INDEX Direct Taxation Indirect Taxation Corporate and Other Laws

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2. INDEX • Direct Taxation • Indirect Taxation • Corporate and Other Laws • International Trade and Finance • StatutoryDueDates for May 2014 TM Newsletter –May 2014

3. DIRECT TAXATION Index • IT Department can now raise objections to merger schemes • The Income-Tax Department will now get an opportunity to protect the interests of the Revenue in reconstruction or amalgamation schemes filed for approval before various High Courts. The Central Board of Direct Taxes (CBDT) has directed the Chief Commissioners of Income-Tax (CCITs) to ensure that the comments/objections of the I-T Department on such schemes are sent to the regional director (Ministry of Corporate Affairs) for incorporating them in the response to the Court. Till recently, there was no procedure for the I-T Department to raise objections (for any loss of revenue) to any schemes of amalgamation or reconstruction filed before High Courts. Recently, an amalgamation scheme was sought to be implemented retrospectively and involved setting off of losses of loss-making companies with profits of profit-making companies within the same group, thereby affecting revenues to the exchequer. • India, US to share offshore account details of citizens • India and the US have agreed to share information on financial accounts held in each country by their citizens in a major step towards preventing unaccounted wealth being stashed abroad. India will sign an agreement with the US that would enable New Delhi share information about accounts and investments held by US citizens in various Indian financial institutions. The idea is to help US crack down on its citizens using Indian banks and other entities for parking their funds away from the eyes of the US Internal Revenue Service (IRS).  TM Newsletter – May 2014

4. INDIRECT TAXATION Index • Parliament can impose service tax on restaurants and hotels • Bombay HC dismisses writ filed by Indian Hotels and Restaurant Association and upholds validity of service tax levy on air-conditioned restaurants serving liquor u/s 65(105)(zzzzv) of Finance Act and held the levy as constitutional. The concept of catering admittedly includes a concept of rendering service. The fact that the tax on sale of goods involved in the said service can be levied does not mean that the service tax cannot be levied on the service aspect of catering. • Honorable High Court has Further held that Just because assessee is liable to pay Value Added Tax on sale involved in supply of goods at canteen, it cannot be held that it is not liable to payment of service tax. TM Newsletter – May 2014

5. CORPORATE AND OTHER LAWSIndex • Financial Statements, Audit/Board reports for FY 2013-14 to be governed by Companies Act 1956 • A number of provisions of the Companies Act, 2013 including those relating to maintenance of books of account, preparation, adoption & filing of financial statements(and documents required to be attached thereto), Auditors reports and the Board of Directors report (Board’s report) have been brought into force with effect from 1st April, 2014. Provisions of Schedule II (Useful lives to compute depreciation) and Schedule III (Format of financial statements) have also been brought into force from that date. The relevant Rules pertaining to these provisions have also been notified, placed on the website of the Ministry and have came into force from the same date. • Further ,it is hereby notified by MCA (vide General Circular 08/2014) that the financial statements (and documents required to be attached thereto), auditors report and Board’s report in respect of financial years that commenced earlier than 1st April, 2014 shall be governed by the relevant provisions/Schedules/rules of the Companies Act, 1956. TM Newsletter – May 2014

6. INTERNATIONAL TRDAE AND FINANCE Index • Five advance pricing pacts signed with MNCs • India signed the first batch of five advance pricing agreements (APAs) with multinational companies, in a move that will reduce transfer pricing litigation and provide certainty to companies with a presence here. Such agreements, between a taxpayer and the tax department, define a transfer-pricing procedure for a particular set of transactions. Transfer pricing refers to the practice of arm’s length pricing for transactions between group companies to ensure that a fair price—one that would have been charged to an unrelated party—is levied. • India acts tough on black money, may levy 30% withholding tax on Swiss investments • In a bid to get Switzerland to act on a long-pending demand for information on unaccounted money of Indians in Swiss banks, New Delhi is considering a 30% withholding tax on all kinds of payments made from India to individuals, incorporated entities and permanent establishments located in the European nation. The move comes barely a fortnight after India agreed with the US to share information about American citizens and residents holding financial accounts in India in order to avoid all Indian financial institutions operating in the US being subjected to a similar 30% withholding tax when they bring back funds of their Indian clients. TM Newsletter – May 2014

7. STATUTORY DUE DATES FOR MAY 2014 Index • Statutory Due Dates Calendar for May 2014 TM Newsletter – May 2014

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