As many as seven chief ministers have joined a chorus of disapproval against the National Counter-Terrorism Centre (NCTC), which the Union government notified earlier this month. The United Progressive Alliance, or UPA, has argued that the action flows from powers already in the existing unlawful activities statute.

Federal fears

Business Standard

The central government&rsquo;s tax revenue has not been buoyant since the global economic crisis. The graph shows that when direct and indirect tax revenues are added up, the total has declined in terms of gross domestic product (GDP) since 2008-09. The low performance becomes clearer in table-I, which calculates the buoyancy of tax revenue, defined as the percentage of tax revenue change as a ratio of the percentage of change in GDP. Thus, it is a concept that adjusts for the decline (or increase) in GDP reflecting the crisis. It reports the buoyancies of various taxes in three segments: 2005-08 before the crisis, 2008-10 during the crisis, and 2010-11 post-crisis. What one observes is the decline in buoyancies of taxes during the crisis. The recovery thereafter reflects the low revenue base on which 2010-11 buoyancies are calculated.

Parthasarathi Shome: A time for tax reform

Independence of statutory auditors has received attention of researchers and regulators for ages because independence is the cornerstone of statutory audit. Stakeholders rely on auditor&rsquo;s opinion because it is unbiased and based on professional judgement of someone who is capable of forming a judgement on the issues covered in the audit report. Therefore, laws are formulated to protect the independence of statutory auditors. Oversight and disciplinary mechanisms are strengthened, penalties are imposed for audit failures, environment is created to reduce subtle pressure on audit independence by introducing mechanisms such as rotation of the auditor and prohibition on offering non-audit services, and mechanisms are created to protect audit independence by creating institutions like the audit committee. Even after introduction of such elaborate mechanisms, the concern for audit independence persists.

Will appointment of auditors by regulators enhance independence?

The sales taxability of transactions relating in the course of import and export has been the subject matter of intense judicial scrutiny, particularly due to exemption from the tax granted to transactions under the Central Sales Tax Act, 1956 (&ldquo;CST Act&rdquo;).

SC decides on taxability of sales from bonded warehouses

IN order to protect sandalwood and its rare varieties found only in south India, the &lsquo;green bench&rsquo; of the Supreme Court last week passed several directions to the central government. According to one of them, the government shall take steps to include Red Sanders, which has medicinal properties and is in high demand abroad, in Schedule VI of the Wild Life Protection Act. This will make it an endangered species. It also asked the government to consult the wild life board and take a decision within six months whether sandalwood could be notified as a protected species. The court heard the Indian Sandalwood Association and the Sandalwood Oil Manufacturers Association raising some objections to the move, but Andhra Pradesh, Karnataka, Kerala and other sandal-producing states wanted restrictions on the felling of the trees.

Sandalwood trade in the dock

The visit of the delegation of Indian businessmen to Pakistan under the leadership of Anand Sharma, commerce minister, is a landmark event that can lead to a series of small steps over a period to increase the trade between the two countries.

More trade with Saarc is a must

India is set to be an economic powerhouse. We have talent, world-class education and a growing breed of entrepreneurs that&rsquo;s set to put the country on the world map. While already benefiting from support from government and private players, more focused investment could help the Indian economy grow leaps and bounds. In the internet economy, where Flipkart operates, this phenomenon is already making its presence felt.

A uniform tax regime would help us scale up much faster

The Union Budget 2012 is expected to introduce Controlled Foreign Companies (CFC) provisions. The intent is to tax passive income earned by a foreign company even if it is not repatriated or distributed to the controlling shareholders.

Controlled foreign firms: Is this last resort?

The issue of taxability of 'offshore supply price' was settled by the Apex Court in the case of Ishikawa [288 ITR 408] wherein it was held that 'the entire transaction having been completed on the high seas, the profit on sale did not arise in India'. The Apex Court also observed that 'once the transaction relating of offshore supplies is excluded from the scope of taxation under the IT Act, the application of double taxation treaty would not arise.

Offshore supplies are tax free 

The recent attack on an Israeli diplomat&rsquo;s car, in what is supposedly the most secure part of New Delhi, has raised questions as to whether India&rsquo;s West Asia policy is sustainable. That policy has been fairly clear-cut till now. Israel is a major defence partner, and it co-operates closely with Indian security in counter-terrorism and technological matters.

A false choice

Just as Air India was receiving a debt recast plan that defies all financial prudence, or indeed logic, the newspapers were filled with splashy advertisements commemorating the centenary of civil aviation in India.

Flying unfree 

Brotin Banerjee is MD and CEO, Tata Housing

The government is trying to provide the requisite stability to the economy, but now it also needs to focus on strengthening the real estate sector. This is important in view of the fact that the construction sector is the second-largest employer, next only to agriculture, and growth in the sector has a direct impact on ancillary industries like steel and cement. The sector creates a ripple effect in the market and helps push the economy.

There's need for a real estate regulator to ensure fair play

General Anti Avoidance Rules, or GAAR, is a broad set of rules empowering the revenue authority to examine an arrangement and to disregard it if it is found to have been entered into with the main object of obtaining tax benefit and has features such as non-arm&rsquo;s length dealing, abuse or misuse of tax law and lacking in substance or bona fides. It is anticipated that the recent Vodafone ruling, among other factors, may prod the government to hasten the introduction of India&rsquo;s legislative GAAR. Concern has been expressed on the unduly wide scope of GAAR provisions originally proposed in the Direct Taxes Code Bill. It is feared that the enactment of these provisions may create uncertainty about tax implications of many business and non-business arrangements and generate litigation.

Just around the corner?

Europe seems to be obsessed with austerity. Country after country is being forced by either the financial markets or the European Union (EU) to start cutting its public sector deficit. And, as if this were not enough, 25 of the 27 EU member states have just agreed on a new treaty (called a &ldquo;fiscal compact&rdquo;) that would oblige them never to have a cyclically adjusted budget deficit of more than 0.5 per cent of GDP.

Daniel Gros: Answering attacks on austerity

In the 1965 conflict with Pakistan, Vijay Oberoi, a young army captain from the Maratha Light Infantry, was shot through the thigh in a gunfight with Pakistani raiders in Kashmir. Bleeding profusely from a severed artery, Oberoi was brought to hospital; his life was saved but his leg amputated. In 2001, Lieutenant General Vijay Oberoi retired as vice-chief of army staff, having soldiered on for 36 years with an artificial leg.

Ajai Shukla: MoD's farewell to welfare

The Supreme Court judgment cancelling 122 2G licences plunged the telecom industry into crisis. It is now incumbent on the government to utilise that crisis as an opportunity for reform. It must act sensibly, transparently and with due speed to restore institutional credibility to a sector suffering from a severe deficit on that front. While the release of the new telecom policy was a step forward, recent reports that the government has consulted its lawyers on the legality of licences issued prior to 2008 are worrying. This is not the time to play politics or shirk responsibility. After all, a post-judgment road map exists: delink spectrum from licences. Charge a relatively nominal amount for licences, (while imposing technical qualification norms). Auction off spectrum, allowing the market to price this resource.

Calling the future

Vice-President Xi Jinping of the People&rsquo;s Republic of China visited the United States last week, in a trip that bore all the characteristics of a state visit. The pomp underlined the fact that Mr Xi is widely expected to take over as China&rsquo;s leader soon.

A princeling's progress

Whether the Sick Industrial Companies Act (SICA) has done more good than harm is an existential question that is difficult to answer. One view is that malingerers invoke it more often than those who need restorative or palliative care. For this reason, there was an attempt to repeal the Act in 2003, but it had a miraculous escape since the law to rescind it was allowed to lapse. Thus, the twice-born Act has continued to provide even more litigation that seems to be one of the main reasons for its existence.

M J Antony: Firms on the rock

The economic reputation of this government is in tatters because of the damage to the investment climate and the real sector from the spate of corruption scandals, the deterioration of governance, and the sense of drift over these last few years. But by bequeathing a sound fiscal legacy, that reputation can still be salvaged. And you are the one person who can salvage it.

Arvind Subramanian: Mr Mukherjee's grand bargain

A Union Budget in March is a rare occurrence. Except in years when general elections are held, the Union government&rsquo;s annual Budget is usually presented on the last working day of February. For parliamentarians, Saturdays are counted as working days. So even when February 28 or 29 happens to fall on a Saturday, the Union Budget for the following year is presented on the weekend.

A K Bhattacharya: The Budget week of March

Robert Zoellick will depart in June as president of the World Bank, once again raising the thorny issue of leadership of the Bretton Woods twins (the Bank and the International Monetary Fund, or IMF). At their birth, John Maynard Keynes memorably warned that if these institutions did not get good leaders they would &ldquo;fall into an eternal slumber, never to waken or be heard of again in the courts and markets of Mankind.

Devesh Kapur & Arvind Subramanian: Who should lead the World Bank?

Business Standard brings you expert opinions on various issues

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