FM announces excise duty hike, petrol, diesel to go up
Petrol and diesel prices are set to increase from Friday midnight as Finance Minister Nirmala Sitharaman announced an additional special excise duty (SAED) of Re 1 and a road and infrastructure cess of Re 1 per litre on both the transport fuel while presenting the Union Budget 2019-20.
 
Currently, an SAED of Rs 7 per litre is charged on both branded and un-branded petrol and Re 1 per litre on diesel. Also, road and infrastructure cess of Rs 8 per litre is being charged on both the fuel. 
 
The previous Budget of 2018-19 had cut basic excise duty on petrol and diesel by Rs 2 per litre. However, the move was offset by an additional levy of Rs 8 per litre under the levy of road and infrastructure cess on both petrol and diesel. 
 
Domestic fuel prices vary in tandem with global crude and product prices on a daily basis. Last year, fuel prices surged to record levels and the Centre and states faced severe criticism over high excise duty and state levies.
 
In October, the government had cut excise duty to moderate the effect of rising oil prices. But this cut came after the government had raised excise duty on petrol and diesel on nine occasions, almost doubling its revenue from the oil sector.
 
On Friday, petrol and diesel prices in the national capital are currently Rs 70.51 and Rs 64.33 per litre, respectively.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • Like this story? Get our top stories by email.

    User

    GST Council extends return filing dates, refers rate cut for EVs to a panel
    In a major relief to trade and businesses, the all-powerful GST Council in its first meeting after the Modi government came back to power extended the cut-off date for filing annual returns for FY18 by two months to August, 2019.
     
    Easing the enrollment process for new firms, the Council decided to allow the use of 12-digit Aadhaar number for getting GST registration.A In order to check tax evasion, the Council made it now mandatory for registered multiplexes to issue e-tickets. The electronic invoicing system would be rolled out in a phase-wise manner for B2B transactions.
     
    The proposal to slash GST on electric vehicles (EVs) from 12% to 5% has been sent to a rate fitment committee and the issue would be taken up in the next GST Council meeting. The issue related to valuation of goods and services in a solar power generating system and wind turbine would also be taken up first by the panel of officers.
     
    The Council chaired by Union Finance Minister Nirmala Sitharaman extended the tenure of National Anti-Profiteering Authority (NAA) by two more years to ensure companies pass on the benefits of lower GST rates to consumers.
     
    Addressing press conference after the meeting, Revenue secretary Ajay Bhushan Pandey termed the decision as consumer-friendly.
     
    "In order to ensure GST rates cuts are actually passed on to customers and no anti-profiteering takes place the current provision is that only the penalty of Rs 25,000 will be imposed in addition to the profiteered amount. So, the change approved by the Council is that now if profiteered amount is not deposited within 30 days, then the penalty to the extent of 10 per cent of the profiteered amount will be imposed on the company," Pandey said.
     
    The Council also took a decision regarding location of the State and the Area Benches for the Goods and Services Tax Appellate Tribunal (GSTAT) for various states and Union Territories with legislature.
     
    "It has been decided to have a common State Bench for the States of Sikkim, Nagaland, Manipur and Arunachal Pradesh," a finance ministry statement said.
     
    Hectic lobbying by cement companies and builders, however, failed to convince the apex indirect tax body to cut GST on cement from 28 per cent to 18 per cent. The automobile sector also did not get any relief from the GST Council.
     
    Industry body Ficci welcomed various GST Council decisions saying it will ease compliance burden.
     
    "The thought process laid by the Government regarding its endeavor to bring more items in the ambit of GST regime including simplification of GST Rules and rationalization of rates is indeed a step in the right direction and would pave the way for simplification and stability under the GST regime," it noted.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • User

    ITAT Upholds Addition of LTCG on NDTV's Prannoy Roy & Radhika Roy
    The Delhi bench of Income Tax Appellate Tribunal (ITAT) has upheld addition of long term capital gains (LTCG) tax against Dr Prannoy Roy and his wife Radhika, both promoters of New Delhi Television Ltd (NDTV) for realising share sale consideration in the guise of loan. The case was related with purchase and sale of shares of NDTV in August 2009 by RRPR Holding Pvt Ltd and the Roys and concealment of income of over Rs117 crore each during two assessment years. 
     
    In an order passed on 14 June 2019, the ITAT bench of Beena Pillai and Prashant Maharishi says, "The authorised representative (of the Roys) has stated that as it is a transaction between the closely related parties and there is no motive of the tax evasion is the provisions of section 56 (2) does not apply. Here the argument deserves to be rejected at the threshold itself as the assessee has failed to explain by credible evidence any reason of buying the shares of the above company (NDTV) at Rs4 per share when the quoted price of the share on the recognised stock exchange is Rs140 per share. As the motive itself of the assessee was not demonstrated at all with credible evidences the assessee now cannot say that there was no motive of tax evasion."
     
    During August 2009, the Roys sold their shares in NDTV to RRPR Holding at Rs4 per share against its market price of Rs140 at that time. Then on 9 March 2010, the Roys bought 34.79 lakh shares of NDTC from RRPR Holding at Rs4 per share against the market price of Rs140 per share. The AO O noted that these transactions have been carried out to manipulate the gain or loss of long-term capital gain by the assessee. 
     
    "Accordingly he (the AO) noted that the transaction shown by the assessee has long-term capital gain are nothing but sham transactions which have been manipulated to evade tax arising on the transfer of shares of NDTV. He further noted that assessee is a director of NDTV and holding a substantial stake and is in a position that can influence the decision of that company. Therefore, the actual nature of the transaction has to be examined by lifting the corporate veil, which would reveal that the assessee and NDTV are not distinct entities as far as this camouflages concerned and that both acted in connivance to evade the tax on capital gains. Accordingly, he made an addition of Rs47.31 crore at the rate of Rs136 per share being difference between the quoted prices of Rs140 per share and the cost shown of Rs4 per share on 34.79 lakh shares of the above company," the order from ITAT says. 
     
    The commissioner of I-T (appeal) upheld addition of Rs47.31 crore in the assessment. 
     
    In its order, the ITAT observed that RPR Holding did not have any assets except the assets in the form of shares of NDTV. "Further only purpose of transfer of the shares to that company was to obtain loan by pledging those shares considering the fair market value of the shares of NDTV, which is obviously the listed price of that company. Therefore, it is apparent that if the shares are transferred at Rs4 per share, the assessee will pay capital gain tax only considering the sale value of those shares at Rs4 per share, (if the whole transaction is not looked in to by complex agreement of loans) whereas RRPR Holding will obtain loan on those shares at the listed price of the shares of NDTV limited, free of interest. In a way, it was a methodology devised to pledge the shares of promoters to obtain interest-free loan for an indefinite tenure coupled with call option agreements to transfer the shares of NDTV. This shows a clear-cut benefit resulting into the hands of the Roys," the Bench said.
     
    As observed by the Securities Appellate Tribunal (SAT) in its recent order, RRPR Holding took a loan of Rs350 crore from ICICI Bank Ltd, at an interest rate of 19% per annum. This loan was required to be repaid within a stipulated period. Finding it difficult to repay the interest and principal amount RRPR Holding then took two loans from Vishva Pradhan Commercial Pvt Ltd (VCPL) totalling about Rs400 crore in July 2009 and January 2010.
     
    At present VCPL is controlled by Mahendra Nahta, who is a board member of Reliance Jip Infocomm.
     
    From their individual demat accounts, Dr Roy and Ms Roy transferred a total of 6,25,000 shares of NDTV to their joint demat account. On 19 June 2008, there shares were sold from the Roys' joint demat account. The Roys claimed that the shares sold were long-term capital gains (LTCG) asset and its cost of acquisition was only Rs4,092. The income thus earned was shown as LTCG that was challenged by the Income Tax department.
     
    The assessing officer (AO) held that shares transferred by the Roys from the joint demat account are short-term capital asset as they were acquired only on 28 December 2007 and sold on 19 June 2008 on first in-first out (FIFO) basis applicable to the dematarialsed securities. The AO also considered the cost incurred by the Roys for crediting the shares into the joint demat account on 28 December 2007, accordingly the computation resulted in short-term capital gain (STCG) of Rs1.30 crore each for the Roys as against the claim of LTCG.
     
    In an email to Economic Times, Dr Roy denied concealment of income, saying "...the ITAT ruling was to do with classification of the capital gains involved — whether short-term or long-term." Stating that the case involves “legal issues and technical tax law issues”, he told the newspaper that an appeal against the tribunal’s findings will be filed once courts reopen in July. 
     
    The ITAT also rejected the Roys contention that there was no benefit to them from the sale and purchase transactions as it was within the promoter group. "...the assessee (the Roys) entered into complex agreements with the lenders to realise the sale consideration in guise of loans from lenders,” the Bench stated in its order.
     
    RRPR Holding held shares of NDTV which is a listed company. "Based on the loan taken from VCPL it was alleged that the loan of ICICI Bank was liquidated.
     
    While taking a loan from VCPL certain agreements were entered, namely, that VCPL will give interest free loan for a period of 10 years on the condition that the principal amount would be paid within 10 years and that the VCPL will have a right of first refusal on 50% of the shares in the event the said shares are sold in the market. Further, a call option agreement was made whereby an option was given to two associates of VCPL for transfer of 30% of the shareholding of RRPR Holdings to it at the price of Rs214.65 per share. It was stated that, at the time the loan agreement was executed, the price of the NDTV share was Rs130 per share.
     
    It was also stated that the price of Rs214.65 per share was fixed in order to cover the loan amount of Rs403.85 crore. The agreement further stipulated that RRPR Holding would have the sole control and will not sell the shares without the right of the first refusal by the lender, namely, VCPL," the SAT had mentioned in its order.
     
    After considering the loan agreement between RRPR Holding and VCPL in detail, Securities and Exchange Board of India (SEBI) in its findings stated that the said loan agreement was nothing else but a sham agreement and that no prudent person or entity would enter into such an agreement giving a loan without any interest. In fact, SEBI found that the transfer of money, was to control the listed company NDTV. SEBI further found that the transfer of 9% individual shares of Dr Roy and Ms Roy to its holding company, RRPR Holding amounted to a non-disclosure of transfer of shares inviting violations of disclosure obligations, the SAT order noted.
  • Like this story? Get our top stories by email.

    User

    We are listening!

    Solve the equation and enter in the Captcha field.
      Loading...
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email

    BUY NOW

    online financial advisory
    Pathbreakers
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 3 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)