India will start imposing capital gains tax on investments coming from Singapore from April and fully withdraw exemptions in two years as the two countries agreed to amend a decade-old treaty after New Delhi rolled back similar concessions to Mauritius and Cyprus earlier this year.
With the amendments, announced by Finance Minister Arun Jaitley on Friday, investors based in Singapore will no longer benefit from tax exemptions on capital gains taxes.
Changes to the treaty with the Asian financial centre had been widely expected after India this year similarly re-drafted a 33-year old tax treaty with Mauritius. The tax treaty between India and Singapore had a provision that any changes in the Mauritius treaty would automatically apply to the one with the Asian country.
The move to tighten tax treaties is part of Prime Minister Narendra Modi‘s anti-corruption drive, which includes tightening loopholes for firms or rich individuals setting up a presence in jurisdictions with tax exemption treaties.
Regulators have long suspected rich Indians were routing cash through these tax jurisdictions, and channeling money back to India in a practice known as “round tripping”.
“We are able to give a reasonable burial to this black money route,” Jaitley told reporters at a news briefing. Capital gains tax will be imposed on investments from Singapore that are made from April onwards. The tax rate will be half the prevailing Indian rate for the next two years and rates will then be equated by April 2019. Jaitley said.
Singapore has been an increasingly popular source of foreign investment into India.Foreign direct investment flows from Singapore stood at $50.6 billion between April 2000 and Sept 2016, contributing more than 16 percent to total capital inflows during that period, second only to Mauritius.
According to Abhishek Goenka, partner, direct tax, PwC India, the renegotiation of the tax treaty with Singapore marks the culmination of a long process of renegotiation of the three key treaties that India had which provided exemptions from capital gains tax, ie, Mauritius, Cyprus and Singapore. Due to this the final outcome with regards to the Singapore treaty is not a surprise and most investors were expecting that it would mirror the new Mauritius treaty, which is what it is as far as capital gains is concerned.
However, he said the press release lacks clarity on some of the key provisions.
“It remains to be seen whether the existing limitation of benefits clause will continue to apply for the 2 year phase out period, or whether there will be a somewhat diluted requirement. The press release does not have details on whether there is also a reduction in the rate of withholding tax on interest to 7.5% as in the case of Mauritius. This will be a critical aspect before there can be complete parity between the two treaties,” Goenka said.
First Published On : Dec 31, 2016 10:15 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Patiala House Court has sent ex-IAF chief SP Tyagi and two others to judicial custody till December 30 in AgustaWestland chopper case on Saturday. All three accused had filed bail applications in the Patiala House Court. The court will hear bail matter on December 21.Tyagi along with other accused in the AgustaWestland chopper case was produced before the Patiala House court as their Central Bureau of Investigation (CBI) custody ends.Earlier, the CBI had moved court seeking a 10-day custody to interrogate Tyagi and the other accused in the case. Last Friday, the CBI had arrested Tyagi, his cousin Sanjeev and lawyer Gautam Khaitan.The Rs 3600-crore deal to supply 12 VVIP helicopters from AgustaWestland came under the scanner after Italian authorities claimed that the company paid bribes. Tyagi has been accused of influencing the deal in favour of AgustaWestland during his tenure as the IAF chief, however, he has repeatedly denied the allegations. CBI said that they have received ‘incriminating documents’ from Italy and Mauritius against the formet IAF chiefWith agency inputs.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Ex Air Force Chief SP Tyagi along with other accused in the AgustaWestland chopper case will be produced before the Patiala House court on Saturday as their Central Bureau of Investigation (CBI) custody ends.Earlier, the CBI had moved court seeking a 10-day custody to interrogate Tyagi and the other accused in the case. Last Friday, the CBI had arrested Tyagi, his cousin Sanjeev and lawyer Gautam Khaitan.The Rs 3600-crore deal to supply 12 VVIP helicopters from AgustaWestland came under the scanner after Italian authorities claimed that the company paid bribes. Tyagi has been accused of influencing the deal in favour of AgustaWestland during his tenure as the IAF chief, however, he has repeatedly denied the allegations. CBI said that they have received ‘incriminating documents’ from Italy and Mauritius against the former IAF chief.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Central Bureau of Investigation (CBI) has not received complete responses in any of the Letter Rogatories (LR’s) it sent to eight countries to seek information on money trail related to the infamous AgustaWestland scam.According to official sources, the probe agency has sent eight LRs, which are basically judicial requests, since 2013 and has received “partial information” from six countries. Two of the eight countries have not even sent partial information even after the probe agency registered an official FIR on March, 2013.According to CBI officials, the probe agency during its investigation, that will enter its fourth year in March next year, sent LRs to Italy, Tunisia, UAE, Singapore, Mauritius, British Virgin Island, UAE and Switzerland. Excluding Singapore and UAE, six countries have sent a “partial execution report” which means that if the probe agency had sent 10 questions seeking information related to the AgustaWestland deal, only some of the queries have received a response.Official sources told DNA on Thursday that investigators probing the Rs 3,726 crore chopper scam have sent multiple reminders to the authorities in the eight countries requesting them to send out information about the scam. The latest reminder was sent to Mauritius which sent a response in November this year however the response too was a partial execution report.”Its a massive investigation and a major part of the probe involves accessing documents and data lying in various countries. When a probe such as AgustaWestland spreads to multiple countries, coordinating with authorities of those countries can be time consuming,” a senior CBI official told DNA, adding that authorities abroad have been cooperating with the probe agency so far.The CBI made its first arrests in the case on December 9 when it took into custody former Indian Air Force chief SP Tyagi, his cousin Sanjeev Tyagi and advocate Gautam Khaitan in the case related to procurement of 12 AW VVIP choppers from UK-based firm during the UPA-2 regime.According to the FIR, the CBI contended that in 2005, the former air chief abused his official position to change the consistent stand of the Indian Air Force (IAF) on the service ceiling of the VVIP choppers from 6000 metres to 4500 metres.On January 1, 2014, India scrapped the contract with AgustaWestland over alleged breach of contractual obligations and charges of paying kickbacks.The CBI alleged that the bribes were routed through multiple companies in India and abroad and involved middlemen and other individuals, including British national Christian Michel and Italian nationals Guido Haschke and Carlo Gerosa. Companies including Finmeccanica, AgustaWestland, Mohali-based IDS Infotech, Aeromatrix, IDS Tunisia and IDS Mauritius have also been named in the 2013 FIR by the CBI.The accused were first sent to CBI custody twice by a Delhi court. The CBI in its argument seeking custody claimed that crucial information was collected from three countries — Italy, Switzerland and Mauritius — via LRs and the accused were required to be confronted with it to unearth the larger conspiracy in the chopper deal case. Interestingly, authorities in Italy too has sent partial execution report, sources said.
The Delhi BJP’s decision to go door-to-door with laddoos for those queuing up for their own money post demonetisation may be inspired by the old Indian age of the mithai, err, fruit of patience being sweet. But, in India’s hinterland, the reward of this patience is not just laddoos: Those in the queues are feasting on aloos (potatoes), foreign currency and even on bites of flesh.
A few days ago, while driving through a town in western Rajasthan, we came across a sight that’s now part of the Indian landscape. Outside a SBI Bank branch, people were queuing up at 5 am for currency notes.
“The situation has improved. Things are getting better. Earlier they used to queue up at 4 am,” our local driver said with a smirk. “Ok, now watch the fun,” he said. So we decided to wait.
Within a few minutes, pandemonium broke out in a queue meant for women. Amidst the fisticuffs, one women bit another’s arm, leading to a free-for-all, necessitating the arrival of cops, who quickly dispersed the queue with their sticks.
Start again, please. In the meantime, eat laddoos.
In the past week, traders in Kanpur distributed hundreds of kilos of potatoes free on Express Road, a busy intersection in the country’s leather capital. The reason: potato prices had slumped to less than Re 1 per kg since the demand had fallen because of shortage of cash. Since cold-storage of potatoes costs much more, traders decided to distribute potatoes gratis before they turn into garbage.
So there, at least one recorded benefit of demonetisation: Free potatoes.
Five days ago, a panic-stricken friend called up from Mauritius to find out if he should cancel his India tour with a family of 12, including six kids. “I hear they are not exchanging foreign currency. How will we survive?” he asked.
So, I decided to find out. “Sorry, there are no new currency notes available. They have all been sucked out of supply,” the owner of a currency exchange told me. “But, if you are ready to pay a premium, I can arrange some new notes,” he volunteered. How much? “The exchange rate is Rs 71.75, but I can get you 67,” he replies. That’s a neat profit (in black, of course) of around Rs 5 on every Euro (or Dollar) exchanged. And a mind-boggling rate of return on almost negligible investment. “Hoo-ah”, as Al Pacino famously exclaimed in Scent of a Woman, achche din are already there for those in the business of exchanging notes. Calls for laddoos!
Incredible India! Yes, of course, wait till the tourists go back to their countries and narrate incredible stories about how they had to beg, borrow and sing for survival during their dream vacation in India.
Let me come to the point: Demonetisation has had a huge impact. But, not only where it was intended. If the government was intending to act like a pinch-hitter before polls in Punjab and UP, it has also ended up scoring some self-goals. If it was counting on a surgical strike, some of the blast from the missile has hit its supporters too.
Soon after the decision was announced, the BJP relied on the Prime Minister’s charisma to build the narrative of the momentary pain being a sacrifice for the cause of the nation. As Firstpost has argued out in the past, suffering is noble only till it is less than that of the neighbour. What passes off as suffering in our pop culture of hypocrisy is just envy; the misplaced belief that cutting off your nose would spite the neighbour’s face. Doesn’t work.
In the context of demonetisation, the light at the end of the suffering was greed. Many held on to the belief that once the rich are deprived of their loot, the Robin hood of politics would distribute the largesse among the poor, especially through cash rewards in bank accounts. The imagery of the surgical strike on demonetisation was similar to a marauder raiding the enemy land at the head of mercenaries, promising them a share of the war-exploits. They thought, as the saying goes, there were laddoos in both hands.
But, that doesn’t seem to be happening. Windfall gains for RBI that were expected in various circles now appear a distant dream. The economy is reeling because of the lack of supply of notes and the consequent fall in demand. The unorganised sector is facing a temporary shutdown. Erstwhile Modi supporters like former HDFC chief Deepak Parekh and journalist Tavleen Singh are now worried about its impact. And, as former finance minister P Chidambaram argues, the decision has been slammed by a large number of economists and hurt the livelihoods of several Indians.
Also, the hunters themselves now appear turning into the hunted. A report in Rajasthan Patrika claims a sting operation by the government has revealed the evidence of widespread corruption in the entire system. The newspaper says the home ministry is sitting on the evidence of fraudulent transactions in thousands of bank accounts. In addition, a large number of the nearly 25 crore Jan Dhan accounts are under the scanner of income tax sleuths.
If, and it is a big if because of the numbers involved and the impact on elections, thousands of account holders and bank staff are grilled or prosecuted, they would certainly not be eating laddoos, or letting the BJP devour them in the next polls.
Since this is about sweets, let us revisit a famous laddoo story of the BJP. On 8 November last year, on the morning of the counting of votes in Bihar, the BJP started distributing laddoos the moment it heard that the first trends were predicting victory for it.
Within a few hours, as results pointed to a BJP rout, the sweets were all thrown away on Patna’s Bir Chand Patel Road for cows to eat.
On demonetisation too, the BJP should perhaps hold back the laddoos till people count their cash.
First Published On : Dec 13, 2016 16:03 IST
Firing a fresh salvo at the Prime Minister Narendra Modi over his electoral promise to bring back black money stashed aboard, Shiv Sena questioned on Tuesday how many citizens have received Rs 15 lakh in their bank accounts.”Bringing back black money was the first promise Modi had made prior to elections. Recently, in his monthly radio programme ‘Mann Ki Baat’, he warned those who had stashed money abroad to come clean or face the heat. This warning itself means that the snake is still in the burrow and refuses to come out,” Sena said in an editorial in its mouthpiece ‘Saamana’.<!– /11440465/Dna_Article_Middle_300x250_BTF –>Modi, during the 2014 Lok Sabha election campaign, had prominently highlighted the issue of black money and had promised to bring it back. He had said that every citizen will receive Rs 15 lakh in their bank accounts. “Before (Lok Sabha) polls, Modi had said black money worth around Rs 2 lakh crore is stashed in foreign banks and had promised Rs 15 lakh in the bank account of each citizen. Two years in power, how much of it has been brought back?” the BJP ally in the state asked.
ALSO READ BJP spreading falsehood, rumours; trying to stifle voice of those who speak truth: Shiv SenaIt also took potshots at the BJP which recently organised ‘Mann Ki Baat’ programme at 10 spots in the city, facilitating citizens to listen to the PM’s radio show. “‘Mann Ki Baat’ is like hot tea and in a bid to attract listeners, several areas in Mumbai had catered free tea. The country is undergoing a change. We do not want free tea, we want the promised Rs 15 lakh deposited in our bank accounts,” Sena said.It claimed that the election system stands on black money and that not just businessmen, film stars or terrorist organisations deal with black money but politicians form a part of the process as well. “That explains why every party wants businessmen to work with them. One does not need to scout Switzerland or Mauritius to reclaim black money…Modi can succeed in his mission if he unearths black money that is circulating within the country,” Sena said.
Singapore: The United Kingdom is likely to explore direct bilateral trade agreements with India post the vote to exit from the European Union, thereby giving a boost to slowing UK-India trade, Development Bank of Singapore (DBS) said on Tuesday.
“Post exit EU, the UK is likely to explore direct bilateral trade agreements with other trading partners, including India,” DBS said in a research note.
“This might provide an alternate route to India, in comparison to the tough and the drawn-out negotiations on the EU Free Trade Agreement, in turn providing a fillip to a slowing India-UK trade,” said DBS.
Noting that the UK accounts for 15 percent of India’s total merchandise trade, the report said this share has, however, been declining. Trade in services has also eased.
The report highlighted the notable investment links between both countries.
The UK is the third largest inward investor into India, after Mauritius and Singapore, with cumulative foreign direct investment (FDI) equity investments of $22.7 billion (from April 2000 to December 2015), or eight percent of the total FDI inflows.
In turn, India is the third largest investor, based on the number of projects, into the UK.
Indian businesses that tap the UK domestic markets are unlikely to face many challenges, DBS said.
“However, firms that intend to utilise UK as a base to gain access into European markets might have to rethink plans,” it added, pointing to the Brexit issues involved.
A risk here is the imposition of trade barriers, scrapping preferential rates and higher taxes between the UK and the rest of EU, which might pose a hurdle for foreign companies to invest in the UK.
These factors could slow investment flows from India to the UK, until more clarity is available in this regard, according to DBS.
“The situation is quite fluid at this stage and thereby risks of sporadic volatility in the G3 currencies (US dollar, euro, Japanese yen) and associated shakeout in the global markets should not be ruled out, especially as focus is on EU’s ability to deal with fresh crisis,” it said.
Meanwhile, on the issue of the stalled India-EU free trade agreement, Indian Commerce Minister Nirmala Sitharaman said in New Delhi last week that the dates for resuming talks had possibly got linked to the Brexit issue.
“We are waiting for the dates. It is my doubt that because they (EU) are waiting for the outcome of Brexit, they have not yet given the dates as yet. The moment they give the dates, we will be keenly wanting to continue the talks to reach the conclusion at the earliest,” she told reporters.
New Delhi: The Enforcement Directorate on Monday conducted raids at 10 places in Delhi, Mumbai and Hyderabad in connection with its ongoing money laundering probe in the Rs 3,600-crore AgustaWestland helicopter deal.
“ED conducted searches at 10 premises located in Delhi, Mumbai and Hyderabad in AgustaWestland case,” an ED official said.
The official said the agency also issued freezing orders under Prevention of Money Laundering Act (PMLA) against shares worth Rs 86.07 crore owned by companies in Dubai, Mauritius and Singapore.
ED is probing the case in which Rs 360 crore were allegedly paid as kickbacks by Finmeccanica, the parent firm of AgustaWestland, to execute the deal for 12 helicopters in its favour in the “guise of” transactions for performing multiple work contracts in the country.
The agency had lodged a case in July, 2014 against former Indian Air Force chief S.P. Tyagi, businessman Gautam Khaitan, his wife Ritu, three Italian middlemen – Christian Michel James, Guido Ralph Haschke and Carlo Gerosa – and 13 others in the case.
The Central Bureau of Investigation (CBI) is also conducting separate investigation into the AugustaWestland’s AWA101 helicopter deal.
To expedite tracking the money trail in the AgustaWestland chopper scam, the ministry of external affairs (MEA) on Thursday wrote to eight of its missions abroad to send reports about executions of letter rogatory (LR), sent by the Central Bureau of Investigation (CBI).Confirming that they had received a request from the CBI seeking to speed up the LRs, or in other words judicial requests, MEA spokesperson Vikas Swaroop said that the missions in Italy, Tunisia, Mauritius, Singapore, the British-Virgin Islands, the UK, the UAE and Switzerland have been asked to update on execution of LRs.<!– /11440465/Dna_Article_Middle_300x250_BTF –>The CBI sources had earlier said that they won’t be able to further investigate the money trail and ascertain the links till they get a response from these countries. Swaroop said the MEA has once again written to these missions from where the execution reports are pending. “We have impressed upon them the need to expeditiously execute the LRs and to send their corresponding execution reports at the earliest,” he said.According to CBI sources, so far they have got a complete response from Italy and partial reply from the British Virgin Islands, the UK and Tunisia. It is yet to get a formal reply from the UAE, Singapore, Switzerland and Mauritius. It is also believed that on Wednesday, the former board member of Aeromatrix, Gautam Khaitan, has purportedly admitted to having received payments from middlemen Carlo Gerosa and Guido Haschkhe in the VVIP chopper deal. He has allegedly admitted setting up IDS Tunisia, a subsidiary of IDS India, the firm which was one among the many through which the alleged bribe was routed by the middlemen from AgustaWestland to other countries, the sources said.Khaitan, an advocate and a former board member of Aeromatrix – which was allegedly used to route bribe amount, is named in the CBI FIR as one of the accused. The agency had registered a case against former Indian Air Force (IAF) chief SP Tyagi along with 13 others including his cousins and European middlemen. Tyagi was accused of reducing flying ceiling of the helicopter from 6,000m to 4,500m (15,000ft), which put AgustaWestland helicopters in the race for the deal. If not for this, Agusta choppers are not qualified for even submission of bids.On Thursday, Khaitan was being further questioned by the CBI even as Tyagi, who too was summoned, was grilled.Meanwhile, Agusta continued to rock Parliament on Thursday too. Congress and opposition parties stepped up the heat on BJP government seeking authentication of documents by Subramaniam Swamy and demanding discussion on alleged GSPC-KG Basin scam.Raising the issue during zero hour, Congress member Anand Sharma sought to know how Swamy got access to sensitive and confidential files of CBI and ED in the matter.The House “must know how an honourable member or rather a less honourable member” was given access to sensitive and secret files, which he has refused to authenticate and place on the table of the House, Sharma asserted.Taking cognizance, deputy chairman PJ Kurien said if Swamy had not complied with his ruling to authenticate all the documents he was quoting from and place them on the table of the House, the rule will take its own course.“The ruling has to be complied with,” Kurien said.While Congress members protested, minister of state for parliamentary affairs, Mukhtar Abbas Naqvi stated that Swamy had authenticated and placed the documents on the table of the House.But this did not stop Congress as Pramod Tiwari claimed that a national TV channel was showing how government agencies were putting pressure through religious missions to get the Gandhi family implicated in Agusta scam.“Some traitors are taking money from other countries to create disorder here… and destablise the country,” alleged Tiwari.However, Kurien stopped him saying it was not a question of point of order and disallowed Tiwari.Separately, Congress spokesperson Jairam Ramesh, on the question that other defence deals during UPA regime are also under scanner, said that “if there are any deals on which there any question marks, by all means, have them investigated…I don’t think that we have anything to feel defensive about.”
Enforcement Directorate has obtained, from the courts, a total of ten LRs to countries like Tunisia, Italy, United Kingdom, Switzerland, United Arab Emirates (UAE), Mauritius, Israel, Finland, Singapore and Denmark Enforcement Directorate (ED) is expected to issue follow up requests on its earlier Letters Rogatories (LRs) to at least ten countries in connection with its money laundering probe in the Rs 3,600 crore AgustaWestland VVIP chopper deal case.Officials said while seven of the LRs (judicial requests) have been already dispatched, three are being sent.The agency has obtained, from the courts, a total of ten LRs to countries like Tunisia, Italy, United Kingdom, Switzerland, United Arab Emirates (UAE), Mauritius, Israel, Finland, Singapore and Denmark in order to obtain details about the financial transactions that have taken place in the case by the accused firms and individuals named in its charge sheet filed before a court here last year. They said the agency is also expected to summon former Indian Air Force (IAF) chief S P Tyagi for questioning in the case in the near future. He has been questioned by CBI last year.<!– /11440465/Dna_Article_Middle_300x250_BTF –>A court in Italy’s Milan has recently sentenced Italian defence and aerospace major Finmeccanica’s former chief Giuseppe Orsi and the former CEO of the firm Bruno Spagnolini on corruption charges in the sale of a dozen AgustaWestland helicopters to India for VVIP purposes.Apart from filing a charge sheet, the ED has also attached assets worth Rs 11 crore belonging to the cousins of Tyagi and Italian national and alleged middleman in the case Christian Michel James.The CBI, meanwhile, is getting the order of the Milan Court of Appeals translated from Italian to English even as it is yet to get a certified copy of the order for which it has made a request to the government.Agency sources said they have got copy of the order informally which will be studied.
A local court on Thursday issued a non-bailable warrant against Union Minister YS Chowdary as he “failed” to appear before it in connection with a criminal complaint filed by Mauritius Commercial Bank Ltd.The XII Additional Chief Metropolitan Magistrate (Nampally, Hyderabad) issued the warrant against Chowdary, the Union Minister of State for Science and Technology. Mauritius Commercial Bank Ltd had filed the complaint in the court accusing Chowdary and others of “defaulting in repayment of loan of Rs 106 crore”.<!– /11440465/Dna_Article_Middle_300x250_BTF –>The bank had submitted that it had lent Rs 100 crore to Heistia Holdings Ltd, a subsidiary of Sujana Universal Industries Ltd, and had secured a decree from a London court. Chowdary is now a Non-Executive Director of Sujana Universal Industries Ltd.According to the counsel of the Bank, the company stood as guarantor for the loan availed for Heistia Holdings Ltd, which is its subsidiary and the company has to repay Rs 106 crore to it. Subsequently, the Bank had filed several litigations against Sujana Universal Industries Ltd.In the past, Chowdary had been asked to remain present in the court after issuing summons based on the criminal complaint. However, Chowdary “failed” to remain present before the court on three successive occasions. “We submitted before the court today that the minister was taking excuses and flouting the orders of the court on a regular basis. We also argued that this was a fit case for issuance of NBW as the accused was evading the process of the court and the court was pleased to issue non-bailable warrant against the minister,” Sanjeev Kumar, Partner Luthra & Luthra Law Offices, a Delhi-based law firm that is representing the Mauritian Bank, said in a statement.On the other hand, a statement issued by Y S Chowdary said “I have been just informed that a NBW has been issued against me by the Court of the XII Additional Chief Metropolitan Magistrate (Nampally, Hyderabad). Owing to pressing public duties in public interest, I was unable to appear on the previous dates. I have the highest regard for the judiciary and never had any intention to evade or avoid appearing in the court. The orders of the court will be complied with.” The matter has been posted for hearing on April 26.