INDEX Direct Taxation Indirect Taxation Corporate and Other Laws International Taxation

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2. INDEX • Direct Taxation • Indirect Taxation • Corporate and Other Laws • International Taxation • Statutory Due Dates for February 2012 TM Newsletter –February 2012

3. DIRECT TAXATION Index • Special Drive by Income Tax Department to verify high value transactions • The CBDT has directed the Income Tax Department to launch a special drive from 20th January to 20th March 2012 for verifying high value transactions (investments/deposits/expenditure) form persons who are not assessed to tax or who have not furnished their PAN while entering into such transaction. • The addressees are required to furnish the PAN if they already have one or need to apply immediately in case they don't have the PAN. They will also be required to explain the source of high value deposit/expenditure/investment and whether these are properly accounted for/ explained in the Income Tax return filed by them. Persons who have not properly accounted for the high value transactions are required to pay due taxes and file the income tax return within this financial year i.e. by 31st March 2012. • In some cases the tax officials may visit the premises of the investors/depositors/spenders. In such cases taxpayers should verify the identity of tax officials before verifying such information. TM Newsletter – February 2012

4. INDIRECT TAXATION Index • Refund of 4% Additional Duty of Customs(4%CVD) Central Board of Excise and Customs has already issued a circular which simplified the procedure for sanction of refund of 4%ACD in case of ACP importers. The amount of 4% CVD refund shall be sanctioned in full on preliminary scrutiny of documents and certificate of Statutory Auditor/Chartered Accountant for correlating the payment of ST/VAT on imported goods with the invoice on sales and also to the effect that burden of 4% CVD has not been passed on by the importer to the buyer. Para 6 of this circular states that only a Chartered Accountant can issue a certificate that incidence of burden of 4% CVD has not been passed on by the importer to the buyer. But on the basis of representations received from Industry and to facilitate trade, Board (vide circular No. 1/2012)has amended the earlier circular to allow Statutory Auditors/Cost Accountants as well to issue the certificate certifying that burden of 4% CVD has not been passed on by the importer to the buyer. Therefore now either of three can issue the certificate. TM Newsletter – February 2012

5. CORPORATE AND OTHER LAWSIndex • Investment by QFI in Indian Equity Share • The Central Government has allowed Qualified Foreign Investors (QFI) to directly invest in Indian Equity Market in order to widen the class of Investors, attract more foreign funds, reduce market volatility and to deepen the Indian Capital Market. • The QFI s who meet the KYC requirement may invest in equity shares listed on the recognized stock exchange and in equity shares offered to public in India. TM Newsletter – February 2012

6. CORPORATE AND OTHER LAWS Index • FDI in Single Brand Retail Trading The much awaited move by the Department of Industrial Policy and Promotion (DIPP), Government of India (GOI) has permitted upto 100% Foreign Direct Investment (FDI) in Single Brand Product Retail Trading under approval route vide Press Note 1 of 2012 dated 10.01.2012. The much hyped decision on allowing upto 51% in Single Brand Retail under automatic route and upto 51% in Multi Brand Retail did not get the nod of Ministry. The above increase in foreign participation is aimed at attracting investments in production and marketing, improving the availability of such goods for the consumer, encouraging increased sourcing of goods from India, and enhancing competitiveness of Indian enterprises through access to global designs, technologies and management practices. This move will allow players like Marks & Spencer to expand and IKEA to enter into Indian Market. TM Newsletter – February 2012

7. INTERNATIONAL TAXATION Index • Vodafone Case The most awaited Cross Border Tax judgment in the matter of Vodafone is out and the Supreme Court of India has set aside the Bombay High Court Judgment asking Vodafone to pay Income tax of USD 2 Bn. This is a landmark cases in the history of International Taxation. The order has come as a big relief for all Cross Border M&A Transactions happening with India focus. This litigation was first of its kind as Indian Tax Authorities attempted to tax capital gains arising on transfer of shares of a foreign holding company of an Indian subsidiary on grounds that such transfer involves an indirect transfer of the Indian subsidiary. Several MNCs would warmly adopt the Supreme Court view in this respect and it should boost Investor Confidence as clarity of Tax Impact has always remained a controversial issue in India. The Supreme Court pronounced that by applying the “look at” test to ascertain the true nature and character of the transaction, we hold that the offshore transaction herein is a bonafide structured FDI investment into India which fell outside India’s territorial tax jurisdiction, hence, not taxable. TM Newsletter – February 2012

8. STATUTORY DUE DATES FOR FEBRUARY 2012 Index • Statutory Due Dates Calendar for February 2012 TM Newsletter – February 2012

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