New Delhi, April 6 (IANS) India is set to exchange tax evasion information with all G20 countries by 2017-18, as a step to address cases like those coming out of “Panama Papers” in which over 500 Indians are said to have invested in foreign accounts, sources in the finance ministry said.
“By 2017-18, India will have automatic exchange of information (AEIO) with all the G20 countries. As many as 96 countries, including the UK, Germany and France, already have a consensus on AEIO and more countries will join this gradually,” a government official told IANS.
The recently revealed cases like “Panama papers” would not have occurred, had India had an accord on the common reporting standard (CRS) under automatic exchange of information with other countries, the official told IANS.
Common reporting standard falls under AEIO, which allows for countries to exchange foreign investment details of its citizens, to check tax evasion and stashing of unaccounted wealth in tax havens.
The information exchange agreement will enable the government to clamp down on tax evasion as off-shore accounts of citizens will be curtailed substantially with information on accounts, interest payments and beneficial ownership being shared between countries.
India was a part of the Early Adoptor Group of this automatic information exchange framework. It joined the global efforts during an Organisation for Economic Cooperation and Development (OECD) meeting in October 2014.
The first exchange of information on new off-shore accounts opened in 2016 and at the end of 2015 will take place in 2017, as agreed upon by the Early Adoptor Group. The global standard of automatic exchange of information was developed by the OECD in July 2014.
Finance Minister Arun Jaitley said on Monday adventurism in avoiding taxes will prove costly.
“This is a stern reminder to all of us that with the G20 initiatives, FATCA (Foreign Account Tax Compliance Act) and bilateral transactions in place with effect from 2017, the world is going to be a far more transparent institution,” he told industry captains.
“The world is becoming one where adventurism, like in the past, is going to be increasingly a risky proposition,” Jaitley said at the CII Annual Session.
Last year, India signed a convention on administrative assistance in tax issues. In 2014, the G20 nations agreed to a new global transparency standard for around 90 countries and jurisdictions to begin automatic exchange of tax information.
Cabinet nod for increased corpus for funding exports to Iran
New Delhi, April 6 (IANS) With a view to promoting India’s exports to Iran, the union cabinet on Wednesday approved an increase in the corpus for funding the purchase of goods and services from India to Rs.3,000 crore.
The hike comes in the wake of a framework agreement between the Exim Bank of India and a consortium of Iranian banks led by the Central Bank of Iran.
“The increase to Rs.3,000 crore (from Rs.900 crore) will enable the Exim Bank to provide buyer’s credit facility to Iran, secured via sovereign guarantee from Iran, for the export of goods and services. It will help Indian companies penetrate and enhance their footprint in Iran,” a cabinet communique said.
“This will be done by utilising the Export Development Fund (EDF). The proposal provides for domiciling two contracts of export of steel rails by the State Trading Corporation and for the Chabahar port development project, previously approved by the cabinet under the EDF,” it added.
India’s Exim Bank and seven Iranian banks led by the Central Bank of Iran had negotiated a framework agreement in November 2014 for financing the purchase of goods and services from India by Iranian entities to the tune of Rs.900 crore under the EDF. The limit has now been raised.
The cabinet had, in February, approved to provide 150 million dollars in credit from the Exim Bank for the development of the Chabahar port in Iran.
The Chabahar port outside the Persian Gulf will help expand maritime commerce in the region. India is negotiating this project to facilitate the growing trade and investment with Iran and other countries in the region, notably Afghanistan.
According to a memorandum of understanding signed in May 2015 between India and Iran, India will equip and operate two berths in the Chabahar port Phase-I with a capital investment of 85.2 million dollars and with an annual expenditure of 22.9 million dollars on a 10-year lease.
Renewable energy challenge to fossil fuel in power sector: Moody’s
New Delhi, April 6 (IANS) Growth in the renewable energy capacity in India’s power sector will challenge fossil fuel operators in the future, leading global ratings agency Moody’s said on Wednesday.
“The rising share of renewables in India’s generation mix — as the country grows substantially its proportion of renewable energy over the next 5-7 years — creates challenges for conventional power generators,” Moody’s said in its Asia Pacific Weekly for March 30 to April 6.
According to the ratings agency, in the forecast period of the next 5-7 years, India will be a power surplus country pressurising the utilisation rates of thermal power generators.
State-run oil firms now given operational, financial autonomy
New Delhi, April 6 (IANS) The union cabinet on Wednesday permitted national oil companies autonomy in operational, financial and investment matters, not requiring them any more to seek the cabinet approval in this regard.
The permission was given in view of the vast and quick changes in the global oil market for over a year.
“In a far-reaching decision today (Wednesday), the cabinet has decided to vest all PSU (public sector undertaking) oil companies the power to pursue their own policies, autonomy to take spot decisions, and act according to exigencies required by market conditions,” Communications Minister Ravi Shankar Prasad told reporters here after the cabinet meeting.
“The only condition to this autonomy is that the decisions should adhere to CVC (Central Vigilance Commission) guidelines and have the approval of the company board of directors,” he said.
“The decision is designed to give autonomy to all PSU oil companies in operational, financial and investment matters. They need not first come to the cabinet for approval,” the minister added.
Noting that the global oil market has become very flexible in terms of the way prices have fallen over 70 percent through last year, before firming up somewhat, Prasad said that companies now needed to take spot decisions dictated by market conditions.
“Government has been laying down guidelines from time to time, but also allowing flexibility in terms of autonomy to take decisions,” he said.
Andrew Yule allowed to convert its Rs.29.91 crore loan to equity
New Delhi, April 6 (IANS) The Cabinet Committee on Economic Affairs (CCEA) on Wednesday allowed public sector enterprise Andrew Yule & Co. to issue its equity shares to Bank of Baroda against its working capital loan worth Rs.29.91 crore borrowed from the bank.
The CCEA, chaired by Prime Minister Narendra Modi, has given its approval for conversion of working capital term loan amounting to Rs.29.91 crore from Bank of Baroda (BoB) into equity by issuing requisite number of equity shares of Andrew Yule & Co. Ltd. (AYCL) as preferential issues to BoB as qualified institutional buyer, a statement said.
The statement said the price would be based on market price determined as per guidelines of the Securities and Exchange Board of India (SEBI) on date of acquiring of shares by BoB.
The conversion of loans into equity would bring down the cost of debt servicing of Kolkata-based enterprise by Rs.2.86 crore per annum.
“This will be implemented within a period of three months,” it said.
This is expected to increase growth and profitability of Andrew Yule and in turn is likely to translate into better share price of the company at the time of further disinvestment of the Centre’s shares in the company.
As part of implementation of financial restructuring scheme, BoB extended a loan of Rs.52.49 crore to the company in 2009. Of this, Rs.29.91 crore was working capital loan. The power equipment maker proposed conversion of the loan worth Rs.29.91 crore taken from BoB into equity.