pubdate: zone: page: user: time: color: the economic times...feb 11, 2019 · talks on to include...
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Mumbai: Many well-heeled Indi-ans who own stocks and properti-es abroad or are beneficiaries ofoffshore trusts may come underthe glare of the income tax (I-T)department for failing to spell outtheir ‘indirect investments’.
Indirect investments are the next-level investments — or, holdings inother overseas companies — by theentity in which the resident Indianis a stakeholder. Consider an indivi-dual holding 15% equity interest inan unlisted offshore firm (A) in Du-bai, which in turn is a shareholderin three US companies (B, C and D).
According to the department, in-direct ownership in B, C and D hasto be disclosed in the income tax re-turn along with the investment inA. The tax office, sources said, hasasked a few “high-profile individu-als” to explain why they did not dis-
close their indirect investments be-cause under the law the Indian re-sident is the ultimate beneficialowner (UBO) of all the companies.
Non-disclosure of information co-uld attract a penalty of at least `̀10lakh; and, if the taxman is not satis-
fised with the response, it can invo-ke the new law against black money.
“To define the term ‘beneficialownership’, Section 139 of the Inco-me tax Act was amended. The newdefinition, which attempted to co-ver indirect ownership as well, ca-me into effect from April 1, 2016. Asa result, investment in a structureoutside India which in turn hasmade downstream investments inother structures world over is be-ing covered under the new clause.So long as the Indian resident hassubstantial stake or voting poweror control over board to decide thedownstream investment may becovered under the amended defini-tion. However, I feel, the definitionis being interpreted too widely.Should any investment in anystructure, in India or outside Indiawhich makes downstream invest-ments in the US, Cayman or Ire-land, be covered under the amen-ded definition? It may not be legal-ly correct,” said senior charteredaccountant Dilip Lakhani.
Cases of Downstream Investments��18
Taxman Goes After IndirectInvestments in Overseas Cos Indian residents mayface tax scrutiny fornon-disclosure of suchinfo under beneficialownership law
Today on
Going, going, gone— cheap airfares
Slack goes for an IPO, but enterprise chatremains a hard sell
How a drug-pricing regulator wasreduced to a paper tiger
FIs, banks, HNIs setto sign up; RIL willbuy back asset after20 years from InvIT
ICICI Prudential Asset Mana-gement Company and the fami-ly office of the Poonawallas ofSerum Institute are likely to jo-in the Canadian investor in In-dia Infrastructure Trust, the ve-hicle that is being created for the
acquisition totake over the1,400 km com-mon carrier pi-peline from Ka-kinada on theeast coast toBharuch in Gu-jarat, said peo-ple aware of thedevelopment.
Three or four more ultra-highnet worth individuals like UdayKotak or their family offices tooare expected to join the consor-tium, added the people mentio-ned above.
Talks on to Include Banks too��18
Mumbai: A set of marquee as-set management companies, fa-mily offices, banks and insurersare said to be interested in parti-cipating in the Brookfield-ledinfrastructure investment trust(InvIT) that is buying the loss-making East West Pipeline Ltd(EWPL), earlier known as Reli-ance Gas Transportation In-frastructure Ltd, for an enter-prise valuation of .̀ 13,000 crore($2 billion).
.̀ 13,000-CR AMBANI GAS PIPELINE DEAL
In TransitEWPL is a private co of
Mukesh Ambani & family
It has 1,386-km pipeline from Kakinada
in Andhra Pradesh to
Bharuch in Gujarat with
capacity to transport up to
85 mmscmd of natural gas
It transported around
6 billion standard cubic meters of natural gasin FY18
FY18Financials
Loss: `715 cr Revenue:`884 cr
India Infra-
structure Trust to
be InvIT vehicle
Brookfield to own
85-90% & manage
asset; co-investors
will have the rest
`6,500 cr each to be
paid in debt & equity
Brookfield also keen
on similar structure
for Jio’s optic fibre &
tower assets
Analjit Singh, founder of the $3-billion Max Group, is set beappointed as non-executive chairman of Max Life Insur-ance Company and Max India, reports Arun Kumar. ��7
Analjit to be Non-Exec ChairmanMAX LIFE INSURANCE AND MAX INDIA
Do you think the Rafale row will hit Modi’scredentials as corruption fighter?
www.economictimes.com
Is EPF or income tax data a reliable gaugeto measure job generation?
TODAY’S QUESTION
26%YES
72%NO
2%CAN’T SAY
BRANDS: CREATING DESIRE ��5
Under ScannerINDIRECT OWNERSHIP
An Indian resident buys stake in an offshore company A
Firm A buys stake in three other companies B, C and D
Indirect ownership in B, C & D has to be disclosed in I-T return along with investment in A, says tax dept
EXPERT TAKE
Definition of beneficial ownership that also
covers indirect ownership is too wide
It could lead to disputes; more clarity
needed from CBDT
%
The Central Provident Fund Commissioner (CPFC) has stepped in tohelp middle-class people whose investments in IL&FS group compa-nies via standalone trustees are at risk, reports Saikat Das. ��12
CPFC Seeks Info on IL&FS Exposure PF BODY WRITES TO EXEMPTED TRUSTS
New Delhi: The parliamentarystanding committee on informa-tion technology is exploring waysof expressing its frustration, in-cluding declaring breach of privi-lege, at being unable to get TwitterCEO Jack Dorsey or his second-in-command to attend its hearing
on Monday, said people withknowledge of the matter. Thismay include sending a “strong”recommendation to the govern-ment seeking adverse action, they
said. The commit-tee will decidewhat “action” canbe taken againstTwitter, they ad-ded.
The panel hadsummoned repre-sentatives ofTwitter and theMinistry of Elec-
tronics and Information Techno-logy to be present before it onMonday at 3 pm to examine the is-sue of “safeguarding citizens’
rights on social media/onlinenews platforms”.
Twitter said it wouldn’t be ableto get Dorsey, who was recently inIndia, to the country on time.
“Given the short notice of thehearing, we informed the com-mittee that it would not be possib-le for senior officials from Twit-ter to travel from the United Sta-tes to appear on Monday,” Twitterhad said on Saturday. “Our CEO,Jack Dorsey, and other seniorTwitter executives visited Indiain recent weeks because it is animportant market for Twitter andwe value the growing interest inTwitter in India.”
‘Shying Away from Responsibility’��18
House Panel may Troll TwitterStrong ReactionParliamentary panel exploring all options including issuing breach of privilege to passing strong recommendations against Twitter
They were calledsince Indian represen-tatives lack mandate to frame policy or enforce it
Discussion aimed at pinningrespons-ibility
Panel refusesto delay interaction with CEO Dorsey or his deputy to March-April as demanded by co
Explores tough actionagainst company fornot sending CEO toits meeting today Twitter said
it wouldn’t be
able to get
CEO Dorsey
to India on
time as per
the panel’s
summons
Gender Parity Crucial for World: Gillard
Our Bureau
Mumbai: It’s not often that you see a presentationon the challenges of mountaineering expeditionsbeing followed by a discussion on the diversity ofcorporate boards. That was the range of ideasexplored at the second edition of the ET Women’sForum in Mumbai. What’s more, the lineup ofspeakers who took the stage couldn’t have beenmore varied – entrepreneurs, bankers, socialworkers, athletes, cops and philanthropists.
Their remarkable achievements are a strongindicator of how much more women could do ifonly the playing field was levelled. As Ruth BaderGinsburg, the trailblazing US Supreme Courtjustice, said, “I ask no favour for my sex; all I ask ofour brethren is to take their feet off our necks.”
Women far outnumbered men both on stage and
ET Women’s Forum marks a key step in advancing discourse on equal world
Paytm Tops UPI Charts, JustAhead of Google Pay, PhonePe
Bengaluru: Paytm led in UnifiedPayments Interface (UPI) transac-tions in January, closely followed byGoogle Pay and PhonePe, according topeople with knowledge of the matter.As UPI gains further ground, the fieldis competitive –– Paytm clocked morethan 221 million transactions, whileGoogle Pay and PhonePe were at about220 million, said the people citedabove. PhonePe, however, told ET thatacross all payment modes, it had 225million transactions worth `30,000crore in January.
While the National Payments Corpo-ration of India (NPCI) issues overallUPI transaction numbers, ET hassourced the individual split of the topthree largest payment players frommultiple sources. Overall, UPI clockedaround 672 million transactions lastmonth, up from 620 million in Decem-
ber. Google Pay did not provide specif-ic numbers and Paytm didn’t respondto queries.
Even as the number of transactionshas jumped, peer to peer (P2P) transac-tions still dominate. “As per internalcalculations, the total number of mer-chant transactions is not more than 100to 120 million per month,” said a seniorbanker on condition of anonymity.
BHIM Losing Steam��18
UPI logged 672milliontranscations in Jan, ofwhich Paytm accountedfor over 221million
Transaction Count
Source: NPCI
Bharat Interface For Money
Month Volume (Million) Value (`)
January 672.75 1.09 lakh cr
December 620.17 1.02 lakh cr
November 524.94 82,232 cr
Month Volume (Million) Value (`)
January 13.9 6202.5 cr
December 17.06 7589.1 cr
November 17.35 7981.8 cr
Unified Payments Interface
Wipro for Data Localisation, Goesagainst Nasscom StandWipro has favoured mandatory domesticincorporation and data localisation. But itsresponse is in stark contrast to Nasscom, whichsaid local incorporation need is arbitrary.Disruption: Startups & Tech��6
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Artificial Intelligence is Like a Bookthat Writes Itself: Sebastian ThrunRecent advances in AI have given computers theability to program themselves, says SebastianThrun, CEO, Kittyhawk Corporation. AI is like abook that writes itself, says Thrun. He will be aspeaker at this year’s Global Business Summit.Companies & Economy��8
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Pilot Crunch Hits IndiGo Ops, Over50 Flights Cancelled Over 2 DaysBudget carrier IndiGo has cancelled more than50 flights from various airports across thecountry in the past two days owing to a shortageof pilots, especially captains. The airline is likelyto cancel about 30 flights on Monday.Companies & Economy��8
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Aircel Files Contempt PetitionAgainst DoT for ̀̀ 298-cr Dues Bankrupt telco Aircel has filed a contempt ofcourt petition in the SC against DoT, includingsecretary Aruna Sundararajan, for failing torefund ̀̀ 298 crore despite repeated orders.Companies: Pursuit of Profit��17
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PMO Approves Several Measuresto Meet 15% EV Target in 5 YearsThe Prime Minister’s Office (PMO) has given itsgo-ahead to at least a dozen measures proposedby a committee of secretaries to help the coun-try achieve a 15% share of electric vehicles intotal vehicle sales in the next five years.Economy: Macro, Micro & More ��19
Inside story
in the audience and the discussions ran theentire gamut of arguments to fully realisethe potential of half our population. JuliaGillard, the former PM of Australia and thefirst and only woman in that position,reminded us in her inaugural address whygender parity is crucial: “A gender-equalworld is better for both men and women.”
Over 40 speakers and 450 delegatesparticipated in the day-long forumon Friday.
‘Diverse Boards are Beneficial to Cos’��18
MORE REPORTS �� 13, 14, 15, 16
(From left) Independent director Ireena Vittal, 30% Club’s
Brenda Trenowden, ex-Axis Bank chief Shikha Sharma and
former Australian PM Julia Gillard at the forum
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ITC to Start Ecomm Opsfor Niche FMCG Products
US Shutdown Talks Stall over Immigrant Policies
New Zealand Beat Indiaby 4 Runs, Win T20 Series
MONDAY, 11 FEBRUARY 2019
Sebi nod is
expected in
the coming
weeks for the
InvIT and the
transaction is
likely to close
by month-end
5 Investors mayJoin Brookfieldfor East West Buy
BH
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