HEDGE FUNDS INVESTMENT IN STOCK MARKET
In October 2007, India's stock market regulator (SEBI) has tightened investment rules for unregistered foreigners by clamping down on issuance of indirect investment notes to stem inflows of anonymous money.
FIIs and their sub-accounts -- vehicles set up by registered FIIs to issue P-notes -- are no longer allowed to issue P-notes whose underlying asset is a derivative.
The regulator has also ordered to wind up the current derivatives-based Participatory Notes in 18 months from October 2007.
The move is aimed at alerting the overseas hedge funds that they should get themselves registered as FIIs before the sunset clause expires while continuing to invest.
ATTENTION EXPORTERS IN INDIA
India HAS broadened the list for the exemption of service tax for general insurance services, technical testing and analysis agency and inspection and certification agency services for exporters.
India also added more sectors eligible for lower bank lending rates.
INDIAN EXPORTERS GET SERVICE TAX REPRIEVE
Exporters of goods will get exemption from tax on services rendered by ports, road transport and railway. Exporters already get refund of service tax paid by them on input services used for exports. The government collects 12 per cent service tax along with 3 per cent education cess on services.
Exporters are already eligible for service tax exemption for some input services - like those of solicitors and chartered accountants - that are used for export.
INDIA MEXICO SIGN TAX TREATY
India & Mexico signed a Double Taxation Avoidance Agreement (DTAA) for the avoidance of double taxation and for the prevention of fiscal evasion with respect to Taxes on Income. The DTAA between India and Mexico will cover, in the case of India, income tax, including any surcharge thereon and in the case of Mexico, the federal income tax.
The DTAA provides for taxation of dividend, interest, royalties and fees for technical services-both in the country of residence as well as the country of source. However, the rate of tax in the country of source shall not exceed 10 per cent of the gross amount of payment in case the beneficial owner of the payments is a resident of the other contracting state. The DTAA provides that capital gains from alienation of shares of a company shall be taxable in the country where the company is a resident.
India also added more sectors eligible for lower bank lending rates.
INDIAN EXPORTERS GET SERVICE TAX REPRIEVE
Exporters of goods will get exemption from tax on services rendered by ports, road transport and railway. Exporters already get refund of service tax paid by them on input services used for exports. The government collects 12 per cent service tax along with 3 per cent education cess on services.
Exporters are already eligible for service tax exemption for some input services - like those of solicitors and chartered accountants - that are used for export.
INDIA MEXICO SIGN TAX TREATY
India & Mexico signed a Double Taxation Avoidance Agreement (DTAA) for the avoidance of double taxation and for the prevention of fiscal evasion with respect to Taxes on Income. The DTAA between India and Mexico will cover, in the case of India, income tax, including any surcharge thereon and in the case of Mexico, the federal income tax.
The DTAA provides for taxation of dividend, interest, royalties and fees for technical services-both in the country of residence as well as the country of source. However, the rate of tax in the country of source shall not exceed 10 per cent of the gross amount of payment in case the beneficial owner of the payments is a resident of the other contracting state. The DTAA provides that capital gains from alienation of shares of a company shall be taxable in the country where the company is a resident.
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