The second phase of reforms was expected to address areas like extending 'national treatment' to foreign banks, which means that foreign banks would be treated on a par with Indian ones under the World Trade Organisation agreement. Other items that are to be considered include permitting listing foreign banks' wholly-owned subsidiaries in India and the acquisition of sound Indian banks by foreign banks.
After sharing the losses of state-owned fuel oil retailers, upstream producers may also have to pay income tax on the burden they take on their books.
After Vodafone, UK-based Vedanta Resources Plc and Aditya Birla group firm Indian Rayon also face a potential tax demand of around Rs 900 crore and Rs 45 crore, respectively, for their failure to deduct taxes on payments to buy Indian assets, said a senior government official.
Faced with the prospect of missing the direct tax collection target because of the economic slowdown, the Income Tax department has sharply increased fresh tax demands to Rs 1,24,000 crore from companies and individuals in the current fiscal, a 130 per cent increase over fresh demands raised last year.
After the Satyam scam, the role of chartered accountants has come into focus again. This time the Income Tax Department has found that CAs have given false certificates, enabling Non-Resident Indians and foreign nationals to evade taxes in India.
Though the states might lose because of providing tax credit on input, they will also gain by way of taxing services. At present, only the Centre taxes around 100 types of services. Thus, the actual losses states might incur cannot be estimated until the GST is implemented.
In a note, titled 'IIFCL financing for PPP projects,' sent to Prime Minister Manmohan Singh, Ahluwalia wrote, 'It was pointed out in the meeting that the term of the current CMD (chairman and managing director) of IIFCL ends on March 10. The FS (finance secretary) had indicated that the term can be extended. Action on this front should be expedited to avoid loss of momentum.'
Though CST is a central tax, the entire collection, estimated at Rs 250 billion per year, goes to the states. CST was to be cut to 1 per cent from April this year before its phase-out; from April 1, 2010, the country will transit to a uniform goods and services tax regime. "It was recommended by the empowered committee of state finance ministers that the CST rate of 2 per cent should continue until GST is implemented," said a source familiar with the development.
GST, which will replace almost all central and state taxes, could have two components of 8 per cent each -- one will go to the Centre and the other to the states, according to sources familiar with the talks between the Centre and the states. However, it will not cover tax on petroleum products and Customs duty.
The 'golden share', which will be owned by the government, will ensure that it has a say in all major decisions taken by the private concessionaire. It will also obviate the need for the government to invest in the equity of the company. The proposal has been mooted by the Planning Commission in the new model concession agreement that it has developed for the infrastructure sector. The agreement has been circulated among various stakeholders for consultation.
Serious Fraud Investigation Office joins multi-agency probe.
The Income Tax department is likely to include eight other related firms for its investigation into the possible tax evasion by Satyam.
PricewaterhouseCoopers, an advisory and consulting firm whose sister company audited the accounts of Hyderabad-based Satyam Computer Services, has a chequered past with Indian tax authorities, having admitted its "mistake" in at least two cases of tax evasion.
The economic slowdown has taken off the road nearly a quarter of the total trucks in the country. In fact, the number is as high as 80 per cent in the mining belts of Karnataka, Orissa and Chhattisgarh.
The higher tax paid by the banks comes in overall 22 per cent decline in advance tax collections in the third installment that was due by December 15. He said BoB is not revising the revenue and profit targets for the 2008-09 fiscal, despite overall slowdown affecting the economy, which is projected to grow at less than 7 per cent in the second half.
Inadequate funding and non-viability of some projects have forced several leading infrastructure development firms to stay out of bidding for over 13 highway projects worth over Rs 12,500 crore (Rs 125 billion).
The government is likely to revise downwards indirect tax collections target for the current financial year by at least Rs 20,000 crore.
During a verification of electronic returns, the department found that as many as 1,714 taxpayers under the self-assessment scheme (where tax-payers determine their tax liability and pay accordingly) had not paid their tax dues. In a few cases, the amount due was around Rs 100 crore (Rs 1 billion). The government made it compulsory for companies to file their returns online from 2006.
Secretaries' panel fails to arrive at a decision. Sources told Business Standard the commerce ministry felt that the delay would add to the cost for the government as more and more factories could shut shop.
The meeting comes ahead of a fresh stimulus package aimed at sectors not covered in the earlier measures announced by the central bank and the government.
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