Value Added Tax is widely believed to be a tax which is not so evasion prone because of the audit trail that it creates. However, this audit trail is not so much easy to pursue mainly because of very voluminous records of input credit that are to be checked. Unless it is supplemented by action on the basis of intelligence reports, merely routine check of documents do not reveal the misuse of input tax credit resorted to by the manufacturers and dealers.

Duplication in input tax credit major source of misuse in VAT

Business Standard

A new year is upon us. The financial sector is reported to be all set for a material development this year. The Financial Sector Legislative Reforms Commission (FSLRC) is expected to be finally set up this year.

Fin sector reforms panel has its task cut out in '11

The Supreme Court has admitted that a 1976 verdict by it endorsing Emergency had violated Fundamental Rights of a large number of people in the country. A majority decision of a five-member Constitution bench upholding the suspension of fundamental rights during Emergency in the ADM Jabalpur Vs Shivakant Shukla case (1976) was &quot;erroneous&quot;, a bench of Justices Aftab Alam and Asok Kumar Ganguly in a judgement.

Verdict 'violated' Fundamental Rights during Emergency: SC

Press Trust of India

The Supreme Court (SC) has dismissed a batch of nearly hundred appeals moved by the Commissioner of Income Tax against the decisions of various high courts and other appellate authorities raising an important question on taxation. The question revolved on the question how advance tax has to be computed when the assessee has Minimum Alternate Tax (MAT) credit. In other words, whether MAT credit admissible in terms of Section 115JAA of the Income Tax Act has to be set off against the tax payable (assessed tax) before calculating interest under Sections 234A, B and C. There was no dispute in regard to eligibility of the assessee companies for set-off of tax paid under Section 115JA. The dispute was only in regard to priority of adjustment for the MAT credit.

SC dismisses I-T department appeals on MAT credit set-off

If the last year was marked by the Supreme Court raising grim questions on corruption, food security and future of environmental litigation, the court is expected to provide some answers to those momentous concerns this year. Therefore, the coming months could be exciting for observers of the courts.

M J Antony: Hot-button answers

Shivraj Puri&rsquo;s official designation was Relationship Manager at Citibank&rsquo;s Guragon branch. Conventional wisdom has it that a relationship manager&rsquo;s primary job is to get high net worth clients for the bank, convince them to invest their money with the bank and keep the relationship going.

Shyamal Majumdar: Relationship mis-managers

The film Social Network may be a fictional or realistic account of the creation of Facebook.

Madhukar Sabnavis: Intellectual property

Facebook&rsquo;s Mark Zuckerberg. You&rsquo;ll discover he is about &ldquo;openness, making things that help people connect and share what&rsquo;s important to them, revolutions, information and minimalism&rdquo;. He&rsquo;s also a top class wealth creator because the social networking site where we post trite comments on our moments big and small, holidays good and bad, aggravations and jubilations is suddenly worth $50 billion. At least, to Goldman Sachs that forked out $450 million for a sliver of it. It could be worth much more to the high-net-worth clients , who are next in line and desperate for a piece of Facebook. And even more, to others who are not part of the velvet club, but in the snaking queue.

Keeping it private

The marketplace itself being a monopoly is a delicious irony. It&rsquo;s one that the Bimal Jalan committee&rsquo;s brilliant report gets. Unfortunately, most critics don&rsquo;t.

Vivek Oberoi: This marketplace is a monopoly

He was once the Congress&rsquo; Great White Hope. Having left rivals like Kamal Nath far, far behind and even edged past once-mentor Arjun Singh, Digvijay Singh was the sort of Congressman Sonia Gandhi wanted all her party members to be. Patrician, sophisticated, a Doon School alumnus, Singh showed the way at a time when the Congress&rsquo; fortunes in the rest of India were decidedly on the skids. He ruled as chief minister of undivided Madhya Pradesh for seven years (1993-2000); and truncated MP for another three (2000-2003). As chief minister, he supported bureaucrats to develop e-governance (it may be passe now, but Madhya&rsquo;s Pradesh&rsquo;s experiments with the Internet in the mid-1990s, especially in Dhar district, were hailed the world over) and secured land rights for Dalits and rights for women.

Aditi Phadnis: A confusing beacon

One of the pleasures of eating out in Delhi is access to a lot of good regional food because of the large immigrant and expat population. Here&rsquo;s a look at three local examples.

The local edge

Trades and investments are based on incomplete information. It&rsquo;s impossible to identify, let alone track all the variables influencing asset prices. Even if you somehow &ldquo;knew&rdquo; everything, you&rsquo;d still have to guess the responses of other market actors.

Operate within your comfort zone

Confusions and rumours are over. Salman Khurshid, Minister of State for Corporate Affairs, recently announced that India will adopt a new set of accounting standards, which are fully convergent with IFRS, from april1, 2011. Compliance with new accounting standards will significantly change the accounting practices in India and will align Indian accounting practices with global accounting practices. This will enhance the confidence of investors in financial statements issued by Indian companies.

IFRS, Auditing Compliance to change accounting practices

The issue for consideration is whether Wealth Tax is payable on the shares of foreign companies held by Indian companies or other Indian entities? The existing scheme of Wealth Tax is that the shares of companies are not liable to Wealth Tax, being outside the definition of assets in the Wealth Tax Act. Accordingly, shares of companies &ndash; whether such companies are Indian companies or foreign companies will be outside the purview of Wealth Tax levy.

Is wealth tax payable on foreign equity?

The Supreme Court last week set aside the ruling of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and quashed the levy of anti-dumping duty imposed under a notification dated April 27, 2005. The order was passed in the appeal case, Automative Tyre Manufacturers Association vs Designated Authority (DA).

Anti-dumping duty on tyre manufacturers quashed

Now that we are in the new year, and the Budget is less than two months away, there is a flurry of activity with regard to finalising and submitting pre-budget memoranda on the part of the several chambers of commerce and industry/trade associations. The distinctive feature in this particular year 2011 is that the Budget will necessarily be seen as a precursor to the Direct Tax Code and the GST, both of which are scheduled for implementation by no later than a year&rsquo;s time from now.

Could Budget '12 have signals on service tax

There is nothing sinister or diabolic about Union minister Kapil Sibal&rsquo;s latest argument regarding the findings of the Comptroller and Auditor General (CAG) of India pertaining to the loss to the exchequer from 2G telecom licences in 2007. The basic argument pertaining to the erroneous notion of &ldquo;presumptive loss&rdquo; has been made before and Mr Sibal&rsquo;s arithmetic is credible. Too much need not be made about this being a ministerial affront to a constitutional body.

Mr Sibal's arithmetic

Sometimes stating the obvious with charts and numbers helps. Just as the Justice Rajinder Sachar committee helped focus public attention on a well-known fact, namely the economic and educational backwardness of Muslims in most of northern and eastern India, the Justice Sri Krishna Committee (SKC) report has revealed the obvious, namely that the Telangana region of Andhra Pradesh is not as badly off as so many protagonists of the separate Telangana movement, including some well-known economists, claimed. Simple numbers tell a tale. In the forty years since the first separate Telangana agitation of 1969, this region has done well for itself, especially when compared to the really more backward Rayalaseema region. Why then did the agitation launched by Telangana Rashtra Samiti (TRS) leader K Chandrashekhara Rao in 2001 catch on? Partly because a desperate Congress party breathed life into it to bring down the Telugu Desam government of Chandrababu Naidu.

If not SKC, then an SRC

In seeking the soul of the Telugu-speaking people, the heart and mind of the Sri Krishna Committee are conflicted. The Committee for Consultation on the Situation in Andhra Pradesh, chaired by Justice Sri Krishna (Report at: www.mha.nic.in/pdfs/CCSAP-REPORT-060111.pdf), has prepared a balanced and wise report. In a short ten months, the members of the committee have been able to secure a grasp on the pulse of the people of Andhra Pradesh, but their soul remains elusive.

Sanjaya Baru: In search of the soul of Telugus

The Report on the Ownership and Governance of Market Infrastructure Institutions submitted by the Committee headed by Bimal Jalan, the former Reserve Bank of India governor, is an important document. In a quiet way it has suggested a blueprint for the future regulatory architecture of the securities market. Whether one agrees with all or some of the recommendations is a different matter and the extent to which the recommendations are implemented by the securities market regulator remains to be seen.

Pratip Kar: Should a stock exchange also be a regulator ?

The question raises fundamental issues about the MGNREGA&rsquo;s centralised template and poor delivery mechanism, but it is important to provide a legal basis to its wage structure to protect it against inflation.

Should the rural job guarantee scheme be linked to minimum wages?

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