As per the guidelines, GAAR provisions would be invoked only in cases where foreign institutional investors (choose to take the benefit of double tax avoidance treaties
New Delhi: To address investor concerns over taxation issues, the finance ministry on Thursday proposed a monetary limit for invoking the controversial General Anti-Tax Avoidance Rules (GAAR) in its draft guidelines issued late last night, reports PTI.
Although the draft did not specify the monetary limit, it said that those deals which are over a prescribed limit should be covered by GAAR provisions.
The guidelines further said that GAAR provisions would be invoked only in cases where foreign institutional investors (FIIs) choose to take the benefit of double tax avoidance treaties.
"Where an FII chooses to take a treaty benefit, GAAR provisions may be invoked in the case of the FII, but would not in any case be invoked in the case of the non-resident investors of the FII," the draft guideline said.
The provisions, it said, will apply only to the income arising to taxpayers on or after 1 April 2013.
The draft guidelines also proposed setting up a three-member Approving Panel to decide whether a particular case would attract the provisions of the GAAR.
The guidelines have proposed time limits for completion of various actions under the GAAR.
The GAAR provisions were proposed by former finance minister Pranab Mukherjee in his budget to prevent tax evasion. The provisions, however, invoked sharp criticism from foreign and domestic investors, following which the government constituted a high-level committee to look into their concerns.
The committee, headed by the Director General of Income Tax (international taxation), looked into the concerns of the investors and came out with draft guidelines to seek comments of the stakeholders.
"We have finalised the GAAR draft rules after three meetings with the stakeholders. The draft will have examples for what would be deemed as permissible and impermissible arrangement," finance secretary RS Gujral had said earlier in the day.
Even after the fresh reduction, there exists a scope for cutting rates by a further Re1 per litre as current revision was done at average international oil rate in the first fortnight of June
New Delhi: In a relief to inflation-battered common man, petrol price was cut by Rs2.46 per litre on Thursday, the second reduction this month, reports PTI.
Petrol price in Delhi will cost Rs67.78 per litre with effect from midnight Thursday as compared to Rs70.24 a litre rate now, state-owned oil companies announced.
The reduction in rates follows a Rs2.02 a litre cut in prices from 3rd June. The two price cuts have wiped out more than half of the massive Rs7.54 per litre increase in rates, the biggest in the history which was effected last month.
Even after the fresh reduction, there exists a scope for cutting rates by a further Re1 per litre as current revision was done at average international oil rate in the first fortnight of June. Global oil prices have fallen by 8% since then.
In Mumbai, petrol price has been cut by Rs3.10 to Rs73.35 per litre, while it will cost Rs72.74 a litre in Kolkata from Friday compared to Rs75.81 per litre currently. Chennai saw a Rs3.07 per litre cut in price to Rs72.74 a litre.
State-owned oil firms abandoned the practice of revising rates of petrol on 1st and 16th of every month and from now on will now do so on a random date so as to deter petrol pump dealers building positions.
Petrol pumps at some places run dry as owners stop taking supplies from companies if a reduction in price is anticipated. Similarly, if an increase in rate is expected, pump dealers start hoarding supplies.
Indian Oil Corporation (IOC), the nation's largest fuel retailer, said the three oil firms are projected to lose a record Rs1,51,000 crore in revenue on sale of diesel, domestic LPG and kerosene, whose rates have not been revised in past one year.
Oil firms, IOC said, continue to closely monitor the international oil prices and the evolving scenario in rupee-dollar exchange rates to assess their potential impact on selling prices in future.
"It may be noted that prevailing global economic conditions have had an adverse impact on world petrol demand resulting in petrol margins over crude oil prices dipping to unsustainable lows. Therefore, price differential of crude and petrol shall also be under a close watch in the coming days," it said.
Sources said the gasoline cracks or the difference between cost of raw material (crude oil) and the price of product (petrol) had narrowed to just $3 per barrel. In comparison, cracks for diesel were as high as $12-$13 a barrel.
With such narrow spread, any upward movement in crude oil price or devaluation of rupee would force an increase in price in near future, if the rates were to be cut now.
The action by the apex bank should serve as a pointer to other banks—big and small—that charge excessive service charges
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs2 lakh on the Bundi Urban Co-operative Bank located at Bundi in Rajasthan. According to a press release, the bank has been penalised for "repeated violations of Reserve Bank of India (RBI) directives relating to donation and levy of service charges on customers". A show-cause notice was sent to the bank, but the central bank found the response unsatisfactory.
Levying monetary penalty for violation of RBI guidelines on services charges to customers is the first of its kind by the RBI. The action by the apex bank should serve as a pointer to other banks-big and small-that charge excessive service charges.