Media Release
Bangalore, Jul 31: Kanara Entrepreneurs (KE), Bangalore had organized a presentation on "Rebooting Growth – The Budget Analysis" for its members and their spouses during their Members Meeting held at the Grand Magrath Hotel. Vishal Agarwal and Jayashree Parthasarathy from BMR & Associates LLP, a professional services organisation specialised in Tax, Risk and M&A advisory for businesses at national and international levels, were the resource persons.
Vishal, Partner of BMR specialized in direct tax practice of the firm in Bangalore, has over 13 years’ experience in international tax matters., discussed on the areas of Direct Taxation and its impact on the proposed changes in the recent budget. He highlighted the current economic scenario of India and challenges faced by the trade and industry. He analyzed the direct tax proposals and the summary of key direct tax proposals are as follows:
· Slabs for personal tax raised by Rs 50,000. Basic exemption limit stands at Rs 250,000. Threshold for resident senior citizens above 60 years and 80 years stand at Rs 300,000 and Rs 500,000 respectively;
· Deduction limit under section 80C/ 80CCD increased to Rs 150,000 and deduction for interest on self-occupied property increased to Rs 200,000.
· Unlisted shares and units of mutual funds other than equity oriented mutual funds to be treated as long-term only after 36 months and not 12 months. Benefits of lower tax and indexation now delayed.
· Calculation of dividend distribution tax has been tweaked and now requires a grossing up of dividend proposed to be paid to determine the tax; effectively pushes up the rate by about 2.5 percent.
· Domestic transactions can now be taken to the Authority for Advance Rulings which was previously only available for cross border transactions; could potentially reduce litigation substantially.
· No deduction provided for CSR spend under section 37, although room left for claim under sections 30 to 36
· Denial of tax deduction on failure to withhold taxes relaxed. For payments to non-residents TDS to be done before filing tax return in line with the provisions for domestic TDS. All domestic payments now brought within the ambit of this provision though quantum of denial of deduction reduced to 30 percent.
Later Jayashree, Director of BMR, an expert in indirect taxation has over 10 years’ experience in advising clients across diverse sectors, delved in depth about indirect taxation and its implications in the recent budget, Jayashree’s lucid presentation with case laws and examples covering Excise, Customs, service tax and the proposed Goods and Services Tax (GST) brought out clarity on various budget proposals and how it would affect the business. The Summary of key indirect tax proposals are given below:
· No change in the median rate of service tax, excise duty, customs duty as well as CST; however, rationalization of effective rates of import duty for specified products to bring them at par with effective duty rate applicable on domestic manufacture of such goods. Additionally, focus on environment sustainability and well-being of individual
· Overall commitment to introduce GST; however, no steps or timeframe outlined for GST implementation.
· Setting up of a High Level Committee for regular trade interaction as well as implementation of a slew of measures around streamlining of litigation
· Time-frame introduced for availment of CENVAT credit on inputs and input services; this would require implementation of specified procedures to map past period (unavailed credits) as well as future credits by businesses
· Interest rates for delayed payment of service tax enhanced (staggered rates between 18 – 30 percent to apply) along with mandatory pre-deposit of tax and penalty disputed in customs, excise and service tax appeals – consequent need for businesses to evaluate merits of case as well as potential impact where the enhanced interest rate is applied on a retroactive basis
· Host of imminent amendments on the anvil with a view to increase rule making powers of the Central Government as well as enhance power of the tax authority for gathering information (from other tax and statutory authorities) as well as recovering arrears of taxes (such as service tax arrears in cases of business transfers)
· However, a key expectation of implementation of a new scheme/ mechanism for fast-tracking service tax/ CENVAT refund processing for service exporters not addressed
The Meeting started with the welcome address by President Mark D’Souza. D’Souza gave update on the activities of KE and informed that, KE has lined up various events, in tune with the current year’s theme “Engage.Enhance.Excel”, which would sharpen the entrepreneurial skills, enhance the knowledge and equip Entrepreneurs & Professionals to face the challenges.
Anil Francis Rego, Director Mentoring moderated the introduction session of all participants and guests, which facilitated, not only to know about each member’s area of business but also generate referrals. Mr Peter Anil Rego- President Elect, introduced the resource persons and welcomed them.
Participates clarified various queries on the Union budget 2014 and the meeting concluded with fellowship dinner.
Event was compered by Vivon Pinto and Laveena D’Souza proposed the vote of thanks.