News For Aspirants
CBDT signs 7 APAs in January
The CBDT has signed five unilateral advance pricing agreements (APAs) and 2 bilateral APAs with Indian taxpayers in January as it looks to reduce litigation by providing certainty in transfer pricing.
The seven APAs entered into during January pertain to sectors like banking, insurance, investment advisory, information technology, chemicals and engineering. The international transactions covered in these agreements include provision of IT-enabled services, provision of software development services, contract manufacturing, payment of royalty, sale of goods.
What
- With the signing of these agreements, the total number of APAs entered into by the Central Board of Direct Taxes (CBDT) has gone up to 196, which includes 178 unilateral APAs and 18 bilateral APAs.
- In the current financial year, a total of 44 APAs (seven bilateral and 37 unilateral) have been signed till date.
- The two bilateral agreements signed in January, include the first such pact signed with the USA.
- The progress of the APA schemestrengthens the government’s resolve of fostering a non-adversarial tax regime.
News For Aspirants
Minamata Convention approved
India will soon be part of the Minamata Convention on Mercury – a legally binding global treaty to protect human health and environment from ill effects of mercury – as the Cabinet on 7 February 2018 gave its approval for ratification of the deal by the country.
The Convention, however, allows India and other developing countries to continue its use and processes involving mercury compound till 2025. It also excludes use of mercury in Ayurvedic, Siddha and Unani medicines. The Convention was formally adopted by over 100 countries in October, 2013. India had signed it in September, 2014. It had come into force last year.
What
- Since mercury is considered one of the most toxic metalsas it can easily enter food chain and human body and impact nervous system, the Convention aims at minimising its use.
- Besides ban on mercury mining, the treaty also lays down procedures and time-line for phase-down and phase-out of mercury use in a number of products and processes. The Convention also spells out detailed norms for storage of mercury and its disposal.
- It (Convention) seeks to protect human health & environment from ill effects of Mercury. However, the Convention excludes use of Mercury in Ayurvedic, Siddha & Unani medicines.
- Besides outlining dos and don’ts for mercury use, the Convention also urges enterprises to move to mercury-free alternatives in products and non-mercury technologies in manufacturing processes. This will drive research & development, and promote innovation.
- The (Cabinet) approval entails ratification of the Convention on Mercury along with flexibilityfor continued use of mercury-based products and processes involving mercury compound up to 2025.
- The Convention protects the most vulnerable from the harmful effects of mercuryand also protects the developmental space of developing countries. Therefore, the interest of the poor and vulnerable groups will be protected.
News For Aspirants
New criteria for classifying MSMEs
The Cabinet has approved a change in the basis of classifying Micro, Small and Medium enterprises from ‘investment in plant & machinery/equipment’ to ‘annual turnover’. This will encourage ‘ease of doing business’, make the norms of classification growth oriented and align them to the new tax regime revolving around GST (Goods & Services Tax).
What
- The Section 7 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006will be amended to define units producing goods and rendering services in terms of annual turnover.
- After the decision, a micro enterprise will be defined as a unit where the annual turnover does not exceed 5 crore, a small enterprise will be defined as a unit where the annual turnover is more than 5 crore but does not exceed 75 crore.
- A medium enterprise will now be a unit where the annual turnover is more than 75 crore but does not exceed 250 crore.