Lecture meeting on Legal and Tax aspects of Trusts with special reference to REITs, INVSTs and AIFs on 17th June 2015
Mr. Dilip V. Lakhani, Past President of BCAS, addressed the audience in regard to special categories of Trusts. He also explained various structures and implications under Incometax thereon.
He highlighted the controversy around the status of the trust and the consequences of taxability of its income. In his view the status of the trust is dependent upon the status of its Beneficiaries. He drew attention to the fact that if the trust is revocable, then the income is taxable in the hands of the Settlor. He explained how trust can be an important tool for inheritance planning.
He further explained REIT structures and income tax implications on various parties to REIT. He expressed a view that capital gains tax on the sponsor in respect of transfer of the property through SPV to REIT is not exempt, but is deferred, which is one of the reasons for this structure not being popular in India. He mentioned a simple rule of taxation for income of REIT and its unit-holders:
INVSTs are similar to REIT.
Alternate Investment Fund: Finance Act 2015 has provided pass through status to only Category I [usually providing seed capital to start-up ventures] and Category II [usually providing funds to real estate] Funds, whereas Category III [usually have complicated, hybrid structures] Funds have not been granted such pass through status.
Mr. Dilip Lakhani’s presentation and explanation on private trusts with special reference to REITs, INVSTs and AIFs in a lucid manner was of immense benefit and was well appreciated by the audience.
9th Residential Study Course on Service Tax & VAT
Venue: Leonia Resort, Hyderabad
Dates: 19th June, 2015 to 21st June, 2015
Residential Study Course (RSC) is gradually becoming a very sought-after annual event of the BCAS considering the importance and the relevance of the subject in the current economic scenario. This year, the RSC was held at Hyderabad. More than 150 delegates from all over India participated and exchanged their knowledge and experience. In spite of heavy rains, water logging and delayed flights from Mumbai, all the participants made it to the RSC in time thus displaying their commitment to such an event. The Resort located on the outskirts of Hyderabad was a unique destination spread in sprawling greenery and natural rock formations with an ambience of luxury and warm hospitality.
Day 1 – 19th June, 2015
The RSC started in the afternoon with a group discussion on the paper titled “Case Studies on Taxation of Services” written by Advocate S. Thirumalai. The group leaders were CA Abhishek Doshi, CA Mandar Telang, CA Sudhir V. S. and CA Virendra Parwal. Case Studies on Valuation, Exemption, Point of Taxation and Place of Provision of Service were debated with active participation of all the delegates.
This was followed by the Inauguration Session – lighting of the lamp at the hands of Vice President CA Raman Jokhakar and the Chairman of the Indirect Taxes Committee – CA Govind Goyal. The Committee’s latest publication on “Service Tax – Basic Concepts and Procedures”, authored by CA Mandar Telang, was released at the auspicious hands of Advocate S. Thirumalai.
The inaugural session was immediately followed by the first technical session wherein Advocate S. Thirumalai gave his views on the case studies in his paper and also replied to other related issues raised during the group discussion. The session was chaired by CA Sunil Gabhawalla.
Day 2 – 20th June, 2015
The morning started with a group discussion on the paper “Case Studies on Cenvat Credit” written by Advocate L. Badri Narayanan. The group leaders were CA Leena Talathi, CA Nilesh Suchak, CA Sanjay Burad and CA Srikant Shenoy. The groups had a tough time completing all the issues in the paper as the subject was so vast and complex.
The second technical session was a presentation paper by Advocate J. K. Mittal on “Controversies in Service Tax”. In his inimitable style, he explained the controversies surrounding the Service Tax law, the contradictory judgments and challenges faced by the practitioners. The participants were left asking for more. This session was chaired by CA Sanjay Dhariwal.
In the third technical session, Advocate L. Badri Narayanan replied to the queries raised by the participants in the group discussion on his paper. He explained the complexities of the Cenvat Credit Rules and explained in detail so as to clear all the doubts of participants. This session was chaired by CA Uday Sathaye, Past President of BCAS.
In the evening, on the eve of International Yoga Day, a yoga session was organized under the guidance of CA Rajesh Kothari, Past President of BCAS. The response was overwhelming and on request of the participants, one more session was held on Sunday morning at 6 am.
Day 3 – 21st June, 2015
The morning started with a yoga session, it being the International Yoga Day.
The last paper for Group Discussion was of Advocate K. Vaitheeswaran on “Service Tax & VAT on IT, IT Enabled Services and E-Commerce Transactions”. The Group Leaders were CA Jayesh Gogri, CA Pranav Mehta, CA Samir Kapadia and CA Vikram Mehta. The case studies on the subject generated a lot of debate and fruitful participation.
During the fourth technical session, CA Jayraj Sheth presented a paper on “GST – Recent Developments & Expectations”. It was a wonderful presentation with facts and statistics about India’s progress towards GST. This session was chaired by Advocate Shailesh Sheth, who also shared his views on the subject.
CA Samir Kapadia, a member of the Indirect Tax Committee, made a small presentation on the initiative proposed to be undertaken by BCAS to prepare the professionals and the stakeholders to meet the challenges of new law on Goods & Services Tax (GST).
Thereafter, in the fifth and last technical session, Advocate K. Vaitheeswaran replied to all the queries raised by the participants. The paper writer’s exposure and his in-depth analysis made his talk very useful and interesting to the participants. He referred to various court decisions and explained the grey areas to the satisfaction of all. This session was chaired by CA Parind Mehta.
The RSC concluded with the Chairman of Indirect Taxes Committee CA Govind Goyal thanking all the paper writers, delegates for their co-operation and active participation, chairmen of technical sessions, the group leaders, all committee members, the BCAS staff, management of the Resort and all others who made this RSC a very successful event. He specially thanked the President CA Nitin Shingala and the Vice President CA Raman Jokhakar for their wholehearted support. Vice President, CA Raman Jokhakar thanked the Chairman CA Govind Goyal for his untiring efforts to make this RSC a memorable one.
After lunch, the participants departed to their respective destinations, cherishing the memories of the 9th RSC and with a promise to meet again next year at the 10th RSC.
Workshop for Independent Directors (in association with the National Stock Exchange of India) on 3rd July 2015
The Workshop for Independent Directors was inaugurated by CA Nitin Shingala (President), CA Kanu Choksi (Chairman), alongwith Mr. V. S. Sundaresan (CGM, SEBI) and Dr. V. R. Narasimhan (Chief Regulations, NSE)
Dr. Narasimhan gave the keynote address on the topic, citing some of the examples of mishaps in corporate world leading to stringent corporate governance norms being prescribed by the regulators. He mentioned that compliance requirements prescribed by law have arisen out of past experiences. Thereafter, Mr. Sundaresan gave a presentation on the expectations from the regulator’s perspective.
The Chairman mentioned that BCAS can conduct such workshops regularly, which can be recognised as a familiarisation programme for Independent Directors by the regulators.
Mr. Mahesh Athavale, Company Secretary by profession, appraised the participants about the duties, responsibilities and rights of Independent Directors. He shared some interesting practical experiences and case studies.
Mr. Mukund M. Chitale, Past President of BCAS, discussed the role of Independent Directors in an audit committee, board room dynamics and board evaluation. He shared his experiences as an independent director.
Practical issues faced by an Independent Director were discussed by a panel of Dr. V. R. Narasimhan (Chief Regulations, NSE), CA N. Venkatram, Mr. Madhu Bhagwat (Independent Director), led by CA Nawshir Mirza (also an Independent Director)
41 members took the benefit of the workshop. Participants were given ‘Certificate of Participation’ at the hands of the Panelists.
Monsoon Trek to Kothalighad on 11th July 2015
Human Development & Technologies Initiative Committee of the Society had organised a one day trek on Saturday, 11th July 2015 from Ambivali Village near Karjat to Kothaligad Peth.
The Trek was through thick jungle, close to nature surrounding the valley, and hills all around it. It got better as the trek reached greater heights. Considering that climate that day was favourable and cloudy with partial rain, the trek turned out to be enjoyable. Participants were high on energy and fully enjoyed the nature and were disciplined enough to be serious to the extent required for ‘safety’ and were environment friendly too. The 25 participants under the guidance of 3 experienced volunteers from Explorers & Adventurers Club completed the trek successfully. After the exhausting and enjoyable trek, the lunch at a small hotel at the base of Ambivali Village was lot more enjoyable. The return journey brought all back to the concrete jungle.
Lecture Meeting on Current Issues in International Taxation 15th July 2015
Mr. Pinakin Desai, the learned speaker for the lecture meeting held on 15th July 2015 covered various issues in International Taxation explaining various practical issues that one might face. The learned speaker commenced his talk with India-Mauritius DTAA, stating that the existing DTAA is under the process of negotiations and will undergo changes, resulting into a new revised DTAA which could be finalised in a couple of weeks. Then the speaker threw some light on the Black Money Act, 2015 which can have far serious implications on a Non-Resident becoming Resident and Ordinary Resident in India and explained the same with a few practical examples. Thereafter, the speaker drew attention to issues arising on indirect transfer of capital asset read in conjunction with Circular 04/2015 clarifying that the dividends declared and paid by a foreign company outside India in respect of shares which derive their value substantially from assets situated in India would not be deemed to be income accruing or arising in India by virtue of section 9(1)(i) of the Income-tax Act (ITA). Further, the speaker drew attention to the provisions of deemed international transaction by virtue of section 92B(2) of the ITA. Lastly, the speaker threw light on issues arising to foreign companies post amendment of section 6 of the ITA by the Finance Act 2015, which incorporated the test of POEM (Place of Effective Management) for determining the residential status of a Company. The lecture meeting ended after the speaker explained various issues as summarised above and their impact in practical implementation.
