GST: Centre hopeful of consensus on assessee scrutiny

The Centre is hopeful of a consensus around ‘vertical division’ of assessees, one without a turnover threshold, to resolve the issue of dual administrative control under the proposed goods and services tax (GST) regime.

While most states are in agreement over the principle of division in a pre-decided ratio between the two authorities, Kerala, West Bengal and Tamil Nadu have pressed for exclusive state control over those with annual turnover up to Rs 1.5 crore and dual control for beyond that.

Also termed ‘horizontal division’, this threshold formula would ensure states get control over most assessees. By government data, 88% of assessees are below the Rs 1.5 crore threshold.

“A consensus appears to be evolving around the ‘vertical division’ of assessees for scrutiny and audit. Negotiations will centre around the ratio of division. We are willing to do less assessment than states,” said a central official. The ratio could be 1:2 or 1:3 in favour of states.

Resolution of the issue is needed to prevent harassment of taxpayers. “We can’t have two competing authorities for the same assessees,” said the official.

Assam’s finance minister, Himanta Biswa Sarma, India Economy News told a television channel after the Council meeting on Friday: “When the meeting started, the Council was leaning towards a Rs 1.5 crore threshold but now many states feel that it should be vertical division. We expect the dual control issue to be resolved soon.”

Jammu & Kashmir’s Haseeb Drabu said the state would back a vertical split of administrative powers. While the states had earlier agreed to exclusive assessment of manufacturing units with turnover of up to Rs 1.5 crore, they went back on it as the Centre retained administrative control over all 2.6 million service tax assessees.

Finance Minister Arun Jaitley said after the meeting, “We don’t want to take a decision in a hurry because, administratively, any mistake on this front could be chaotic.”

The finance ministers will have an informal meeting on November 20 to discuss it. “Sometimes ministers in the Council meeting discuss a politically correct stand in the presence of everyone. Informally, they might have a different view,” said an official.

Pratik Jain, partner at consultancy PwC, said: “With services also getting split between Centre and States, it is unlikely the Centre would agree on horizontal division. A vertical division on an agreed ratio seems more viable.”

GST: Centre hopeful of consensus on assessee scrutiny

Mistry camp banks on Indian Hotels redux

Bolstered by the unanimous support from independent directors of Indian Hotels Company (IHCL), the Cyrus Mistry camp is banking on the independent directors of other listed Tata companies to follow suit, based on Mistry’s performance as chairman at the operating companies in his four-year term, say sources close to the Shapoorji Pallonji Group.

Besides IHCL, Mistry is the chairman of six major Tata Group firms, including Tata Consultancy Services (TCS), Tata Motors and Tata Steel. Tata Chemicals and Tata Steel will have their board meetings to consider second-quarter (Q2) results on November 10 and November 11, respectively, while Tata Motors will hold its meeting next Monday.

In the IHCL board meeting held on Friday, all the six senior independent directors, including industry doyens Deepak Parekh, Keki Dadiseth and Nadir Godrej, praised Mistry for his leadership in turning around the hotel company, at a time when 75% of its net worth was wiped out due to bad acquisitions of the past. The merger of an off-balance sheet property of SeaRock in Mumbai with IHCL had also impacted its financials negatively but was necessary to give the correct picture to the shareholders, said a director.

IHCL’s independent directors met separately before the board meeting and issued a statement that it was imperative for them to state their views to investors and public at large, who trade in securities of the company, to make an informed decision.

An independent director said the boards of other Tata Group companies are also likely to make their statements known to the public when they meet for board meetings of their respective companies.

There are four independent directors on the Tata Chemicals board: Nasser Munjee, Nusli Wadia, Y S P Thorat and Vibha Paul Rishi. Vibha Paul Rishi has already backed Mistry in the IHCL board meeting and is likely to follow suit in Tata Chemicals. Both senior directors Wadia and Munjee are likely to support Mistry, sources said. Tata Chemicals had announced the sale of its urea business in August to unlock value as part of its strategic plans.

At the Tata Steel board, Cyrus Mistry Wadia Group Chairman Nusli Wadia and former State Bank of India chairman O P Bhatt are likely to discuss the concerns raised by Mistry in his letter to the Tata Sons board of potential write-downs worth $10 billion in Tata Steel.

“As Mistry had taken all the steps in Tata Steel keeping the entire Tata Steel board into confidence, it would be difficult for the independent directors to vote against him,” said a source close to the development. Besides, with the Kalinganagar steel plant coming on stream, the project is set to start contributing to Tata Steel’s coffers and help restore financial stability, the source added.

The Tata Steel board has six independent directors. Of this, Mallika Srinivasan is the chairman and chief executive officer (CEO) of Tractors and Farm Equipment (TAFE) and is the wife of TVS Group chairman Venu Srinivasan. Venu, as an independent director on the Tata Sons board, had voted to remove Mistry as chairman of Tata Sons. Two other independent directors Andrew Robb and J Schraven are ex-Corus and joined the board after the acquisition. Former Eicher Group chairman Subodh Bhargava is another independent director.

According to a Tata Sons insider, if the boards back Mistry, then it would send notices to call an extraordinary general meeting (EGM) of shareholders to oust Mistry from the boards of the listed companies. But, as Tata Sons stake is low in the listed companies, it would be not be easy for the Tatas to remove Mistry. Tata Sons holds stake in the 30-36% range in six of the seven companies and the outcome on Mistry’s removal will depend on how institutional and public shareholders will vote. TCS, the seventh company, has Tata Sons holding a 73.3% stake and it would be the only company where Tata Sons could remove Mistry in an EGM, said a lawyer. Also, TCS announced its Q2 results before Mistry’s ouster.

The Tata Motors board has six independent directors, with senior directors Wadia and Munjee expected to support Mistry. In his letter to Tata Sons directors, Mistry had raised concerns over the Nano car project, which saw an annual loss of over Rs 1,000 crore at its peak. A director on Tata Motors board said the project has lost over Rs 6,000 crore and it’s time to shut down the project. A director of Tata Motors said the morale of Tata Motors is low and it took two years to find a new CEO, with many selected by Mistry not approved by Tata. The other members of Tata Motors boards are Falguni Nayar, R A Mashelkar, Subodh Bhargava and Vinesh Jairath. The Tata Motors board is meeting on November 14.

The boards of Tata Power and Tata Global have eight and five independent directors, respectively, and will play an important role in deciding the fate of Mistry. Apart from Analjit Singh of Max Group, Tata Global board has Darius Pandole, Ireena Vittal, Mallika Srinivasan and former bankers V Leeladhar and Ranjana Kumar.

The Tata Power board, which cleared the Welspun Renewables power deal this year, includes former HDFC Standard Life Managing Director Deepak Satwalekar, A K Basu, H S Vachha, N H Mirza and P G Mankad, all senior corporate leaders or bureaucrats. Less than two weeks before Cyrus was removed from Tata Sons, Tata Power had inducted three new independent directors: Anjali Bansal, Sanjay Bhandarkar and Vibha Padalkar.

Mistry camp banks on Indian Hotels redux

Images of supposed new Rs 2,000 notes emerge on Twitter

Pictures of your supposed Urs Only two,500 denomination bank notes happen to be circulating on Twitting. The images stick to several media studies which such a currency exchange be aware may quickly be presented.

Business Regular can’t separately verify if the images going around around the micro-blogging site had been authentic,

About March 21, India Business News acquired noted that will paperwork from the denomination would be throughout blood flow quickly. Your statement acquired added the Arrange Financial institution asia (RBI) had until that will date nearly accomplished all the necessary preparations for launching the newest forex note.

Your paperwork, the statement explained, experienced recently been produced were dispatched through the forex stamping click inside Mysuru.

Even so, the actual economic everyday acquired included that there ended up zero recognized expression coming from sometimes the RBI or the government on the introduction with the brand new denomination take note.

Images of supposed new Rs 2,000 notes emerge on Twitter