promises it would reboot a slowing economy, has sought to change that.
Tax lawyers said they expected the government order to impact all the past and future cases involving tax on shares issued by a company to related entities -- the heart of the Vodafone case.
The order came a day after the government said it would not appeal a Bombay High Court ruling in favour of Vodafone in a long-running dispute under which the taxmen had accused a unit of the British telecoms firm of under-pricing shares in a rights issue.
"In view of the acceptance of the above judgement, it is directed that the ratio decidendi of the judgement must be adhered to by the field officers in all cases here this issue is involved," said the letter from the finance ministry, using a Latin phrase denoting the rationale behind the ruling.
The decision will also bring relief to Shell, which won a favourable ruling in the Bombay High Court in November after it challenged the largest ever claim in an Indian tax case related to transfer pricing.
Transfer pricing is the value at which firms trade products, services or assets between units across borders, a regular part of doing business for a multinational.
TAX FIGHTS
The Indian government said in 2013 that 27 companies, including units of HSBC (HSBA.L), Standard Chartered (STAN.L) and Vodafone, underpaid taxes in the fiscal year 2011/12 after they sold shares to their overseas arms too cheaply.
While latest figure on the companies facing such charges are not available, tax lawyers said tax demand worth billions of dollars have been issued in the last couple of years in transfer pricing cases to multinational as well as local firms.
Most of these cases are at various stages of litigation, they said, adding cases such as those involving IBM (IBM.N), Microsoft Corp (MSFT.O), Sony Corp (6758.T), India's Essar Group and others could now be resolved instead through negotiation.
Vodafone has been involved in a string of tax disputes in India. The Bombay High Court in October ruled in its favour in the share issue case, and the attorney general recommended the government refrain from appealing.
On Wednesday the government heeded the recommendation, just days after Finance Minister Arun Jaitley reassured investors that India would review its past, "adversarial", tax policy.
A spokesman for Shell declined to comment. IBM, Microsoft, Sony and Essar were not immediately available for a comment, while Standard Chartered and HSBC declined to comment.
IBN Live reports:
External Affairs Minister Sushma Swaraj was not in favour of "curtailing" Sujatha Singh's tenure as the Foreign Secretary of India, say sources. The sacking of Sujatha Singh, who was to retire in July, is one of the reasons of tussle between her and National Security Advisor Ajit Doval.
Sources also say in the last six months no recommendation of MEA has been accepted by Prime Minister's Office and no new ambassador or high commissioner has been appointed due to this. Sujatha Singh's case is the second major sacking after former Deputy NSA Nehchal Sandhu was shown the door.
Even as Sujatha Singh refused to comment on her tenure being curtailed, the Centre reportedly gave hints to her that she is no longer required.
Sources say Prime Minister Narendra Modi had given enough hints that he was unhappy with Sujatha Singh. She was not included in delegation-level talks during a very important foreign head's visit and on another occasion, she was not included in the delegation over working lunch.
First Post however decodes the mystery!
Three days before he was scheduled to retire and a day after the diplomatic success of US President Barack Obama's visit for Republic Day, India's envoy to the US, Dr Subrahmanyam Jaishankar, got a call from the Modi government to take over as a the nation's next foreign secretary. But the move may have been in offing for long given that Prime Minister Narendra Modi has reportedly been keen on shunting Sujatha Singh out at the earliest.
The government was characteristically tight lipped about the change of post and in its release only said that Singh's tenure that was due to end in eight months was 'curtailed' with immediate effect. Singh took charge in August 2013, and was only the third woman to hold the post. While some reports indicated she could take charge of a diplomatic mission abroad, no posting have been assigned as of now.
However, a report in the Hinduquoted government sources as saying that Singh had sought voluntary retirement and it is unclear whether her removal will spark tension with other bureaucrats in the ministry. The last time such a major change occured when Rajiv Gandhi sacked his Foreign Secretary AP Venkateswaran leading to a huge controversy and stiff protest by the Foreign Service.
SALE SALE SALE!
A month before the budget, Modi government walks the talk
8 hours ago
Pssst...the budget's coming.(Reuters/Anindito Mukherjee)
After the hugs and histrionics of US president Barack Obama's visit to New Delhi, the Narendra Modi-led Bharatiya Janata Party (BJP) government has swiftly got down to business.
Three seemingly disparate announcements from the Modi government on Wednesday (Jan. 28)—a month before finance minister Arun Jaitley presents the budget—clearly signal its intention to boost investor sentiment and plug India's yawning fiscal deficit.
Coal India stake sale
It's been a little over 20 days since more than 500,000 employees of Coal India Limited (CIL) staged one of the largest industrial actions since 1977 to protest against the government's decision to partly divest its stake in the mining company.
But on Jan. 28, the government announced that it was going to sell 10% stake in the company to raise Rs24,000 crore ($4 billion).
The government owns 90% stake in CIL and this sale alone will meet 40% of the annual disinvestment target—Rs58,425 crore ($10 billion)—that the new government had set for itself in its interim budget in July 2014.
Among the largest coal mining firms globally, CIL accounts for 80% of the coal production in India. Last fiscal, the company posted a net profit of Rs15,008 crore ($2.5 billion).
But the coal sector has been roiled by regulatory issues in recent months, even as demand for the fuel has steadily increased. In Aug. 2014, India's Supreme Court had cancelled as many as 214 coal block allocations to companies and the government is in the midst of reallocating the blocks.
The government has been talking of divesting in CIL since September last year, but protests by its employees had forced the government to delay the process, which in the meantime eroded the company's share price by as much as 14%.
3G spectrum sale
On Jan. 28, the Indian government also fixed the base price for selling 3G spectrum in the country.
"The Union Cabinet, chaired by the prime minister, has approved the proposal of the department of telecommunication (DoT) to proceed with auction in 2,100 MHz band along with 800, 900 and 1,800 MHz bands. The reserve price approved for 2,100 MHz band is Rs3,705 crore ($600 million) pan-India per MHz", the government said in a statement.
The auctions are scheduled for March 4.
The government in January this year also set the reserve price for the auction of 2G spectrum—in 800 MHz, 900 Mhz and 1,800 MHz bands, which is expected to fetch the government Rs64,840 crore ($10.5 billion).
As India's finance minister looks to bring down the country's fiscal deficit to 4.1% of the gross domestic product, an additional Rs16,000 crore ($2.6 billion) from 2G spectrum sale and Rs5,793 crore ($900 million) on 3G airwaves is expected to flow in before the end of the financial year. The remaining amount from the sale will come in subsequently.
India's telecom sector has been in a mess for the past few years with heavy competition and lack of spectrum availability. The government controls the spectrum, which it often auctions out to private telecom operators. In February last year, it had raised over Rs60,000 crore ($9.8 billion).
In Feb. 2012, the Supreme Court had cancelled 122 licences granted to 11 mobile operators, for 2G licences, after it found that the government had incurred massive loss by not auctioning them.
Vodafone tax dispute
The Modi government has also decided not to appeal against a verdict by the Bombay high court, which ruled that the British telecom company Vodafone was not liable to pay tax of Rs3,200 crore ($490 million) in a transfer pricing case.
"I have publicly said I am against adversarial taxation. Currently, I am in the process of making (the) budget and I have seen that I have not earned a single rupee from all those contentious cases. All I have got is bad image and no money," finance minister Jaitley said in Davos recently.
India's income tax department had claimed that Vodafone undervalued its shares in its Indian subsidiary while transferring them to the parent company in 2010, and was asked to pay additional income tax in 2012.
"The government, led by the prime minister Narendra Modi, wants to convey a clear message to investors world over that this is a government where the decisions will be fair, transparent and within the four corners of the law," telecom minister Ravi Shankar Prasad said on Jan. 28.
Last November, the Indian arm of Royal Dutch Shell also won a $1.4 billion (Rs8,656.55 crore) tax dispute at the Bombay high court.
All together, it is an indication that this might be the end of a short-lived but damaging era of "tax terrorism" that began after the previous Manmohan Singh government, in 2012, introduced a retrospective tax amendment, allowing it to scrutinise cross-border deals going back to 1962.
Obama Disses Religious Liberties in India
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Foreign media cautions India against US intentions!
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