IWT brings India and Pakistan back to round table

India has favourably responded to Pakistan’s invitation to attend the meeting of Permanent Indus Commission (PIC) in March in Lahore. World Bank officials played catalyst and mediator to bring the two hostile neighbours to table after two months of rigorous diplomatic negotiation.

Following Uri attacks Indian Prime Minister Narendra Modi wanted to “review” the Indus Water Treaty, following consultation with National Security Adviser Ajit Doval and Foreign Secretary S. Jaishankar. “Blood and water cannot flow together,” said Modi on September 27.

Pakistan has repeatedly cried foul over two hydro-electric projects one over Jhelum and another over Chenab. The Kishenganga Project, on Jhelum has to have an installed capacity of 330MW, whereas the Ralte Project in Doda over Chenab will have 850MW. But, India continue to maintain that the projects do not violate IWT clauses.

World Bank experts Ian Solomon and then Ms. Georgieva visited both countries and met Mr. Arun Jaitley and his Pakistani counterpart Mr. Ishaq Dar. Both leaders were convinced that this matter should find a place on the table during talks in March by the experts.

This can mark a beginning in dialogue again between the nations which had become non-existent post terror attack in Uri.

Sources: The Hindu LiveMint

Image Source: Reuters

Panel submits fiscal year amendment report to Finance minister

With a view to move away from the current accounting period, a high-level committee formed by the government has submitted its report to the office of Finance Minister Arun Jaitley according to a report in the Financial Express.
Headed by the former Chief Economic Adviser Shankar Acharya, the committee was set up in July this year to examine the viability of shifting away from the 150 year old colonial practice of April 1 to March 31 towards a single calendar year – January 1 to December 31.
According to a source, the committee has given the various advantages and disadvantages of the switch in fiscal periods. This report will be made public by the finance ministry shortly.
One such reason given in favour of the shift is that the June-September monsoon begins two months into the new financial year, and hence policy-making is ill-timed as reported by The Hindustan Times.
The report has also given grounds for the change and the impact on various sectors in the country including agriculture crop periods, businesses, taxation and the procurement of statistics and data.
The NITI Aayog is also said to be in favour of this change. It would bring about amendments in numerous statues and tax laws if implemented.
Image Source – Shutterstock

Political Parties WILL be under Income Tax scrutiny : Arun Jaitley

 

Saturday, December 17: Union Finance Minister Arun Jaitley denied the accusation on the government for granting tax exemptions to political parties after demonetisation on Saturday. He termed such statements as ‘false’ and ‘misleading’.

In a statement released by the Finance Ministry, he clarified that the Taxation Laws (Second Amendment) Act, 2016, which recently came into force, is applicable on political parties too.  They will have to submit the audited accounts and details as per Section 13A of I-T Act, 1961.

Jaitley justified that parties can deposit the old scrapped currency in their respective bank accounts till December 30, just like the common man. They will also have to explain the source of the income deposited. Additionally, they will be liable to query by the Income-tax Authority in case of discrepancies.

Political parties have to maintain a record of the name and address of contributors above Rs 20,000. This amount shall be deducted from the deposits during verification.

The announcement came as a backlash to the media, as Jaitley asked the fourth estate for a thorough research before accusing the government. He said, “There is no question of sparing anyone, no political party is given special tax treatment.”

The clarification came after the Central Board of Direct Taxes reported that political parties won’t be scrutinized for tax return.

SOURCES: TOI, The Indian Express

Government Announces Measures to Push for Digital Payments

On December 8, a month after the demonetisation of Rs 500 and Rs 1000 notes was announced, the Finance Ministry has come out with a number of measures that are intended to promote digital payments. This is the latest effort by the government to move towards a cashless economy.

Finance Minister Arun Jaitley announced a total of eleven measures in a statement that was released today. According to The Times of India, the minister said that people using credit or debit cards, e-wallets and mobile wallets on purchases of petrol or diesel would be able to avail of a 0.75 per cent discount. Further, there will be a 0.5 per cent discount for those buying monthly seasonal tickets in suburban railway networks using digital modes.

This measure will come into effect on January 1, 2017, reported The Indian Express. Along similar lines, those buying railway tickets digitally will receive insurance cover worth Rs 10 lakh; there will be also be five per cent discount on digital payments for railway facilities like catering and retiring rooms.

According to Livemint, service tax on payments worth less than Rs 2000 will be waived off. The government departments will also be bearing the cost of all the discounts announced on transaction fees and merchant discount rates (MDR) charges. Jaitley also announced more measures to enable and ease digital transactions within rural areas.

Livemint reported that the Finance Minister has also said that there had been a visible switch to digital modes of payments since the government’s decision to ban Rs 500 and Rs 1000 notes.

 

Sources: Times of India, The Indian Express, Live Mint

Waiver on card transactions up to 2K

The union government today announced that it was waiving off service tax chargeable on debit or credit card transactions to the tune of Rupees 2,000 according to a report in The Economic Times.

This is being done in a effort to encourage digitalising of transactions across the country in the light of the recent demonetisation of high currency notes which occurred exactly a month ago.

While new notes have been introduced to replace the above, Finance Minister Arun Jaitley did acknowledge that there was a lack of currency around the nation according to The Hindu.

This decision was taken by notification that will be tabled by Jaitley in Parliament and will amend a 2012 notification which limited services exempt from tax.

According to the same notification, a number of other services are also exempt from the levy such as trade unions, sports bodies and testing of newly developed drugs among others.

The Reserve Bank of India has also made going through a two-factor authentication for payments online optional(once again unto the amount of Rupees 2,000.)

This will allow users to chose to bypass a one-time password for such transactions.

SOURCES: The Economic Times, The Hindu

Image sourced from The Indian Express

Healthy growth rate ahead, GST on track; assures Jaitley

Arun Jaitley at Petrotech, 2016 heaped praise on Prime Minister Modi for implementing demonetization, whose fruitful effects will be borne by the economy in the future, albeit with some short-lived pain. He further mooted that this policy would strengthen the banking system of the country as more high money transactions will come under taxation.

This mega move is supposed to establish a cleaner economy with a better GDP in the upcoming fiscal quarters. Jaitley said that this move is the stepping stone for a macro vision of the policy makers, while other major reforms are queued up.

He also took a dig at the opposition for continuously disrupting the procedures of the parliament, in spite of the PM being present to hold a debate. He said,” I have got an audience here, unlike in parliament, where you don’t get an audience.”

He admitted that with GST, cross-empowerment issue which deals with the proportionate distribution of tax between central and state authorities is still hanging in the air. But he remained confident that all “political logjams” will be successfully negotiated and GST will roll out as per schedule.

SOURCES : Economic Times , New Indian Express

Image Source : TOI

India reduces wheat import to zero percent

On December 8, Finance Minister Arun Jaitley tabled a notification in Lok Sabha which stated that with immediate effect, the import duty on wheat will be reduced to 0 percent from 10 percent without an end date.

The tabled notification’s aim was also to further amend the March 17, 2012 order. The Government’s decision aims to improve domestic availability as rising prices, fear of shortage and depleted stocks prevail. There is also a concern regarding the Indian Meteorological Department’s forecast of a warmer winter.

Consumer Affairs Secretary Hem Pande, however, added , “We had recommended long back to bring down the import duty on wheat. There is some increase in retail prices of wheat and wheat flour. The move should increase local supplies and curb price rise.”

In September the Government had reduced the import to 10 per cent from earlier 25 percent. So far the imports of private traders have crossed 1.72 million tonnes (mt) and the total in-bound shipments are estimated to cross 2 million tonnes this year.

Doubts have been raised regarding the agriculture ministry’s pegged output of 93.50 mt even as the domestic output in 2015-16 crop years has been 86 mt. Farmers claim that the move will make it hard for them to buy fertilizers and seeds and it will also disrupt the planting of the crops. Officials, meanwhile, claim that planting is ahead of schedule and to boost credits to farmers, steps have been taken.

Farm ministry spokesperson was unavailable for immediate comments.

SOURCES : Livemint , New Indian Express

Image Source : Getty Images