The controversial GAAR provision in India, which seeks to check tax avoidance by investors routing their funds through tax havens, will come into effect from 1 April 2016, a government notification said.The provision of General Anti Avoidance Rules (GAAR) will apply to entities availing tax benefit of at least Rs 3 crore, according to the notification dated 23 September.It will apply to foreign institutional investors (FIIs) that have claimed benefits under any Double Tax Avoidance Agreement (DTAA).Investments made by a non-resident by way of offshore derivative instruments or P-Notes through FIIs, will not be covered by the GAAR provisions.Investments made before 30 August 2010, will not be scrutinised under GAAR, it said, adding the provisions will apply to assessees that obtain tax benefits on or after 1 April 2015."Stockmarkets will have a lot to cheer as FIIs which do not seek to avail of treaty benefits will not be subjected to GAAR. Investment in Participatory Notes will not be subject to GAAR," Deloitte Haskins & Sells Partner N.C. Hegde said.The GAAR provisions were introduced in the 2012-13 Budget by then Finance Minister Pranab Mukherjee to check tax avoidance and were to have come into effect from April 1, 2014. The proposal generated controversy, with investors getting apprehensive about harassment by tax authorities.To soothe the nerves of jittery investors, Finance Minister P. Chidambaram in January announced the postponement of the implementation of Chapter X-A of the I-T Act (dealing with GAAR) by two years to 1 April 2016. A business arrangement can be termed 'impermissible' if its main purpose is to obtain tax benefit. Under the original GAAR proposals, the anti-tax avoidance provisions could be invoked "if one of the purposes" was to obtain tax benefit."Where a part of an arrangement is declared to be an impermissible avoidance arrangement, the consequences in relation to tax shall be determined with reference to such part only," the notification said.The assessing officer has to issue a show-cause notice, with reasons, to invoke GAAR provisions and also has to give an opportunity to an assessee to explain whether an arrangement was 'impermissible.' The government's decision to amend the provisions was in response to fears by investors that the tax department, armed with discretionary powers, would crack the whip even in cases where tax avoidance was not the intent.The notification is broadly in line with recommendations of the Parthasarathi Shome Committee, which was set up by Prime Minister Manmohan Singh in July last year to address the concerns of investors."From the notification, it is apparent that many recommendations of the Shome Committee have been accepted.However, the benefit of grandfathering has been limited - firstly, to investments made before 1 August 2010, and secondly, only for benefit up to March 31, 2015," said Rahul Garg, Direct Tax Leader at PwC India.(PTI)
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When Prime Minister Manmohan Singh last visited the White House in 2009 he was feted at US President Barack Obama's first state dinner, a star-studded affair that reflected the excitement about blooming ties between the two big democracies.Back then, optimists in Washington saw India as a counterbalance to a rising China and a new engine for the US economy. In a dinner toast, Obama talked of his "duty" to bring the two countries closer.That duty has only been partly fulfilled. As the two leaders prepare to meet again at the White House on Friday for a working bilateral meeting, Obama is under pressure from lobby groups and lawmakers seething at what they see as India's protectionism and lax enforcement of intellectual property rights.India's $60 billion trade with the United States is widely seen as less than it could be and is just an eighth of U.S. trade with China. Even India's national security adviser accepts there is a perception the relationship is drifting off course."It arises from the macro-economic situation. US friends mention concerns about economic reforms and specific policy issues in India. These concerns are not unique to the U.S. They are, first and foremost, of concern to Indians," National Security Adviser Shivshankar Menon said on Friday.India has still not shaken off memories of foreign domination through trade and it is increasingly hard for the government, ahead of elections next year, to push ahead with economic reforms and deals seen as favouring U.S. companies.In turn, Indian IT firms which operate in the United States are angered by restrictions on travel visas for skilled workers.In June, fourteen US business groups took the unusual step of forming a coalition specifically to pressure Obama over India's perceived protectionist measures, piracy and patent laws.Indian sourcing rules for retail, IT, medicine and clean energy technology are contentious and U.S. companies gripe about "unfair" imports from India of everything from shrimp to steel pipes. In July, more than 170 U.S. lawmakers signed a letter to Obama about Indian policies they said threatened U.S. jobs.Even U.S. Vice-President Joe Biden grumbled about India's reluctance to open up to U.S. companies, or align with the United States on the world stage, during a visit to Mumbai in July.Traditionally, India has been reluctant to get too close to any one big power and Singh is heading to Russia and China over the next two months on trips his staff have described as "economic diplomacy".Full SpectrumTo be sure, India and US ties are closer now than they have ever been, thanks in part to a 2008 civil-nuclear pact forged by Singh and then President George W. Bush that ended India's isolation after nuclear weapons tests and cleared the way for closer defence ties.Menon last week described a "full spectrum" relationship of defence, economic and commercial ties with the United States, a far cry from the wariness during the Cold War when India had warm ties with the Soviet Union.The United States still sees India as a counterbalance to China and in a sign of the level of trust, revelations in the Indian media about spying by the U.S. National Security Agency on Indian institutions, including its embassy in Washington. have not led to a spike in tension, at least in public.From almost zero in 2008, India is now buying billions of dollars of defence equipment from U.S. suppliers, including a $640 million deal to buy six C-130J Super Hercules from Lockheed Martin <LMT.N> that might be signed during Singh's visit.The Indian cabinet on Wednesday approved a preliminary contract with Toshiba's <6502.T> U.S. nuclear unit Westinghouse relating to a major nuclear power plant project - the first such deal under the 2008 agreement and likely to be signed in Washington.But the fact that it took five years to reach even a preliminary deal to work on reactors, because of worries about Indian liability laws for nuclear suppliers, underscores the problems U.S. companies face doing business in India."The Americans want to know what Singh and Sonia are ready to do to get the Indian economy back on track, and the Indians want to know what the Americans intend to do in Afghanistan and Pakistan after 2014," said Bruce Riedel, who advised four U.S. presidents on South Asian affairs, referring to Sonia Gandhi, the president of the ruling Congress party.India fears that the withdrawal by U.S. and other Western forces from Afghanistan next year will expose it to more Islamist violence, including attacks by Pakistan-based groups.(Reuters)
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The overseas unit of Indian state explorer Oil and Natural Gas Corp plans to raise $1.5 billion to refinance a bridge loan that it expects to finalise soon to buy a 10 per cent stake in Mozambique's Rovuma gas field from Videocon group."Currently the market conditions are good. We have time of about one year, but we will refinance the bridge loan in three to four months," ONGC Videsh finance director S.P Garg told reporters.ONGC, along with state firm Oil India, acquired a 10 per cent stake in the Mozambique gas field from Videocon for $2.48 billion. ONGC separately acquired another 10 per cent stake in the block from Anadarko Petroleum Corp for $2.64 billion later.(Reuters)
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The cabinet has approved auction of coal blocks to private companies, Coal Minister Sriprakash Jaiswal said on Tuesday, enabling the government to allot coal mining licences through competitive bidding for the first time.Coal mining licences used to be allocated on recommendations of a panel of top bureaucrats across ministries, but the federal auditor censured the process last year saying it lacked "transparency" and probably deprived the government of billions of dollars of potential revenue between 2004 and 2011.India relies on coal to fuel more than half of its power generation, but state-run monopoly Coal India Ltd, that accounts for around 80 percent of the country's output has been unable to dig out coal fast enough to feed the country's growing power demand.(Reuters)
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The cabinet approved its shale gas and oil exploration policy on Tuesday, 24 September, a minister said, but gave no further details.India, the world's fourth-largest consumer of energy, could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of the country's gas demand, according to the U.S. Energy Information Administration.But production from shale remains a long way off for India, which relies on imports for much of its energy needs.(Reuters)
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India's summer-sown grains output could rise only a little due to patchy rains but overall an above average monsoon will help boost output of other crops, helping curb food price inflation.Monsoon rains covered all of India almost a month ahead of schedule, but were below average in rice growing areas of eastern states Bihar, Jharkhand, West Bengal and Odisha.The output of summer-sown grains is expected to rise 0.9 per cent to 129.32 million tonnes in the crop year that began in July, government sources said.A marginal increase was due to better production estimates for pulses and oilseeds though there would a small fall in the rice harvest, said the sources, who did not wish to be named as Farm Minister Sharad Pawar is scheduled to release this year's official farm output numbers on Tuesday.Farmers in India plant rice, corn, cane, cotton, soybean in the rainy months of June and July. Harvests start from October.The output of summer-planted rice in the 2013/14 season is seen marginally lower at 92.32 million tonnes against 92.76 million tonnes in the previous year."Rainfall was patchy in key rice growing eastern states like West Bengal and Odisha at the start of the season. It affected transplanting. Heavy rainfall in some areas in August also dampened yields," said Nalini Rao, an analyst with India Infoline, a brokerage.Monsoon rains irrigate 55 per cent of farmland in India, one of the world's biggest producers and consumers of rice, sugar, soybean, edible oils and cotton.Analysts said a marginal fall in rice output is not a matter for concern as the government is sitting on huge stocks of the grain."A slight fall is rather good news for the government which has been grappling with storage problems. In terms of availability, India has more than ample stocks," said Tejinder Narang, advisor of Emmsons India Ltd, a trading company.On September 1, India's rice stocks at government warehouses were 21 million tonnes against a target of 9.8 million tonnes.Bumper harvests since 2007 have led to massive stocks of rice and wheat, forcing the government to store food in open fields where stocks are exposed to rains and rodents.Massive stocks have made it easier for the government to implement a $20 billion plan to give ultra cheap rice and wheat to 67 per cent of India's 1.2 billion people.Patches of heavy rains in the second half of the rainy season prompted some fears of vegetable crop damage in south, central and western India and stalled planting of onions, pushing food inflation to a three year high level in August.Conservative EstimateThe government updates its forecast as it gathers information about crop planting."It is the first estimate for the 2013-14 crop year and it is a conservative estimate which should be revised upwards as harvests progress," said another government official who did not wish to be named as he is not authorised to talk to the media.Any fall in rice output could be compensated in the winter season which begins from October, Narang said.Growers plant summer-sown rice from June, while the winter-planted variety is transplanted from October.(Reuters)
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Chidambaram's statement was in response to Modi's reported claim of economic growth rate during Vajpayee government being 8.4 per cent.Finance Minister P Chidambaram charged Gujarat Chief Minister Narendra Modi with staging a "fake encounter with facts" regarding his claims of economic growth during BJP-led NDA being 8.4 per cent and said nothing can be further from truth."The average for the six year period (under Atal Bihari Vajpayee government from 1998-99 to 2003-04) was 6.0 per cent and the average for the last five years (1999-2000 to 2003-04) was 5.9 per cent," he said in a statement here.In contrast, the average growth rate during Congress-led UPA's first term was 8.4 per cent and 7.3 per cent during the first four years of UPA-II, he said."The two worst years since the turn of the century were 2000-01 (4.3 per cent) and 2002-03 (4 per cent)," he said giving out yearly GDP growth rate during the six years of NDA rule under Vajpayee.Chidambaram's statement was in response to Modi's reported claim of economic growth rate during Vajpayee government being 8.4 per cent."Nothing can be further from the truth... I wonder why Shri Narendra Modi should stage a fake encounter with facts.Ultimately, facts will prevail," the Finance Minister said."If there was a golden period of growth, it was the five year period under UPA-1," he added.(PTI)
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Click to view the range of luxury accessories (This story was published in BW | Businessworld Issue Dated 07-10-2013)
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At a time when stress levels are hitting the roof, words of American poet and author Sylvia Plath come to mind: “There must be quite a few things that a hot bath won’t cure, but I don’t know many of them.” Sure, one can have a hot bath at home, but imagine being surrounded by opulence and serenity, and pampered and goaded to forget your worries ensconced in man-made nature’s lap. It doesn’t get better. No wonder the Indian wellness industry is expected to touch the Rs 1 lakh crore mark by 2015. So, if you’re in need of some TLC, Lovina Gidwani Jha, founder and creative strategist of Spa Guide-n-Light and an expert when it comes to telling spas what they should and shouldn’t do, is the go-to person. Here’s her pick of luxury spas in India that are bound to take you a step closer to nirvana. Ananda in the Himalayas Garhwal, UttarakhandIndia’s first destination resort spa, Ananda is a restored palace in the picturesque foothills of the Himalayas, just above Rishikesh and by the river Ganga. It offers therapeutic treatments based on the principles of Ayurveda, yoga and meditation. Every treatment is customised by a spa expert in accordance with a guest’s nutrition, detoxification, stress management, beauty and relaxation needs. Ananda even offers retail therapy through its exquisite spa boutique that stocks everything from organic food to spa music.www.anandaspa.com Kaya Kalp, The Royal SpaAgra, Uttar PradeshSpread across 99,000 sq. ft in the city of the Taj Mahal, ITC Hotels’ Kaya Kalp is the largest spa in India. It has been designed to recreate the splendour of the Mughal dynasty, with pomegranate (a fruit brought to India by Babur) as its principal theme. The spa offers India’s first, luxurious white-marble Royal Mughal Hamam — a private bathing area where the guest is given a Persian-style body scrub, soaping and relaxing head massage — besides Ayurveda, indigenous local treatments and other international therapies. The rejuvenating ‘Passage to India Spa Journey’, combining guided meditation with Ayurveda, is also a must-try. www.itchotels.in/hotels/itcmughal/kayakalp/spa-agra Sereno Spa, Park Hyatt GoaThis wellness and fitness destination spa alongside Arossim beach is set in lush beachfront gardens in idyllic south Goa. Sereno offers a range of holistic massage therapies, the most popular of which are the Synchronised Abhayanga (four hands massage) and Marma Massage (which includes massaging the crown chakra). The spa combines Ayurveda and yoga, and is the first Indian spa to offer the Sarvanga Swedan Yantra, or whole body medicated steam bath. This is performed in a special cubicle with aromatic herbs that help detoxify the body.goa.park.hyatt.com/en/hotel/homeOberoi Spa, Wildflower HallShimla, Himachal PradeshSituated in the lap of the Himalayas, Wildflower Hall is a fairytale luxury resort amid virgin woods of pine and cedar. The Oberoi Spa offers holistic Ayurveda, Oriental and Western treatments in private spa suites or pavilions with spectacular views. Other than the usual line-up of exotic body scrubs, floral baths, beauty treatments and personalised yoga sessions, the spa also offers the unique experience of therapeutic sound and vibrations of Tibetan singing bowls to cleanse and enhance the chakra energy centres of the body. www.oberoihotels.com/spas Maya Spa, The Zuri KumarakomKumarakom, Kerala Amid the Kerala backwaters, The Zuri Kumarakom houses southern India’s biggest spa with two separate wings — one for Ayurvedic treatments and the other for Western/Oriental styles. On the shores of the Vembanad Lake, Maya Spa offers a wide range of hydrotherapies, natural health therapies and solutions. It also features the unique ‘body temple and meditation island’, and the famous Shirodhara and The Cloud 9 massages.www.thezurihotels.com/ kumarakom/maya-spa Amatrra spa, Hotel Ashok New DelhiClaiming to be India’s only metropolitan lifestyle spa, Amatrra fuses the concepts of Astroscience, Ayurveda and Naturopathy in its treatments. The idea is to create, harmonise and balance individual energy in a spa experience. This is also evident in the ambience, therapies, food menu, beauty services, as well as the product line. The spa has spacious self-contained treatment suites, including Kerala Ayurveda treatment rooms, Oriental treatment rooms, mediation rooms, etc., and even a ‘couple suite’. www.amatrraspa.com Myrah Spa Mumbai, MaharashtraMyrah is a luxurious day spa — with Zen-like interiors, brocade backdrops, crystal chandeliers and ornate gold mirrors creating a balance of opulence and serenity — that gives guests a welcome relief from the hustle and bustle of Mumbai. Myrah offers a bouquet of global spa therapies such as the Asian blend massage, aroma signature massage, Thai yoga massage, etc. Its facials are one of Mumbai’s best, and the spa also offers a pregnancy menu. www.myrahspa.com The Six Senses Spa, Jaypee Greens Golf & Spa ResortGreater Noida, Delhi NCRThe Six Senses Spa is a unit of the globally renowned Thailand-based Six Senses Spa. Luxuriously spread over 90,000 sq. ft, with beautiful courtyards, it offers a wide array of holistic therapies for complete harmony of mind and body. The spa’s philosophy of balancing all the senses is creatively represented in the spa menu, which features signature, personalised and locally inspired treatments, Asian and Ayurvedic therapies, oxygen facials, etc, all administered by expert therapists. On offer is also colonic hydrotherapy, as well as classes for yoga, pilates, meditation, qi gong and tai chi. www.sixsenses.com Asian Roots Luxury SpaNew DelhiAsian Roots is an award-winning luxury spa that merges the various traditional therapies from Bali, Japan, Thailand and India to offer its guests a novel and holistic experience. As the name suggests, the ambience and décor of the sprawling two-level spa are Asian. It boasts of state of the art medical technology, and apart from spa and salon services, it also offers cosmetic dermatology and hair transplant treatments, and has cricketers Virender Sehwag and Gautam Gambhir vouching for it. It also has sister concerns in Ahmedabad and Bangalore. www.myasianroots.com Spa la Vie Mumbai, MaharashtraBearing the name of the house of L’Occitane en Provence, the leading French cosmetics brand, Spa la Vie is a Mediterranean wellness sanctuary in the Lower Parel area of Mumbai. It features signature L’Occitane therapies, with soaking and emollient properties, in freestanding bathtubs and private steam chambers in every treatment room. Guests can pamper themselves with shea from Burkina Faso and Immortelle from Corsica, or experience a Provencal wrap in one of the city’s first stone heated hammam beds.www.itsmyvie.com/loccitane-spa-la-vie-mumbai Inputs from Shruti Chakraborty(This story was published in BW | Businessworld Issue Dated 07-10-2013)
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India is making a last-minute push to close a nuclear deal in time for a meeting between U.S. President Barack Obama and Prime Minister Manmohan Singh, who has made atomic energy cooperation with Washington a hallmark of his tenure. Under the proposed deal, India would contract Toshiba's US nuclear unit Westinghouse for preliminary works, including information sharing, a senior Indian official said. The aim is to build nuclear plants in the state of Gujarat. "I think we're close," National Security Adviser Shivshankar Menon said on Friday. "I think they're hoping to do a pre-early works (agreement), which involves some transfer of proprietary information." Singh is due to meet Obama in Washington on Sept 27. Westinghouse were not immediately available for comment. After U.S. Secretary of State John Kerry raised the issue on a trip to India in June, the company said it expected the agreement to be finalised in September. The value of the preliminary contract has not been revealed. Indian officials say the proposed deal between Westinghouse and NPCIL would be the first time money is committed to a commercial U.S. nuclear supplier since Singh staked his career on a civil nuclear pact with U.S. President George W. Bush five years ago. A commercial contract, however small, could breathe life into Singh's flagship policy as he nears the end of a decade in office amid grumbling in Washington that ties with India have failed to deliver rewards for U.S. businesses. Many see the 2008 pact as Singh's crowning achievement, in one stroke ending years of isolation following atomic weapons tests in 1974 and 1998 and heralding a new era in the often fraught relations between the two democracies. But on the nuclear front, progress has been slow because laws governing liability in the case of accidents took several years to finalise and when they came, put the onus on the equipment suppliers. "Not just the U.S., ... Indian domestic suppliers, other foreign partners, all ask questions: how will this law work? How will it apply?" Menon said. "They need to know in order to do business. We're in the process of addressing those questions, with them individually and as a whole, so that we ourselves also have clarity." Rules drawn up in 2011 limit the liability of suppliers and were seen as softening the law. The preliminary deal with Westinghouse would not involve putting in place nuclear equipment, so would not immediately brush up against the liability issue, Indian officials said. Westinghouse has safety approval from U.S. nuclear authorities for the AP 1000 reactor it wants to sell India. The preliminary deal must be cleared by two Indian committees before Singh leaves for the United States on Wednesday, two Indian officials said, asking not to be named. "The two governments have resolved government to government permissions and understandings necessary to enable commercial negotiations between NPCIL and Westinghouse," Menon said. A third official said the Westinghouse deal would show foreign nuclear suppliers that India was committed to doing business with them. "They want an assurance that they have a foothold in the country," said the official, who asked not to be named. "This has to be cleared before we go to America." The last-minute dash for clearance has been criticized by Indian opposition parties, who accused the government of trying to bypass due process and water down the liability law. After a TV station reported on Thursday that a note from the prime minister's office suggested skipping the approval of one committee to get the deal ready in time, the opposition Bharatiya Janata Party said the government wanted to "give a gift" to U.S. companies. India's Department of Atomic Energy issued a statement denying any shortcuts were being considered. India aims to lift its nuclear capacity to 63,000 megawatts in the next 20 years by adding nearly 30 reactors. It currently operates 20 reactors at six sites with a capacity of 4,780 MW, or 2 percent of its total power capacity, according to NPCIL.(Reuters)
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