Ministry of Finance
Central Government relaxes provisions of TCS under section 206C(1G) of the Income-tax Act, 1961 in respect of non-resident individuals visiting India ( 31 MAR 2022 )
Section 206C (1G) of the Income-tax Act, 1961 (“the Act”) provides for collection of tax by a seller of an overseas tour programme package from a buyer, being a person purchasing such package, at the rate of 5% of the amount of the package.
Representations were received from domestic tour operators who were facing difficulties in collection of tax from non-resident individuals visiting India who were booking overseas tour package from such domestic tour operators. Since such persons may not have a PAN, tax is required to be collected at higher rates. Further, such non-residents may find it difficult to furnish their ITR and claim refunds.
In order to remove such difficulties, the Central Government, in exercise of powers conferred under section 206C(1G) of the Act, has specified that the provisions of the said section shall not apply to a buyer being an individual who is not a resident in India in terms of clause (1) and clause (1A) of section 6 of the Act and who is visiting India. Hence, a domestic tour operator is not required to collect tax on sale of overseas tour package to non-resident individuals visiting India.
RBI
India’s International Investment Position (IIP), December 2021 ( MAR 31, 2022 )
Today, the Reserve Bank released data relating to India’s International Investment Position at end-December 2021.
Key Features of India’s IIP in December 2021 :-
Net claims of non-residents on India increased by US$ 21.1 billion during October-December 2021 due to an increase of US$ 16.2 billion in foreign-owned assets in India combined with a decline of US$ 4.9 billion in Indian residents’ overseas financial assets (Table 1).
Higher inward direct investment, trade credit and loans contributed to the increase in non-residents’ claims on India even as foreign portfolio investment in India reduced during the quarter.
Indian residents’ overseas financial assets declined during the quarter, mainly due to reduction in currency and deposits.
Reserve assets accounted for 68.4 per cent of Indian residents’ foreign assets (Table 2).
The share of debt liabilities in total liabilities increased marginally during the quarter and stood at 48.5 per cent in December 2021 (Table 3).
- The ratio of India’s international financial assets to international financial liabilities stood lower at 72.1 per cent in December 2021 (73.4 per cent in September 2021).
Central Board of Direct Taxes
Clarification with respect to relaxation of provisions of rule 114AAA of Income-tax Rules, 1962 prescribing the manner of making Permanent Account Number (PAN) inoperative - reg. ( MAR 31, 2022 )
In order to have smooth application of section 234H and existing rule 114AAA, it is clarified that the impact of sub-rule (2) of rule 114AAA i.e. where a person. whose permanent account number has become inoperative under sub-rule (1). is required to furnish. intimate or quote his permanent account number under the Act. it shall be deemed that he has not furnished. intimated or quoted the permanent account number. as the case may be. in accordance with the provisions ofthe Act. and he shall be liable for all the consequences under the Act tor not turnishing. intimating or quoting the permanent account number. shall come into effect from 1 st April, 2023 and the period beginning from 1st April, 2022 and ending with 31st March, 2023, shall be the period during which the said sub-rule shall not have its negative consequences of the nature referred to in the said sub-rule or specified in paras 4 and 4.1 above. However, the tax payer shall be liable to pay a fee in accordance with sub-rule (5A) of rule 114.
Supreme Court
Chief Justice of India Ramana launches FASTER software for rapid transfer of court orders ( MAR 31, 2022 )
Chief Justice NV Ramana launched a software that will transmit court orders swiftly and securely through electronic mode on Thursday, a step which will help in quick communication of judicial orders. CJI Ramana, along with Justices AM Khanwilkar, DY Chandrachud and Hemant Gupta and Chief Justices and judges of high courts, was present at the online launch of the Fast and Secured Transmission of Electronic Records (FASTER) software.
FASTER comes into being after the Bench headed by CJI Ramana took suo motu cognisance of delay in the release of convicts even after granting of bail on grounds such as non-receipt or non-verification of judicial orders. The court ordered duty officers at prisons to amend rules, procedures and practices immediately to facilitate the acceptance of e-authenticated order copies. The court also instructed chief secretaries of the states and UTs to make arrangements for internet with adequate speed at all prisons across the country. It asked that the nodal officers should be appointed under the FASTER system to accept e-authenticated copies of orders.
Business News
Make in India: How govt is turning to MSMEs to make India self-reliant in defence manufacturing ( MAR 31 , 2022 )
The government’s focus on making India, which is one of the biggest importers of arms, 70 per cent self-reliant in weaponry by 2027 and promoting defence indigenisation has much to do with its MSMEs. Not just the government and large players, but MSMEs themselves have realised their role as an untapped force multiplier for the defence sector. That’s not only because MSMEs have been a cog in the defence supply-chain wheel so far but also due to the manufacturing depth they now offer by the virtue of their growing presence across India and technological prowess.
To put that in perspective, the total MSME vendors scattered across the country supplying to the Defence Public Sector Units (DPSUs) were 7,591 in FY18, 8,643 in FY19 and 10,506 till Q2 FY20, according to the data shared by the former MSME Minister Nitin Gadkari in Rajya Sabha in March 2020. By December 2021, the total MSME count had increased to 12,000. As a result, the procurement value by DPSUs from MSMEs had increased from Rs 4842.92 crore in FY19 to Rs 5463.82 crore in FY21.
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Banking and Finance
Axis Bank to buy out Citi India's consumer banking business for $1.6 bln ( MAR 31, 2022 )
Private sector lender Axis Bank on Wednesday announced a deal to acquire Citibank India’s consumer banking business for Rs 12,325 crore (approx. $1.6 billion), in a move to try and narrow the retail banking gap between themselves and leaders such as HDFC Bank and ICICI Bank. The transaction comprises the sale of the credit cards, retail banking, wealth management and consumer loans. The procedure—which is likely to be completed over the next 9 to 12 months—also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business that consists of commercial vehicle and construction equipment loans as well as the personal loans portfolio. Citi will retain its institutional client business.
World Affairs
U.S. lawyers swapped firms at record pace in 2021, report finds ( mar 31, 2022 )
Providing further evidence that the U.S. legal hiring market was on fire in 2021, a new report has found that lawyer moves between law firms were up 111% nationally last year. Lateral moves among law firm partners increased nearly 43% over 2020, while the number of associates switching firms was up 149% year-over-year, the National Association for Law Placement (NALP) said Wednesday. The combined 111% annual increase in lateral moves is higher than any time in the two decades NALP has been gathering that data, it said.
According to NALP, nearly 7,700 attorneys switched law firms in 2021 compared to 4,500 in 2020 — a year in which lateral hiring declined 30%, largely due to the pandemic. For the first time, NALP asked law firms about hiring lawyers to work remotely, without relocating to an office. Among all law firm offices, 15% reported hiring a remote lateral partner, while nearly 23% hired remote associates.
Lateral hiring was up across all U.S. markets and regions, NALP found, but it was especially robust in Houston, New York and Boston, which saw total lateral moves increase 191%, 178%, and 171% respectively over 2020.
Word of the Day
The Rule of Three is the economic theory that large mature markets are typically dominated by three competitors. The theory suggests that a new industry with hundreds of competitors will experience mergers, acquisitions and shakeouts that see three large firms emerge. The rule of three also suggests that a firm that dominates an industry with few competitors is vulnerable to competition. Large dominant firms tend to become less responsive to customers and innovation, opening up space for a competitor or two.
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