New Delhi, September 26
The government has notified the controversial anti-avoidance tax rules, which will be implemented from April 2016 and apply to business arrangements with a tax benefit exceeding Rs 3 crore.

The General Anti Avoidance Rules (GAAR) provisions will come into force from April 1, 2016, the Central Board of Direct Taxes (CBDT) said in a notification dated September 23.

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 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 10A of the Income-Tax Act (dealing with GAAR) by two years to April 1, 2016.

According to the notification, GAAR would be applicable to foreign institutional investors that have not taken the benefit of an agreement under Section 90 or Section 90A of the I-T Act or Double Taxation Avoidance Agreement (DTAA).

The GAAR provisions would not apply to business arrangements where the "tax benefit in the relevant assessment year arising, in aggregate, to all parties to the arrangement does not exceed a sum of Rs 3 crore."

The notification said investments made by a non-resident through foreign institutional investors (FIIs) would not be covered by the GAAR provisions. "Stock markets will have a lot to cheer as FIIs which do not seek to avail of treaty benefits will not be subjected to GAAR. Similarly, investment in participatory notes will not be subject to GAAR," Deloitte Haskins & Sells Partner NC Hegde said. Investments made before August 30, 2010, would be spared from the GAAR net, according to the notification.

Under the modified norms, a tax official needs 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.' 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. 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 the intent was not tax evasion. — PTI

New Delhi, September 26
Power Minister Jyotiraditya Scindia today said his ministry has sought a Cabinet approval for the gas pooling policy and it would also be looking at a clearance for capping the price of gas for the power sector at $5 per mmBtu.

Addressing the media here, he said the Power Ministry would also seek the Cabinet nod to grant independent regulatory authority status for Power System Operation Corporation Ltd (POSOCO).

Currently, POSOCO is a wholly owned subsidiary of Power Grid Corporation of India (PGCIL).

Looking to insulate power producers from higher gas price by seeking a subsidy from the Ministry of Finance under the proposed policy, Scindia said, "We will soon approach the Cabinet for fixing the price of gas at $5 per mmBtu (Million Metric British thermal unit) for the power sector".

His ministry had opposed higher price for domestic gas when the Cabinet Committee on Economic Affairs approved the Rangarajan formula that worked out to a gas price of $8.4 a million British thermal unit in April 2014.

Scindia said the power sector could absorb a gas price of $5. “Any gas supplied beyond $5 will be unviable,” he said adding the government has made it clear that any additional gas produced in the country will be diverted to the power sector after meeting the requirement of urea plants.

Last month, the minister had said that power projects would get the surplus gas until March 2016, after which the situation will be reviewed again. The decision would benefit projects with a combined capacity of over 7,800 MW, he had added.

The power ministry is seeking Rs 11,000-crore subsidy payout to cover the cost of hiked electricity tariffs. Gas pooling would help in getting stranded gas capacity of about 18,000 mw of the ground.

It is seeking parity for electricity utilities with fertiliser units in the allocation of gas after a drop in output from RIL’s KG-D6 block led to reduced domestic supplies. In March this year, electricity generating stations stopped getting gas from KG-D6.

Scindia said he was also moving the Cabinet for a granting independence to POSOCO, a subsidiary of Power Grid Corporation. The Power Minister also said the Government was considering extension of financial restructuring programme (FRP) for state electricity distribution utilities (Discoms) of four more states - Jharkhand, Bihar, Andhra Pradesh and Karnataka. 

New Delhi, September 26
Amid talk of Reliance Industries being denied a higher price for gas due to output from KG-D6 not matching targets, Oil Minister M Veerappa Moily today said the new gas pricing policy will apply uniformly to all.

"There are no grey areas. The policy which we have adopted (based) on the recommendation of the Rangarajan Committee will be applicable to everyone," he told reporters on sidelines of the Global HSE Conference organised by Cairn India here.

Asked if the new price of about $8.4 per million British thermal unit will not apply to RIL's currently producing D1&D3 fields that have produced much less than target, he said, "Don't ask (me that). When I said (price will apply uniformly) did I qualify." Pressed further if the pricing of gas based on the average of rates at international hubs and actual cost of imported LNG would apply to all domestic producers uniformly, Moily said: "Yes".

He refused to be drawn into the issue of RIL being denied a higher price of gas produced from its main fields in the eastern offshore KG-D6 block till the dispute over the reasons for output not matching targets is resolved. — PTI

New Delhi, September 26
The CBI is looking into alleged irregularities at the National Spot Exchange Ltd (NSEL), Finance Minister P Chidambaram said today, indicating the agency may take appropriate action.

A complaint has been received by the CBI for violations of the Indian Penal Code and some other laws. The CBI is looking into that complaint and they will decide what further action needs to be taken on the complaint — P Chidambaram, Finance Minister

"A complaint has been received by the CBI of violations of the Indian Penal Code and some other laws. The CBI is looking into that complaint and they will decide what further action needs to be taken on the complaint," he told reporters.

Chidambaram said three authorities — the CBI, the Forward Markets Commission (FMC) and the Ministry of Corporate Affairs (MCA) — are looking into the payment crisis at the commodity exchange, as per recommendations of the high-level committee headed by Economic Affairs Secretary Arvind Mayaram.

"I cannot possibly give a timeline for when each of these authorities will take action, but from what I have gathered, each of these authorities will take action as early as possible...They have listed out the irregularities," he said.

NSEL, a part of the Jignesh Shah-led Financial Technologies (FTIL) group, is grappling with a Rs 5,600 crore payment crisis after it had to suspend trading on July 31 after a government directive. It has defaulted on six consecutive weekly payments to its investors.

NSEL was not a registered or recognised association under the FMC and got exemption even before it started its business, Chidambaram said, adding investors who put in money in the exchange knew it was an unregulated entity.

"I think there is much more to the way NSEL started business than meets the eye. People seem to have given money to NSEL promoters with open eyes that it is not a regulated entity, that is violating conditions from day one. Yet they were giving money to NSEL. Many of them made money in initial stages and some of them lost money now," he said.

Chidambaram said although there was no fear of the NSEL crisis spilling over to other markets, he has asked capital market regulator SEBI and commodity market watchdog FMC to keep a careful watch.— PTI

New Delhi, September 26
AirAsia India today announced it has received the crucial 'No Objection Certificate' from the Civil Aviation Ministry, with the Malaysian parent company's chief Tony Fernandes terming the development as "very exciting".

Though NOC was issued by the Ministry last week, this was the first formal statement by the AirAsia CEO on microblogging site Twitter.

"I am thrilled to announce that AirAsia India has received NOC from the Government of India. Very exciting and hugely profitable," Fernandes said in a tweet.

With the NOC in hand, AirAsia India would now have to apply to the Directorate-General of Civil Aviation (DGCA) for its Scheduled Operator's Permit (SOP or the flying permit), which is the final step before it can start its flight operations.

The DGCA grants the SOP after vetting the preparations of a start-up airline to launch flights by examining issues like availability of aircraft, manpower to operate flights as well as on the ground, aircraft parking space at airports and engineering facilities.

The NOC would also enable AirAsia India to import the first of the three aircraft to Chennai, which would be its headquarters. — PTI

BRIEFLY

Rupee gains 37 paise
Mumbai: The rupee gained for the second day, adding 37 paise to a one-week high of 62.07 against the dollar on Thursday as the RBI eased swap norms for banks borrowing funds overseas and exporters sold the US currency. Support for the rupee also came from capital inflows on the back of a recovery in local equities. — PTI

Twitter launches emergency alerts
San Francisco: Twitter has launched a system for emergency alerts which can help spread critical information when other lines of communication are down. The popular messaging service said on Wednesday its Twitter Alerts could be useful in natural disasters or other emergencies when traditional channels may be overloaded or unavailable. — AFP

L&T bags orders worth Rs 2,683 cr
New Delhi: Larsen & Toubro (L&T) said on Thursday it has bagged new orders worth Rs 2,683 crore in the current month across various segments both in the domestic and overseas markets. "L&T Construction has won orders worth Rs 2,683 crore during September 2013 across various business segments," the company said. — PTI

Jalandhar
Philips launches new products: Philips India has launched three new products - Cielo LED light, air fryer and mixer grinder - in Punjab. Vivek Sharma, chief marketing officer, Philips India, said the company has also installed around 5,500 LED streetlights in Bathinda. — TNS