BEPS Study Group
Meeting on “Exchange of Information and Tax
Transparency” held on 16th September 2017 at BCAS Conference Hall
The meeting was held to discuss the steps
taken by the Government on Exchange of Information to curb tax avoidance and
tax evasion. Mr. Rahul Navin, CIT (TPI) explained the trigger for the steps
i.e. how the global consensus has been achieved, various kinds of information
exchange agreements and how they will be implemented.
The economic crisis of 2009 brought the tax
avoidance by global firms into focus. US Government issued FATCA rules. These
rules require foreign banks doing business in the US and foreign Governments to
provide details of the bank accounts and financial assets of US persons, to the
US Government. This became the standard followed by the G20 / OECD. Now the
Governments have entered into agreements to exchange information on automatic
and simultaneous basis about each other’s residents.
The underlying instrument for Exchange of
Information (EOI) is the article in the DTA (Article 26 of the OECD Model DTA).
Wherever there is no DTA, countries have entered into Tax Information and
Exchange Agreements. There is a further Multilateral Convention on EOI. SAARC
countries also have entered into agreement for EOI. The agreements are on
reciprocal basis – i.e. two countries will share information with each other of
each other’s residents. However, FATCA agreements of US are not on reciprocal
basis. The agreement with India is not on reciprocal basis. The information to
be exchanged will be the beneficial ownership and identity information of
entities, bank accounts, beneficiaries, persons having control over bank
accounts, power of attorney holders, etc. The information should be shared
within 90 days, or updates should be provided to the other Government. The
agreements provide for information being held confidentially. However if
prosecution is launched, or if the Court requires the same, then information
can be made public. Indian tax return requires information to be disclosed of
foreign assets. Every foreign entity in which an Indian resident has an
interest has to be disclosed. In summary, banking and asset holding secrecy has
been abolished.
All the members were very appreciative of
the presentation and benefitted a lot from the session.
BEPS Study Group
Meeting on “BEPS Action plan –
implementation and issues; and Developments in APA and Transfer Pricing” held
on 23rd September 2017 at IMC, Churchgate
The meeting was held to discuss Multilateral
Instrument under BEPS Action Plan – Implementation and Issues; and Developments
in APA and Transfer Pricing. The Speaker, Mr. Sanjeev Sharma CIT (APA-2) gave
the background about the BEPS measures and the ways Governments are tackling
Black Money. He also discussed about the disclosures required for the Advance
Pricing Agreements (APAs) and how countries negotiate the agreements.
He further explained how the countries have
agreed on BEPS Action reports on tax avoidance, information exchange and
co-operation and also to take action on preferential regimes by tax havens. All
this has resulted in a Multilateral Instrument being signed by various countries.
The MLI contains several provisions to amend the DTA. There are alternatives in
various clauses for the countries to choose from. Some minimum standards on Tax
avoidance are however non-negotiable and all countries have agreed to implement
the same. At the G20 / OECD forum, all countries have an equal say. The large
developing countries actively participated like India, China, and Brazil. India
has signed several Advance Pricing Agreements. Almost all big MNCs in India
have an APA with India. For a successful APA, it is essential that all
information be disclosed to the authority. The Speaker also highlighted how
India is helping other countries to develop its capabilities for tax laws and
its implementation. He then deliberated on several practical issues on the
negotiation of MLIs – judicial systems in different countries, administrative
systems, etc. In a nutshell, the coming years will witness a sea change in the
manner of tax structures and advice. One will have to pay taxes in some country
or the other.
The meeting was quite interactive and
participants benefitted a lot.
Direct Tax Study Circle
Meeting on “Deemed Income u/s. 68, 69, 69A,
69B and 69C” held on 2nd November 2017 at BCAS Conference Hall
Taxation Committee of BCAS organised the
meeting where Chairman of the session CA. Bhadresh Doshi gave his opening
remarks and explained the theory of peak credit which is crucial when additions
are made u/s. 68 or 69.
The Group leader CA. Prerna Peshori briefly
explained the ingredients of section 68 (cash credit) and the conditions
attached to it. She also discussed over the issue as to whether section 68 is
applicable to an assessee not maintaining books of accounts. In this regard,
Chairman referred to the decisions of the Bombay High Court in the case of
Bhaichand H. Gandhi and Arunkumar Muchhala.
Thereafter, CA. Prerna described the issue
relating to share application money and share premium wherein the Assessing
Officers have made additions u/s. 68. In this context, decision of the Supreme
Court in Lovely Exports was discussed followed by the decision of Royal Rich
Developers Pvt. Ltd vs. DCIT (ITAT Mumbai) wherein it was observed that
sections 68 and 56(2)(viib) can never simultaneously operate.
The group leader then briefly explained the
provisions of sections 69, 69A, 69B, 69C and 69D. The Chairman, CA. Bhadresh
Doshi explained the minor differences amongst sections 69, 69A and 69B. Few
judicial decisions pertaining to bogus purchase were also taken up.
Lastly, the group leader deliberated upon
the amendment made in section 115BBE by Finance Act, 2016. As per section
115BBE, income tax shall be calculated at 60% where the total income of
assessee includes Income under sections 68, 69, 69A, 69B, 69C, 69D and
reflected in the return of income furnished u/s. 139; or if any additions are
made under these sections by the Assessing Officer. The tax rate of 60% will be
further increased by 25% surcharge, 3% education cess, 6% penalty, i.e.,
effective tax rate comes out to be 83.25% (including cess).
The meeting was very enlightening and the
participants benefitted a lot from the session.
Indirect Tax Study
Circle
Meeting on
“Significant Issues in GST” held on 6th November 2017 at BCAS
Conference Hall.
The Indirect Taxation Committee of BCAS
organised a meeting on “Significant Issues in GST” at BCAS Conference Hall
which was addressed by CA. Aumkar Gadgil. The related issues discussed and
debated upon by/with the participants included matters relating to Reverse
Charge Mechanism, Input Tax Credit and Place of Supply Provisions amongst
others.
The meeting was quite interactive and the
participants benefitted a lot from the session.
ITF Study Circle
Meeting on “Indirect Transfer Provisions
under Income tax Act, 1961” held on 7th November 2017 at BCAS
Conference Hall
ITF Study Circle Meeting on Indirect
Transfer Provisions under Income tax Act, 1961 was held at BCAS Conference Hall
where CA. Kartik Badiani led the discussion. The session was chaired by CA.
Siddharth Banwat.
The Group leader briefly discussed the
history behind introduction of the provisions of indirect transfer by Finance
Act, 2012 and explained the provisions of indirect transfer through various
examples. The thorough analysis of each part of the provision through structure
and examples helped the participants to understand the nuances of the indirect
transfer provisions and its applicability in certain scenarios.
The discussion also included brief analysis
of OECD’s models on ‘Tax Treatment of offshore indirect transfers’ and its
correlation with the Indian approach and analysis on the decision in case of
Sanofi Pasteur Holdings SA and Cairn UK Holdings Ltd.
The participants benefitted a lot and
appreciated the efforts put in by the group leader.
FEMA Study Circle
Meeting on “Key changes in FDI Policy” held
on 9th November, 2017 at BCAS Conference Hall
International Taxation Committee of BCAS
organised FEMA Study Circle Meeting on “Key changes in FDI Policy” where CA.
Rajesh L. Shah led the discussion.
The Group leader discussed various changes
brought out by FDI Policy on topics such as Cash and Carry Wholesale Trading,
Downstream investment, FDI in LLP and FDI in Single Brand retailing etc.
The participants appreciated the hard work
put in by the group leader and benefitted a lot from the discussion.
“Finserv Conclave” held on 10th November 2017
Finserv Conclave covering tax, regulatory
and accounting aspects of financial service sector was held by the Taxation
Committee on 10th November 2017 at the St. Regis, Lower Parel,
Mumbai. The event was attended by 70 participants many of whom were from the
banking / custodian / private wealth management sector. President Narayan
Pasari gave the opening remarks followed by introduction from the Chairman of the
Taxation Committee, CA. Ameet Patel.
The topics and speakers were as under:
Advocate Ashwath Rau
Overview of Financial Services Sector: The Speaker, Advocate Ashwath Rau took the participants through the
financial services landscape for pooling vehicles. He also touched upon various
sources that are used for raising of funds.
Advocate Sandeep
Parekh
SEBI Regulations concerning AIF,
Securitisation Trusts, REITS, InvITs: Advocate
Sandeep Parekh discussed SEBI regulations for REIT, InvIT. with practical
insights about the REIT and InvITs.
CA. Subramaniam
Krishnan
Direct Tax Regulations concerning AIFs: CA. Subramanian Krishnan explained the direct tax provisions
applicable to trusts. He discussed how trust taxation has evolved over the
years and the impact of the same on AIFs. He also mentioned the disclosure
requirements in the return of income and the applicable forms.
CA. Bhavin Shah
Direct Tax Regulations applicable to
Securitisation Trusts, REITS and InvITs: CA. Bhavin
Shah discussed the evolution of REITs / InvITs and the typical structure of
REIT/InvIT. He briefly explained pros and cons of setting up of REIT / InvIT,
overview of REIT / InvIT regime and also various tax implications relating to
REITs and InvITs. He also touched upon the tax implications applicable to
Securitisation Trust.
CA. Venkatramanan
Vishwanath
Accounting issues under Indian GAAP and
Ind AS: CA. Venkatramanan Vishwanath initiated his
presentation with various issues faced by AIFs and other entities engaged in
the financial service sector. He also discussed audit consideration and
challenges under Ind AS (including the challenges faced by the entities
operating in financial service sector) and answered various queries from the
participants.
CA. Parind Mehta
Indirect tax issues under GST: CA. Parind Mehta gave a brief overview of key provisions of GST.
Post that, he discussed in detail the GST impact on every leg of a typical REIT
/ InvIT transaction. He also talked about the GST implication in case of AIFs
and Securitisation Trusts and compliances that should be adhered to.
Fireside chat between CA. Gautam Doshi,
CA. Anish Thacker and CA. Ameet Patel: The final
session of Finserv Conclave was a fireside chat amongst CA. Gautam Doshi, CA.
Ameet Patel and CA. Anish Thacker. In this chat, CA. Gautam Doshi gave his
views and insights on various issues faced by financial services sector at
present and the challenges ahead in future. He also explained how technology is
going to impact the industry going forward and also expressed views on how the
various issues emerging from legal and tax regulations can be eased or
clarified by the government and the institutions governing them. CA. Anish
Thacker also chipped in with his valuable views on the topics discussed. The
chat was excellently moderated by CA. Ameet Patel. Thereafter he responded to
questions raised by various participants.
The sessions were highly interactive and the
speakers shared their insights on the subject. The participants benefited
immensely with the interactive sessions.
HRD Study Circle
Meeting on “Challenges, A Learning Curve to
Emerge Stronger” held on 14th November, 2017 at BCAS Conference Hall
HDTI Committee of BCAS organised the meeting
addressed by Mr. Shyam Lata who gave the presentation and explained why we fear
challenges and how Challenges can turn out to be the opportunities to scale up
in life. He also enlightened as to what one should do to learn from a
challenge, by accepting the challenge and turning it into a boon for one’s
life. Mr. Shyam highlighted the main factors that need to be kept in mind to
discipline, monitor and improve by facing day to day challenges and succeeding
to achieve in life by setting SMART goals.
The session was very interactive and
participants were trained in problem solving techniques in an efficient and
time bound manner and thus benefitted a lot from the meeting.
Lecture Meeting on “Developments in
Insolvency & Bankruptcy
Code” held on 15th November, 2017 at BCAS
Conference Hall
Advocate Kumar
Saurabh Singh
A Lecture meeting on “Developments in
Insolvency & Bankruptcy Code” addressed by Advocate Kumar Saurabh
Singh was held on 15th November, 2017 to discuss the learnings from
the implementation of Insolvency & Bankruptcy Code (IBC) and some of the
recent changes. President CA. Narayan Pasari in his opening remarks briefed the
participants about the legislative history of the IBC and the challenges faced
by the entrepreneurs and financial institutions at the time of recovery in pre
IBC era due to multiple laws and regulations. The President also stated that
along with the GST, the IBC is also one of the emerging areas of practice for
the Chartered Accountant Community.
The Speaker started the meeting by stating
the objective of the IBC and mentioned that the new law brings the balanced
rights between the secured creditor and corporate debtor earlier not present in
the pre IBC era. “Shape up or Ship Out” was the theme emphasised by both
the President as well as the Speaker in their address to the participants.
Advocate Saurabh explained the IBC Trigger
point and also the entire IBC process i.e. 180-270 days Framework in which the
Insolvency Professional (IP) takes the control of the entire business
operation. This model is referred as “Creditor in Control” or “Committee of
Creditors”.
The Speaker also opined and debated on
various imperative issues such as allowing the existing promoter to participate
in bidding process. He also emphasised that under IBC the intent is to continue
the business as a going concern and not the liquidation.
He also talked about some of the critical
and important cases which are under IBC, such as ICICI vs. Innovative
Industries, Essar Steel India Limited vs. Reserve Bank of India etc. He
further deliberated on the IBC case which involved the common man i.e. Home
Buyer which is IDBI Bank Limited vs. Jaypee Infratech Limited. He also
mentioned the key take away from each one of these cases and few issues which
still need to be addressed by the Insolvency Board. Thereafter, the Speaker
briefly explained various issues and concerns of the Shareholders of the
company during the entire IBC process. He also touched upon the various issues
relating to the listed companies once covered under IBC.
This being a very interactive meeting, the
participants were truly enriched with the presentation and the in-depth
insights given by the Speaker. The meeting concluded with Q & A session on
various issues relating to implementation of IBC.
Workshop on Foreign Tax Credit held on 16th
November 2017 at BCAS Conference Hall
CA. Himanshu Parekh
International Taxation Committee conducted a
workshop on Foreign Tax Credit at BCAS Conference Hall which was addressed by
CA. Himanshu Parekh by explaining the concept in a very lucid manner. He took
the participants through the framework under the treaties and the Income-tax
Rule 128 which has become effective recently. He dealt with the various types
of foreign tax credit mechanisms and highlighted the unique positions under
different treaties that India has entered into. The presentation was well
supported by a number of examples. He also listed down the issues which are
unresolved by the introduction of the new rules.
CA. P. V. Srinivasan
Thereafter, it was followed by CA. P. V.
Srinivasan’s incisive exposition on controversies surrounding Foreign Tax
Credit. His personal experience in dealing with the subject helped the
participants in understanding the nuances of the subject and his analysis of
judicial precedents on this subject also enlightened the participants. The
workshop ended with a panel discussion wherein both the learned speakers
answered all the questions provided to them before-hand and also those from the
floor.
Overall, the workshop matched the
participants’ expectations and was very well received. This is the first BCAS
workshop on Courseplay. Participants not attending the workshop could view the
course in real time.
