09, January 2017

1.Anti-avoidance tax rule to kick in from April 2017

Source: The Hindu

In its 2016 year-end review, the Central Board of Direct Taxes, which is the apex policy making body of the I-T department, listed its major achievements.

Legislation against tax avoidance, GAAR, will kick in from April 1, 2017, the tax department.

Key facts:

Major achievements of CBDT in the current financial year 2016-17 so far include, among others, Enactment of The Benami Transactions (Prohibition) Amendment Act, 2016, Implementation of The Direct Tax Dispute Resolution Scheme, 2016 and of GAAR from Assessment Year 2018-19.

  • General Anti-Avoidance Rule (GAAR) was part of the 2012-13 Budget speech of the then Finance Minister Pranab Mukherjee to check tax evasion and avoidance.
  • However, its implementation was repeatedly postponed because of the apprehensions expressed by foreign investors.
  • GAAR, which was originally to be implemented from April 1, 2014, will now come into effect from April 1, 2017 (Assessment Year 2018-19).
  • It contains provision allowing the government to prospectively tax overseas deals involving local asset

There have been fears that the government may use it to target P-Notes. Through the use of GAAR, government may try to tax P-Notes as indirect investments, which could attract a tax rate of up to 15 per cent, experts say.

  • To avoid tax altogether under GAAR, an investor may have to prove that P-Notes were not set up specifically to avoid paying taxes.
  • The main purpose of GAAR is to prevent tax evaders from using Mauritius or other tax heaven routes for investments or using double taxation treaties to avoid tax.

The committee, which is headed by Director General of Income Tax (international taxation), looked into the concerns of the investors and came out out with draft guidelines to seek comments of the stakeholders.

Background:

Finance Minister Arun Jaitley had in his Budget speech in 2015, deferred GAAR implementation by two years and also said that the investments made up to March 31, 2017 shall not be subjected to GAAR, which was to be applied on those claiming tax benefit of over Rs. 3 crore.

P- Notes:

Participatory Notes commonly known as P-Notes or PNs are instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India – SEBI.

  • The board of Sebi, tightened norms to check any misuse of controversy-ridden P-Notes by making it mandatory for users of these overseas instruments to follow Indian anti-money laundering law and report any suspicious transactions immediately.

2.MUDRA loan disbursals take a hit due to demonetization

Source: Indian Express

Loan disbursals by Micro Units Development and Refinance Agency (MUDRA) slowed down in the third quarter of current financial year following the demonetisation of high-value currencies.

MUDRA:

The  Micro Units Development & Refinance Agency Ltd (MUDRA) was set up by the Government of India (GoI). MUDRA has been initially formed as a wholly owned subsidiary of Small Industries Development bank of India (SIDBI) with 100% capital being contributed by it.

  • Presently, the authorized capital of MUDRA is 1000 crores and paid up capital is 750 crore, fully subscribed by SIDBI. More capital is expected to enhance the functioning of MUDRA.
  • This Agency would be responsible for developing and refinancing all Micro-enterprises sector by supporting the finance Institutions which are in the business of lending to micro / small business entities engaged in manufacturing, trading and service activities.
  • MUDRA would partner with Banks, MFIs and other lending institutions at state level / regional level to provide micro finance support to the micro enterprise sector in the country.
  • Non-Corporate Small Business Sector (NCSBS) is the economic foundation of India. It is perhaps one of the largest disaggregated business ecosystems in the world sustaining around 50 crore lives.
  • The sector comprises of myriad of small manufacturing units, shopkeepers, fruits / vegetable vendors, truck & taxi operators, food-service units, repair shops, machine operators, small industries, artisans, food processors, street vendors and many others.
  • They are largely self financed or rely on personal networks or moneylenders. Addressing this need will give a big boost to the economy otherwise this segment would remain unfunded and a portion of the productive labour force would remain unemployed.

Under the aegis of Pradhan Mantri MUDRA Yojana (PMMY), MUDRA has created three products i.e. ‘Shishu’, ‘Kishore’ and ‘Tarun’ as per the stage of growth and funding needs of the beneficiary micro unit. These schemes cover loan amounts as below:

Shishu: covering loans up to ₹50,000

Kishore: covering loans above ₹50,000 and up to ₹5,00,000

Tarun: covering loans above ₹5,00,000 and up to ₹10,00,000

3.SC wants paper trail in EVMs for fair poll

Source: The Hindu

The Supreme Court has reiterated the necessity to implement the Vote Verifier Paper Audit Trail (VVPAT) in electronic voting machines (EVMs) to ensure 100% transparency in elections.

  • This is the second time the Supreme Court has directed Election Commission (EC) for the implementation of VVPAT in EVMs.
  • Earlier in 2013, SC had directed the EC to introduce VVPAT in a phased manner for 2014 general elections.
  • SC had observed that VVPAT will ensure free and fair polls and help in sorting out disputes. In response the EC had informed the apex court that the VVPAT can be introduced in a phased manner.

VVPAT:

The VVPAT system is a new initiative of the Election Commission to ensure free and fair elections.

In the VVPAT system, when a voter presses the button for a candidate of his choice in the electronic voting machines (EVM), a paper ballot containing the serial number, name of the candidate and poll symbol will be printed for the voter.

It is intended as an independent verification system for EVM designed to

  • Allow voters to verify that their votes are casted correctly,
  • Detect possible election fraud or malfunction and
  • Provide a means to audit the stored electronic results.

Bringing transparency in electoral process and preventing malpractices is one of the formidable challenges that India has been trying to tackle for years.

  • Even after the transformation from ballot paper system to electronic voting machines, not much headway could be made to rule out manipulation of poll results.
  • As experts and individuals from the political fraternity started raising concerns about the vulnerability of EVMs, the government felt the need to further delve into the issue and introduce a more viable option.

Since the device is compatible only with those EVMS manufactured after 2006, the commission is reportedly trying to achieve “all India VVPAT coverage” by 2019 elections.

4.PM Narendra Modi announces Pravasi Kaushal Vikas Yojana

Source: The Hindu

Prime Minister Narendra Modi launched Pravasi Kaushal Vikas Yojana (PKVY), a skill development program targeted at Indian youth seeking overseas employment to make India the Skill Capital of the World.

It was launched after inauguration of 14th Pravasi Bhartiya Divas convention at India’s IT hub Bengaluru, Karnataka. Portuguese Prime Minister Antonio Costa was the Chief Guest of the event.

Key facts:

  • PKVY will provide training and certify Indians who are seeking overseas employment in selected sectors that have high demand in the global labour market in line with international standards.
  • It will be implemented by the National Skill Development Corporation (NSDC) through its training partners and in consultation with the Union Ministry of External Affairs and the Union Skill Development Ministry.
  • It also aims at boosting the confidence of the Indian youth so that they don’t feel like strangers when they land in a country of their choice for vocation.
  • For this purpose, NSDC will leverage various MoUs it signed between 2011 and 2015 with different agencies of Germany, Canada, Australia, Singapore, UK, US, European Union, France, Iran and China.

5.Government makes Aadhaar mandatory for MGNREGA work

Source: The Hindu

The Union Government has made mandatory for workers in rural areas enrolled under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) to have an Aadhaar card.

Those who have registered under the scheme will be required to give furnish proof of possession of Aadhaar card or undergo the enrolment process till March 31, 2017.

The expenditure for the MGNREGS is met by Government from the Consolidated Fund of India.

Key facts:

  • For this purpose, government has invoked Section 7 of the Aadhaar (Targeted Delivery of Financial and other Subsidies, benefits and services) Act, 2016.
  • This section allows Government to ask an individual to undergo authentication or furnish proof of possession of Aadhaar when the government gives subsidy, benefit or service from Consolidated Fund of India (CFI).
  • The rationale behind making Aadhaar cards mandatory for the MGNREGA is to prevent leakages of subsidies and ensure that the beneficiaries get their due.
  • It will ensure effective implementation of the Aadhaar-linked Direct Benefit Transfer (DBT) scheme aimed at checking leakages of welfare funds.
  • Under DBT scheme, all cash benefits are transferred to beneficiary’s bank account. Union Government has asked its departments and State governments to widen scope of DBT to include all monetary transfers.

6.New Ginger species with medicinal properties discovered in Andamans

Source: The Hindu

  • Scientists from Botanical Survey of India (BSI) have discovered a new species of Zingiber (commonly referred as ginger) from the Andaman and Nicobar Islands.
  • The new species has been named as Zingiber pseudosquarrosum and belongs to genus Zingiber.
  • It is used for its medicinal values by the local Particularly Vulnerable Tribal Groups (PVTGs) of the Andamans.

Zingiber pseudosquarrosum

  • The pseudo stem of Zingiber pseudosquarrosum is red in colour.
  • Its flowers are lotus shaped and have a vermilion tinge and dehisced fruit.
  • This species has tuberous root and its inflorescence buds are urceolate in shape.
  • The morphological features of this species make it distinct from other species belonging to the genus Zingiber. Like other species of Gingers, it is edible and can be propagated vegetatively from the rhizome.
  • The new species possesses ethno-medicinal uses. The fresh extract (juice) of fleshy tuberous roots of this species is used to treat abdominal pain and anti-helminthic troubles by native tribal communities.

7.Haryana launches ‘green Gurugram’ scheme

Source: Indian Express

With a view to increase forest cover in Gurugram, about 20 lakh saplings will be distributed in the city by Haryana Forest Department.

The completion of the Kundli-Manesar-Palwal (KMP) Expressway would help resolve the problem of traffic snarls as heavy vehicles such as trucks would not enter Gurugram.

8.m-Parivahan

Source: PIB

  • It is a citizen centric app that will facilitate access to various transport related services.
  • The app provides for virtual driving license and registration certificate through back end connection to Transport National Register.
  • If a vehicle number is entered into the app, it will give full details of the car and the owner including his DL and RC. This will provide a way to check genuineness of a vehicle and driver, help in passenger safety when hiring a driver or when buying a second hand vehicle.
  • The app will also facilitate good Samaritans through technology. They can report accidents by clicking pictures and reporting to traffic authorities in states and to RTOs, with the option of hiding their identity if they so wish.
  • They can also report traffic violations. States will be asked to provide linkages to the 108 service for better response.

 



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