Monday December 11, 2017
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Reward for reporting VAT evasion

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By NewsGram Staff Writer

New Delhi: Delhi government will be introducing a reward scheme for those who will provide them information in order to  check and detect value added tax evasion in the city. The eligibility criteria for the reward, its quantum and release shall be decided by a reward evaluation committee headed by the commissioner, VAT, or his nominee.

Photo credit: indiahomes.co.uk
Photo credit: indiahomes.co.uk

“The informers will be suitably rewarded in case the information leads to realization of additional tax revenue. On inspection, if an additional demand of tax amounting to at least Rs 10 lakh is created and realized, the informer shall be eligible for reward up to 7.5 per cent of the additional tax demand created and realized or Rs 10 lakh,” said a press statement by the government. The identity of the informer is to be kept confidential.

The press release also said, “The scheme also includes provision of an advanced reward up to a maximum limit of Rs 25,000 to the informer upon successful search and seizures, an interim reward of an amount proportionate to the deposit of additional admitted tax as a result of assessment proceedings which shall be released after expiry of three months of such assessment order without any objection or appeal.”

 

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HSBC under probe for abetting tax evasion

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image: www.hsbc.com

Indian tax department had issued a warning notice to global banking massive HSBC to prosecute its Swiss and Dubai offices for allegedly abetting tax avoidance by four Indians and their families.

The tax authorities continuing the investigation on UK-based HSBC which was disclosed on Monday, regarding alleged abetment of tax evasion through its Geneva branch. HSBC said that it is cooperating with the authorities and hoped a ‘’significant’’ financial impact as a result of these investigations.

According to tax authorities, they have sufficient evidence against HSBC involvement in illegal activities. HSBC  had been scanned under Reserve Bank of India also which revealed the dissonance in the banking operations, including allowing a decoy customer to open a  suspicious account in September 2014.

HSBC was examined by Indian tax authorities after the leaked list of hundreds of Indian clients of its Geneva branch from French and German.

This will help Indian government to fight against black money which is allegedly stashed in Switzerland, there have been apprehensions that the illegal money has been shifted to some other place like Dubai in recent years. Similar lists made in other countries also, prompting probe.

HSBC said that it had first issued its summons in February 2015 from tax authorities while fresh notices were issued in August and then in November during the announcement of annual results, without disclosing the names of Indians who were involved in the tax evasion through its Swiss and Dubai units.

The bank on Monday reported a revenue of $1.84 billion in 2015, up from $1.74 in 2014 from Indian operations. However, it has a profit of $606 from India operations, including from global banking and market business. For India, its customer account had the balance of $11.8 billion at the end of 2015, up from $11.7 billion in 2014.

Meanwhile, the RBI report alleges that HSBC could have possibly optimized the violation of Foreign Exchange Management Act (FEMA) by allowing customers to bank with offshore private banking locations.

A sample check of HSBC’s outward remittances has found that bank has breached the limits under the Liberalised Remittance Scheme, which allow Indians to open accounts abroad, reported RBI. It also reported on alleged deficiencies in KYC procedures.

The UK-based bank has been under the scanner of financial sector regulators in many countries. In December 2012, the US authorities had slapped a fine of $1.9 billion on the lender for breaking US anti-money laundering rules. (Inputs from agencies)

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Income Tax department searches offices of Apollo Hospitals group

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Chennai/Hyderabad: The Income Tax department on Tuesday searched offices of the Apollo Hospitals group in Chennai and other places for possible tax evasion.

Department officials declined to comment on the issue further.

“The IT department visited our hospitals today (Tuesday) and we extended our complete cooperation to them. We have always conducted ourselves with the highest degree of diligence and would like to reassure our patients, shareholders, and stakeholders that we shall uphold their trust and faith in us,” the group said in a statement.

Meanwhile, when reports of the search operation first came in, shares of Apollo Hospitals, which had scaled a high of Rs.1,497, fell to Rs.1,431.55 on the Bombay Stock Exchange.

The shares, however, staged a recovery when unattributed statements from the department said the operations were a routine affair. The scrip finally ended at Rs.1,466.75, with a gain of Rs.19.60, or 1.35 percent, over the previous close.

As part of its searches, the Income Tax department on Tuesday stalled financial transactions of the group at Hyderabad.

Department officials closed two blocks at the group’s main facility in Jubliee Hills.

Sources in the hospital told IANS that the administration and management blocks were closed as part of the searches in Chennai and New Delhi.

This was apparently being done to prevent manipulation of records. Sources, however, said the day-to-day operations of the hospital were not affected.

This was the first time in 33 years that the department conducted searches at Apollo Hospitals.

Apollo, which has its corporate headquarters in Chennai, also has a significant presence in Delhi. In Hyderabad, its hospitals at three locations have a total bed strength of 1,200.

In Andhra Pradesh, Apollo has a 150-bed hospital in the coastal city of Visakhapatnam and a small rural facility in Chittoor, the district its founder Prathap C. Reddy comes from.

The Apollo Hospitals Group, started by cardiologist Prathap C. Reddy as a 150-bed hospital in 1983, now operates 9,200 beds across 64 hospitals, as per information available with the company. Its founder is a recipient of the Padma Vibhushan.

The group is now run by his four daughters — Preetha Reddy, Shobana Kamineni, Suneeta Reddy and Sangita Reddy. (IANS)(Photo: Youtube)

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Black Money: India ups ante against tax evaders

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By NewsGram Staff Writer

New Delhi: Out of the promises that brought Indian Minister Narendra Modi to fore a year ago, a major one from the dreamy list was to bring back billions of dollars of black money that the country’s super-rich had stashed abroad. In a bid to live up to the same, his government has introduced a string of tough new measures in recent months to crack the whip on black money.

Photo credit: ecointersect.com
Photo credit: ecointersect.com

The anxiety has deepened in recent weeks as a government-imposed tax payment deadline for those who have stashed their cash in foreign accounts approaches on September 30.

The Associated Chambers of Commerce and Industry of India recently issued a statement denouncing the new law for creating “fear and panic” among industry leaders and trading professionals.

“People are uneasy and worried. The penalty and term of imprisonment are disproportionately high,” said Nishith Desai, a corporate lawyer in Mumbai. Industry experts say the rich are frantically searching for new tax havens and other ways to evade the law. No one knows for sure how much black money is hidden in India and overseas.

However, estimates range from $400 billion to over $1 trillion.

India’s history as a socialist-leaning country unfriendly to business with endemic corruption meant that the country’s rich routinely hid their wealth by hoarding cash and jewellery.

India’s ‘shadow economy’ accounts for over 20 per cent of its economic output. Only 3 per cent of the country pays income taxes. This was revealed by a World Bank estimate in 2010.

Two years ago, the investigative portal Cobrapost conducted a sting on 28 top state-owned and private banks across India in which executives were filmed on hidden camera offering to channel vast sums of customers’ unaccounted cash into the formal banking system. Real estate is another common hiding place for untaxed money.

“Land is where Indian politicians and businessmen park the maximum amount of black money. About 30 per cent of all land transactions across India are managed in cash,” said Pankaj Kapoor, founder of the real estate research firm Liases Foras in Mumbai.

According to the election watchdog Association for Democratic Reforms, 80 per cent of the income of five national political parties comes from unknown sources.

black-money-may-25-sll“In the disclosures of our elected politicians, you can see the assets have grown but their income and income tax payment have not grown proportionately. How do you explain that?” asked Ramesh Padmanabhan, a senior chartered accountant in Bangalore.

“The process of formalising the informal economy is underway in India,” said Rajeev Chandrasekhar, an independent MP (Karnataka and Bangalore Urban constituency). “A lot of people who are used to an old model of doing business in India are uncomfortable today about the new scrutiny.”

During his election campaign, Modi made the claim that so much money was stashed overseas that if he repatriated it he could deposit Rs 15 lakh into the account of every poor person.

“The big fish must not get away,” Indian Finance Minister Arun Jaitley said when the black money law passed in May.

But interviews with chartered accountants, tax officials and businessmen reveal that in recent months many of India’s wealthy have found new ways around the scrutiny.

A favourite tactic, accountants said, is sending family members abroad for 182 days, after which time they become “non-residents” with foreign accounts and businesses where the family members can stash money.

So far, only one wealthy person has reported black money holdings and paid the tax and penalty.

SC questions Centre on black money

For representational use only
For representational use only

After a seemingly long slumber, the Supreme Court on September 4 put the spotlight back on black money by questioning the Centre to detail the action taken on the special investigation team’s (SIT) recommendations, advocating stringent measures against irregularities in capitation fees, cricket, stock markets and trade-based money laundering.

A bench of Chief Justice HL Dattu and Justices Madan B Lokur and AK Sikri asked attorney general Mukul Rohatgi, “What is the fate of these recommendations by the Supreme Court-appointed SIT? The Centre will tell us about it in the next hearing on October 28.”

The story draws its source from IANS & TOI.