`To speak so indirectly I am loath: I would say the truth'

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It is enacted in the laws of Venice, Portia informs Shylock in The Merchant of Venice, that if it be proved against an alien that by direct or indirect attempts he seeks the life of any citizen, “the party ‘gainst the which he doth contrive shall seize one half his goods; the other half comes to the privy coffer of the state; and the offender’s life lies in the mercy of the duke only, ‘gainst all other voice.”

While one may wonder if taxes too aren’t similarly seizing in nature, this story is about how the taxman made direct attempts to fight, right at the apex court, on an ‘indirect’ issue.
Hero Exports, Ludhiana, had filed its returns computing export profits, net of expenses both direct and indirect. The taxman took the view that the profits were overstated, owing to a lower amount of indirect expenses.

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E-governance would be used as the strong arm of the regulator to catch tax offenders

Is tech-driven compliance lending fizz to taxes?

How do you reconcile these numbers: Economic engine growing at 10 per cent and direct tax kitty swelling at 40 per cent? “Clearly the result of increased compliance,” says Mr Manasvi Srivastava , Vice-President Operations in BMR Managed Services, New Delhi.

“Since the growth numbers of taxes are so out of sync with growth in economy and the extra collection is indicative of increased compliance, the question of estimating the residual non-compliance assumes importance,” he adds, in the course of a recent e-mail interaction with Business Line.

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A package containing a pre-packed commodity

Is refrigerator a `packaged commodity'?

Whirlpool, a manufacturer of refrigerators, was recently caught in a whirlpool of interpretations when fighting against the Excise Department. Getting thawed in the process, at the apex court, was the definition of `packaged commodity' under the SWM (Standards of Weights and Measures) Act, 1976.

The company was not so much against the valuation as per Section 4A of the Central Excise Act, 1944 as it was aggrieved by the demand that MRP (maximum retail price) be printed on the package of the refrigerator manufactured by it, according to Notification No. 9 of 2000.

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Taxability of an FII’s income

What happens when sub-accounts convert to FII status

Conversion of a sub-account to FII (foreign institutional investor) could potentially trigger tax consequences, which may well be significant, cautions Mr Vipul R. Jhaveri, Partner, Deloitte Haskins & Sells, Mumbai.
“Unless FIIs get to evaluate the same, they may expose themselves to a tax burden that they may neither have anticipated nor bargained for,” he adds, during an e-mail interaction with Business Line.
As per the market regulator’s draft proposal on participatory notes (PNs), FII sub-accounts will not be allowed to issue PNs; and an 18-month-period has been stipulated for winding up derivatives positions taken through the PN route.
“From the income-tax perspective, it would be very important to see the conversion process that SEBI (Securities and Exchange Board of India) prescribes and, in particular, whether it will involve a ‘transfer’ of securities under the Income-Tax Act, 1961 (the Act),” explains Mr Jhaveri.

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