MONTH THAT WAS

Taxman’s discretion may be eliminated

NEW DELHI: Tightening the noose further around black economy, the government may abolish discretionary powers of tax officers in deciding liabilities for evasion, said NITI Aayog Vice-Chairman Arvind Panagariya. He also hinted that stamp duty for real estate dealings may be eased with a possible rise in on-the-book property deals in the wake of the ongoing crackdown on unaccounted wealth.

“We have to also go back and begin to think much more seriously about a whole set of tax reforms, which would both bring in simplification and precision in the definition so that you reduce, and hopefully even eliminate, discretion of tax officers on this matter,” Panagariya told private TV channel India Today in an interview.

Panagariya, a former chief economist of the Asian Development Bank, was responding to questions on possible follow-up measures to the November 8 announcement of ban on 500 and 1,000-rupee banknotes. “A lot of evasion of taxes happens when there’s too much discretion on the part of officers. So, we need to simplify,” he remarked.

“Simplification”, he explained, “would mean doing away with (tax) exemptions. In addition, (we need to) also define situations much more precisely so that it leaves no room for discretion for the tax officers to decide whether under such and such situations you are liable to tax, you are not liable to tax.”

The government, Panagariya said, is beefing up enforcement against tax cheats in the real estate sector. At the same time, concerns over the high rates of the stamp duty should also be taken care of, he suggested. “On real estate, we need to begin to enforce it better. But we need to address the issue of stamp duty. Is it too high?” he asked. “If the transactions are going to come in white, probably the amount for which the transaction is taking place would rise.”

Asked whether he foresaw a drop in stamp duty, Panagariya answered “that’s something we ought to have on the table”. The NITI Ayog chief stoutly defended Prime Minister Narendra Modi’s demonetisation of the country’s biggest notes, which has come under heavy attack from a host of economists, including former prime minister Manmohan Singh. 

“Stamping out corruption on a large scale has not been tried in a developing economy in the past,” Panagariya argued. “This is the first time, where in a developing economy, a Prime Minister says that look we got to do a clean-up job here and systematically proceeds to do that.” He described Modi’s currency ban as an “essential step”.

Demonetisation Corruption: 30 Senior bank officers suspended

New Delhi: In a major crackdown on bank employees involved in irregularities post demonetisation, as many as 30 senior officials of various public sector banks have been suspended and six others transferred to check corrupt practices.

The suspensions comes amid reports of Income Tax authorities conducting search and seizure places at many places, including one at Bengaluru where Rs 5.7 crore cash in new currency notes was recovered from two businessmen.

Some cases have come to notice of officials involved in carrying out transactions which were irregular and violative of RBI’s instructions, the Finance Ministry said in a statement. "Action has been taken in such cases and 30 officials of various public sector banks have been placed under suspension and six officials have been transferred to non-sensitive posts,” it said.

It also cautioned that while all efforts are being made to facilitate genuine transactions, “illegalities will not be tolerated and appropriate action will be taken against individuals involved in irregular and unauthorised activities”.

Following the decision of the government to demonetise of old Rs 500/1000 notes from midnight of November 8, 2016, people have been depositing the invalid notes into banks.

The Reserve Bank has put in cash withdrawal limits for individual as well as businessmen.

The ministry further said that banks have done commendable work by putting in long hours of untiring effort in managing banking transactions.

In the biggest-ever seizure of cash in new currency, over Rs 5 crore even as the Income Tax department said it detected unaccounted income worth Rs 152 crore after it conducted searches in a dozen premises in Bengaluru and other locations.Earlier, RBI had asked banks to take action against erring officials to ensure cash availability for customers thronging banks.

No water to Coke and Pepsi: Court

New Delhi: In a major development, the Madras High Court has ordered that water from the river Tamirabarani in Tamil Nadu must not be diverted to Coca-Cola and Pepsi producing plants in Gangaikondan due to the severe water shortages in the area.

The Madras High Court passed the interim injunction disallowing river water to the bottling plants for two months on November 21, 2016. The order was obtained by India Resource Center.

The court order came as the result of a public interest litigation filed by FEDCOT, a statewide consumer organization, which had sought to stop the use of river water for production of Coca-Cola and Pepsi product because water scarcity has diminished both drinking water as well as water for irrigation in the area.

Acknowledging the ongoing water crisis and taking note of a decision made by the Indian Supreme Court, the Madras High Court in its November 21, 2016 order noted that, “It is the duty of the State as well as this Court to ensure the livelihood and the welfare of the general public, by making these natural resources available to them, instead of diverting the same for commercial purpose.”

The High Court order is a major setback for Coca-Cola and PepsiCo in India and signals the emergence of new challenges the companies will face even when using surface water.

So far, both Coca-Cola and PepsiCo have faced significant setbacks for using groundwater, including plant closures, denial of licenses for operating new plants, restrictions on the amount of groundwater used, and more stringent regulations on groundwater usage.

As a result of the widespread campaigns against Coca-Cola and PepsiCo for their mismanagement of groundwater resources, both companies planned to increase reliance on surface water for their bottling plants.

In April 2015, Coca-Cola’s plans to set up a new bottling plant in Erode using water from river Cauvery was also rejected by the state government due to immense community opposition.

The Coca-Cola and PepsiCo producing bottling plants that have been denied river water in Gangaikondan are operated by co-packers for Coca-Cola and PepsiCo, and the co-packers have entered into contracts to manufacture the respective companies’ products exclusively.

Dr D A Prabakar, Chairman of FEDCOT who has led the legal efforts, was pleased with the interim injunction although he also expected a legal challenge by the soft drink producers in the Supreme Court.  FEDCOT has also plans to create public awareness along the banks of river Tamirabarani.

Woman dies as hospital refuses to take old notes

Patna: Taking suo moto cognisance of media reports about the death of a pregnant woman in a government hospital in Gaya after being allegedly refused dialysis for paying in old Rs 500 notes; Bihar Human Rights Commission (BHRC) directed the district magistrate and the hospital to submit a detailed report within a fortnight.

“The news if true reflects a shocking neglect on the part of functionaries at the government-run premier hospital at Gaya. Issue notices to the district magistrate, Gaya, and superintendent of ANMMCH to file a report to the Commission within a fortnight,” BHRC member Neelmani said in his order.

BHRC took suo motu cognisance of media reports that the woman, wife of a daily wage earner had “renal shutdown” and died at the Anugrah Narayan Magadh Medical College and Hospital (ANMMCH), Gaya, as its dialysis centre refused to accept old Rs 500 notes, it said.

Neelmani said while scrapping high-value currency notes on November 8, the Centre had clearly said the defunct notes would continue to be accepted by government hospitals till November 24 but the patient, Manju Devi, died on November 23 evening.

The patient had gone to the government hospital for treatment but the hospital had outsourced the work of dialysis to a private company, he said and asked “Why would a patient suffer for the internal arrangement of a hospital?” The commission posted the matter for hearing.

IT Deptt refunds Rs.7700crores without authorization

New Delhi: The Constitution of India provides that no money should be withdrawn from the Consolidated Fund of India except under appropriation made by law.

"An expenditure on interest on refunds amounting to Rs 7,704 crore was incurred by the Central Board of Direct Taxes, without the authorisation of Parliament during the year 2015-16,” said the Comptroller and Auditor General of India (CAG) in a report tabled in Parliament.

A total expenditure of Rs 55,939 crore on interest payments had been incurred over the last eight years without obtaining approval of Parliament through necessary appropriations despite the recommendations of the Public Accounts Committee, it added.

The Union Government’s Finance and Appropriation Accounts for 2015-16 along with the Audit report of the CAG were presented in Parliament.

This is the third time since Independence and the second consecutive time since last year that the Annual Accounts of the Union Government have been tabled in Parliament in the same calendar year, the Finance Ministry said in a statement.

The report also said, out of the total receipts of Rs 9,835.70 crore towards Universal Access Levy (UAL) during 2015-16, the Department of Telecommunications transferred Rs 3,100 crore to the Universal Service Obligation Fund (USO Fund).

It was in turn utilised to meet the expenditure of Rs 3,099.97 crore on identified objectives and the closing balance under the USO Fund was shown as Rs 0.03 crore.

Further, against the total collection of UAL of Rs 75,952.93 crore during 2002-03 to 2015-16, a total sum of Rs 30,083.47 crore was transferred to the Fund during these period.

"The remaining levy of Rs 45,869.46 crore was not transferred to the USO Fund,” the report said.

CAG also pointed out that against the total collection of Rs 73,468.52 crore as Secondary and Higher Education Cess (SHEC) during 2006-07 to 2015-16, no amount could be transferred to the earmarked fund in Public Account as neither the schemes were identified on which the cess proceeds were to be spent nor the designated fund was opened in the Public Account to deposit the proceeds of SHEC.

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Take off veil to hear you: Judge

Sydney: A judge in Australia has denied to hear evidence from the wife of an Islamic extremist after she refused to remove the veil of her burqa despite being offered alternative options.

Moutia Elzahed, one of the two women married to convicted criminal and Islamic extremist Hamdi Alqudsi, is suing the police alleging they punched her and called her a “bitch” during the Operation Apple by terrorism raids at her Revesby home in south-west of the Sydney on September 18, 2014.

In what is believed to be an Australian first in a civil case, that New South Wales (NSW) District Court judge Audrey Balla would not let Elzahed take the stand unless she took off her veil. Elzahed refused to take off her burqa and she failed to turn up to the fourth day on November 30 of the hearing.

Her lawyer Clive Evatt said, for religious reasons, his client could not show her face to any man. Judge Balla gave Elzahed a choice; she could have the court closed while she gave evidence or she could give evidence via video link.

But Evatt declined both options on his client’s behalf because the mostly male lawyers on both sides would still be in court and would see her face.