ZEUS Consulting » Blog

Highlights of New Proposed Goods & Service Tax (GST)

admin — Wed, 13 Nov 2013 07:05:37 +0000

The basic principal governing behind GST is to have single Taxation System for Goods and Services across the country. Currently Indian economy has various taxes on Goods and services such as VAT, Service Tax, Excise, Entertainment Tax, Luxury Tax Etc. now in the new Proposal of GST; we will be having only two taxes on all goods and Services as follows:

State Level GST(SGST)
Central Level GST (CGST)

In case of Central GST, following Taxes will be subsumed with CGST which are at presently levied separately on goods and services by Central government:

Central Excise Duty
Additional Excise Duty
The Excise Duty levied under Medicinal and toiletries preparation Act
Service Tax
Additional Custom Duty (CVD)
Special Additional Duty
Surcharge
Education Cess and Secondary and Higher Secondary education Cess

In case of State GST, following taxes will be subsumed with SGST; which are priestly levied on goods and services by State Governments :

VAT/ Sales Tax
Entertainment Tax (unless it is levied by local bodies)
Luxury Tax
Tax on lottery
State Cess and Surcharge to the extend related to supply of goods and services.

Direct Taxes code

admin — Wed, 13 Nov 2013 06:51:00 +0000

The Direct Taxes Code (DTC) is said to replace the existing Indian Income Tax Act, 1961 will be rolled in 2014. The highlights of the Direct Taxes Code bill are

Common threshold Income Tax limits and women proposed at 200,000 Rupees per annum (proposed), up from 180,000
10 per cent tax on annual income between 200,000-500,000; 20 per cent up to 1 million, 30 per cent above 1 million rupees
Tax burden at highest level will come down by Rs. 41,040 annually
Proposal to raise tax exemption for senior citizens to Rs. 250,000 from 240,000 lakh currently.(NOTE:- Union budget 2011-12 already has proposed it.)
Corporate Tax to remain at 30 per cent but without surcharge and cess
MAT to be 20 per cent of book profit, up from 18.5 per cent
Proposal to levy dividend distribution tax at 15 per cent
Exemption for investment in approved funds and insurance schemes proposed at Rs. 150,000 annually, against 120,000 currently
Proposed bill has 319 sections and 22 schedules against 298 sections and 14 schedules in existing IT Act
Once enacted, DTC will replace archaic Income Tax Act
However, many provisions in Income Tax Act will be a part of DTC as well
Mutual Funds/ULIP dropped from 80C deductions : Income from equity-oriented mutual funds or ULIP shall be subject to tax @ 5%
Fringe benefits tax will be charged to the employee rather than the employer

New Companies Act 2013 in the interest of stakeholders

admin — Wed, 13 Nov 2013 06:45:10 +0000

The Companies Act 2013 which is expected to be fully operational by April 2014, goes a long way in protecting shareholders’ interests and removes administrative burden in several areas. The Act brings modern regulations for the corporate sector and attempts to align with international requirements. There are many areas which are subject to rules that are to be issued under the new Act. The scale of change can be assessed only after rules are finally issued and the devil could be in the details. The Act would protect minority shareholders, investor protection and better framework for insolvency regulation, besides institutional structure. The Act promises to substantively raise the bar on governance and purports to deal with relevant themes such as investor protection, fraud mitigation, inclusive agenda, auditor accountability, reporting framework, director responsibility and efficient restructuring. The Act is likely to have far reaching consequences on all companies, as it has been influenced significantly by other recent developments in the corporate sector, especially those where stakeholder interests seemed to be compromised.

New US Law: Immigration Bill will decimate Indian IT companies

admin — Wed, 13 Nov 2013 06:44:34 +0000

The much-beloved India Caucus in the US House of Representatives organised the first-ever Diwali celebration on Capitol Hill recently, but it has also quietly deposited a very inauspicious gift at India’s door. It is called HR 15, a bill that if passed in its current form would essentially shut down Indian IT Companies or so reduce their strength as to make them negligible. It is one of the most anti-India pieces of legislation. Of the 135 members of the India Caucus, 63 have not only supported the bill but also co-sponsored it in a measure of serious support.