Monday 6 May 2019

TAXATION UPDATES 06.05.2019





DPIIT PROPOSES RELAXATION IN INCOME TAX LAW TO HELP START-UPS RAISE FUNDS

With a view to facilitate fundraising by start-ups the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed relaxation in the income tax laws pertaining to sale of residential properties and carrying forward of losses, sources said. As part of easing regulatory requirements for start-ups, the DPIIT has recommended amendments in Section 54GB (capital gain on transfer of residential property not to be charged in certain cases) and Section 79 (carry forward and set off of losses in case of certain companies) of the Income Tax Act. It has suggested changes in Section 54GB of Income Tax Act to exempt proceeds on sale of residential properties from capital gains tax if it is used to fund a start-up. Budding entrepreneurs often sell their residential properties to support their business activities, one of the sources said. As part of the amendment of this section, it has also proposed to reduce founders' shareholding requirements from 50 per cent to 20 per cent and mandatory holding period from 5 years to 3 years as it would enhance flexibility of founders to raise capital by selling the properties. Regarding Section 79, it suggested relaxation in shareholding requirements to carry forward the losses. Start-up promoters presently need to hold 100 per cent shares for carrying forward of losses. The requirement needs to be reduced to 26 per cent, as it will encourage new investors to invest in start-ups, they said. DPIIT, under the commerce and industry ministry, has also proposed other measures such as tax incentives to promote budding entrepreneurs as part of the vision document. The document aims at facilitating setting up of 50,000 new start-ups in the country by 2024 and creating 20 lakh direct and indirect employment opportunities. The other proposals include setting up of 500 new incubators and accelerators by 2024, 100 innovation zones in urban local bodies, deployment of entire corpus of Rs 10,000 crore Fund of Funds, and expanding CSR funding to incubators. Startup India, the flagship initiative of the government, was launched in January 2016 and intends to build a strong ecosystem for the growth of start-up businesses to drive sustainable economic growth and generate employment opportunities. The Startup India action plan provides tax and other incentives. So far, as many as 18,151 start-ups have been recognised by the department.
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INCOME TAX E-FILERS DROP BY OVER 6.6 LAKH IN FY19: OFFICIAL DATA

In a first in recent history of tax filings, income tax e-filings in FY2019 have dropped by more than 6.6 lakh a trend that analysts said was surprising as tax base was expected to increase post demonetisation. According to statistics put out on Income Tax Department's e-filing website, income tax e-filings in FY 2018-19 was 6.68 crore, down from 6.74 crore in the previous fiscal. E-filers in FY 2016-17 were 5.28 crore. Kotak Economic Research in an April 30 report said: We are surprised with the decline in income tax e-filing in FY2019. If the filings are indeed plateauing, it will be a worry for the fiscal which has seemingly shifted its focus to compensatory expenditure, it said. Tax filings have surprisingly plateaued in FY2019. This is surprising given that post demonetisation it was expected that the tax base would continue to increase. However, registered filers have been on the rise - they grew by 15 per cent to 8.45 crore as on March 31, 2019, the e-filing website showed. Registered filers were just 2.7 crore at the end of March 2013 which almost doubled to 5.2 crore in March 2016 and to 6.2 crore in March 2017. In signs of lower compliance, the ratio of actual filings to registered filers was 79 per cent in FY2018-19, down from 91.6 per cent in the previous fiscal. The compliance ratio was 85 per cent and 83 per cent in the preceding two years. It was 79.3 per cent in FY2014-15, which was a decline from 82 per cent of FY2013-14. The data showed a steady rise in filers in the Rs 5 lakh to Rs 10 lakh range with 1.05 crore filings in FY2018-19 including 1.02 crore of individual taxpayers. Kotak said the declining e-filings does beg the question whether compliance was weaker in the latter part of FY2019 given that the number of registered filers has continued to see steady growth. If compliance has been weak, the new government will aim at increasing the filings and collections in FY2020, it said. A focused utilization of the data on deposits during demonetization could yield better compliance, especially in the higher income brackets. This combined with the granular GST filing data will be essential in increasing the filings as well as revenues over the next few years, it said. The task is cut out for the next government looking at improving the tax buoyancy -- essential to fund the increasing transfers in expenditure. The government needs to look at further expanding the tax base (optimally using the data repository from demonetization and GST). Without a significant improvement in the tax base, the medium-term growth path will be at risk, Kotak said. It said that while it is hoped that the filings for the assessment year increase (around August when filings are completed), a relatively muted tax filing growth will create further headwinds in an already stressed fiscal space. With the recent inception of direct transfers in the budget, the fiscal could easily be on a slippery slope unless there is a rationalization of expenditure, it said adding around 55 per cent of central government expenditure is fixed in nature and the eventual impact could be on further lowering capex. Given the stressed fiscal space, debt markets are burdened with heavy government and PSE borrowings, which are likely to keep the yield curve steep in FY2020, it added. Kotak said while a number of activity indicators have been signalling a slowdown in parts of the economy, the tax collections corroborate it too. Aggregate indirect tax revenues' buoyancy has been weak along with targets being missed on direct taxes too. Further, persistently high borrowing cost for financial institutions and companies (given crowding out by the government sector) will weigh on the near-term aggregate demand in the economy, it said. From a medium-term perspective, if the government does not expand its capital expenditure (higher transfers and muted tax growth), the growth prospects will be under doubt given estimated fiscal multipliers, it added.
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TAX TRIBUNAL REJECTS I-T DEPARTMENT’S VALUATION TAX MATH

Can a loss making company sell its stake at a valuation higher than the fair market value? Yes, if the valuation is computed through the discounted cash flow method, or DCF, as per a tax tribunal ruling. Many companies, including startups, were questioned by the income-tax department for high valuations that were based on future projections even as they were suffering losses in the present. Under the current rules, startups who register with the department of industrial policy and promotion (DIPP) can avoid valuation-related tax problems. While the startups have got a leeway through this route, those that are ‘non-startups’ continue to get taxed on higher valuations as they could not get immunity through the DIPP route. The tax ruling may set a precedent and give some respite to these companies, say industry trackers. The fact that the company is lossmaking does not mean that shares cannot be allotted at premium. The DCF method is a recognised method though it is not an exact science and can never be done with arithmetic precision, an Income Tax Appellate Tribunal ruled last week. The decision will help the assessees other than registered startups who have scientifically obtained valuation report following DCF, being an accepted method for issue of shares to the investors. The finding that even the loss-making company can also follow DCF method to issue shares at premium will strengthen the stand of the assessees who are facing litigation at different levels, said Dilip Lakhani. Tax officials had questioned increasing valuations of startups even when their revenues are falling or remaining stagnant. The revenue department deems the capital in excess of a fair market value as ‘other income’ that is taxable at 30%. While the government in a concentrated effort had tried to address the problems of the startups, other companies slapped with tax notices for high valuations did not get a respite, say tax experts. The tax levied on startups under the Section 56 (2) (vii-b) of the Income Tax Act was referred to as angel tax. This tax deals with premiums paid by investors while they invest in startups. The solution for startups to approach DIPP may not be a permanent one as their applications may be rejected if they don’t qualify as ‘startup’ within the definition. The ITAT ruling will help to set a precedent not for companies but even for startups as DCF method cannot be rejected by tax officer routinely, said Amit Singhania. The DCF method is mainly used to value a company or shares of a company based on future expected cash flows. The current value of the shares is then estimated based on future cash flow projections. Tax officers, however, had taken objection to the way cash flow projections were determined, which led to investments at higher valuations. This was also due to the difference in time when the projections were made and when the income tax officers were scrutinising a company. In most cases, say tax experts, an income tax officer would scrutinise a company three to four years later. In many cases the cash flow projections, on the basis of which investments were made, would prove to be inaccurate. The taxman was questioning the DCF method and the valuations and wanted to slap tax on the high valuations. The ITAT ruling added that just because the taxman has a hindsight view doesn’t mean that the projections were inaccurate.
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GST ON A BETTER FOOTING, AUGURS WELL FOR DIRECT TAXES

The fact that GST collections for March 2019 touched Rs 1.14 lakh crore up 10% over that in the same month a year ago, augurs well for the future. There is little doubt, though, that there are several one-offs that have boosted the performance—the best since India first started collecting GST in July 2017. There is, for example, the quarter-end bump that is seen regularly—March 2019 collections were the highest in the previous three months, December 2018 in the three months prior to that, September 2018 in the three months prior to that, etc; this could have to do with the fact that firms try to boost sales before the quarter ends or the fact that the smaller firms have to file their GST returns every three months. There is also the year-end effect where, apart from trying to boost sales, firms work hard to ensure that all vendors upload their GST returns so that they can avail input tax credits. This time around, the impact was even higher since march 2019 was the last month to claim tax credits for 2017-18. With more firms filing GST returns—the number of filings is up from 5.9 million in July 2017 to 6 million in March 2018 to 7.2 million in March 2019. With March 2019’s collections the highest ever, this means monthly collections in FY19 were, on average, 7% more than those in FY18, and the figure is 13% higher when you compare the January to March 2019 collections with those in January to March 2018. The two main reasons for the increase in collections and compliance suggest the system is stabilising. For one, as the growth in the number of filings show, big firms are clearly ensuring their vendor base is fully GST-compliant. And though the government keeps postponing the date for implementing the invoice-matching function of GST which increases the compliance levels quite dramatically—this was supposed to kick in on April 1 this year, but will now have to await the new government—the fact that the eway bill has become compulsory for transporting goods of over a certain amount has also played a big role in raising compliance. While the monthly run-rate of GST collections in FY20 is Rs 1.14 lakh crore, a dip from March 2019 numbers in the rest of the year implies that, as in FY19, there will be a shortfall in collections in FY20 as well; in FY19, the shortfall was 1 lakh crore on account of GST alone. Greater GST compliance will also help raise both corporate as well as personal income tax collections as, once firms have no option but to declare their actual turnover to GST authorities, they will have to do so for the income tax authorities as well. Indeed, last week, the income tax and GST authorities signed an information-sharing agreement for precisely this reason of boosting income tax collections.
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MISSING TAX FILERS: REVENUE COLLECTIONS CORROBORATE SLOWDOWN IN ECONOMY

We are surprised with the decline in income tax e-filing in FY19—a first in the recent history of tax filings. If the filings are indeed plateauing, it will be a worry for the fiscal which has seemingly shifted its focus to compensatory expenditure. The Centre must look at further expanding the tax base (optimally using the data repository from demonetisation and GST). Without a significant improvement in the tax base, the medium-term growth path will be at risk. Based on the e-filing website of the income tax department, returns filed in FY2019 were at 66.8 mn against 67.5 mn in FY2018—1% lower. This is surprising given that post demonetisation it was expected that the tax base would continue to increase. It does beg the question whether compliance was weaker in the latter part of FY2019 given that the number of registered filers has continued to see steady growth. If compliance has been weak, the new government will aim at increasing the filings and collections in FY2020. One of the positives out of the filing data has been the steady increase in the share of filers in the 0.5-1 mn, away from the 0.5 mn bracket. A similar (though quantitatively lower) trend is seen in the 1-5 mn brackets too. A focused utilisation of the data on deposits during demonetisation could yield better compliance, especially in the higher income brackets. This, combined with the granular GST-filing data, will be essential in increasing the filings as well as revenues over the next few years. The task is cut out for the next government looking at improving the tax buoyancy—essential to fund the increasing transfers in expenditure. While we hope that the filings for the assessment year increase (around August when filings are completed), a relatively muted tax filing growth will create further headwinds in an already stressed fiscal space. With the recent inception of direct transfers in the budget, the fiscal could easily be on a slippery slope unless there is a rationalisation of expenditure. We note that around 55% of central government expenditure is fixed in nature and the eventual impact could be on further lowering capex. Given the stressed fiscal space, the debt markets are burdened with heavy government and PSE borrowings, which is likely to keep the yield curve steep in FY2020E. While a number of activity indicators have been signaling a slowdown in parts of the economy, the tax collections corroborate it too. Aggregate indirect tax revenues’ buoyancy has been weak along with targets being missed on direct taxes too. Further, persistently high borrowing cost for financial institutions and companies (given crowding out by the government sector) will weigh on the near-term aggregate demand in the economy. From a medium-term perspective, if the government doesn’t expand its capex (higher transfers and muted tax growth), growth prospects will be under doubt given estimated fiscal multipliers. Further, the drag from the government on the savings also needs to reduce to create space for higher investment rate without impacting macro balances. With a more moderate fiscal policy, an investment-led growth (and a lower consumption rate) will be essential to keep the savings-investment gap in check.
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REVIEW GST ON SOLAR SECTOR, HC TELLS PANEL

The Delhi High Court has directed the Goods and Services Tax Council to review the tax structure for solar power projects. The decision was in response to a writ filed by the Solar Power Development Association, which had challenged the latest tax formulation for solar power generating systems unveiled on January 1. The court has asked the GST Council to relook at the mater in consultation with the Central Board of Indirect Taxes and Customs and the ministry of new and renewable energy. It has given the government two months to revert and scheduled the next hearing in August. Between divergent AARs and an ad hoc basis of fixing a presumptive valuation between goods and service, the solar sector has had a chaotic induction into GST…(order) holds out hope of a quick and definitive solution to this long-standing problem of the solar industry, said Rohan Shah, the counsel who represented the industry. The government, following industry representations on the impact of divergence in tax practices, provided a deemed valuation provision that entailed taxing 70% of contract value as goods, taxable at 5%, and balance 30% as services, taxable at 18%. The industry was disappointed as the said ad-hoc valuation did not provide a fair estimate of the actual split of goods and services. Typically, the said ratio in the solar sector is around 90:10. The new formulation also brought with itself several implementation challenges.
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B2B INVOICES WILL HAVE TO BE GENERATED ON GOVT PORTAL BY SEPTEMBER TO CHECK GST EVASION

All invoices for business-to-business sales by entities beyond a specified turnover threshold will be generated on a centralised government portal by September, a move aimed at curbing the menace of fake invoices and evasion of GST, officials said. The revenue secretary is monitoring the progress of implementation of electronic or e-invoice project for which an officers' committee has already been set up, they added. E-invoice for B2B transactions will be rolled out in next three-four months in a phased manner. The entire invoice would have to be generated on a government portal, an official told. The move will help in curbing Goods and Services Tax (GST) evasion through issue of fake invoices. Besides, it would make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal. Once rolled out, the e-invoice project will allow businesses to simultaneously generate e-way bill, if needed, the official added. E-way bill is required for moving goods exceeding Rs 50,000. Depending on the success of the project in the B2B segment, the revenue department would be looking at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high. Businesses beyond the specified turnover threshold, to be decided later, would be provided a software which will be linked to the GST Network (GSTN) or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of invoice. The e-invoice generation method will be similar to the one being followed for e-way bill on the 'ewaybill.nic.in' portal or payment of GST on the GSTN portal.
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GUJARAT: I-T DEPT UNEARTHS UNDISCLOSED INCOME OF RS 29,764 CR

Income Tax department unearthed Rs 29,764 crore in 2018-19 from the state, said a top official. This is almost eight times of Rs 3,755 crore of undisclosed income unearthed in 2017-18. Officials claimed that intensified efforts to find tax evasion has led to this disclosure. The investigative wing of the department unearthed Rs 19,879.83 crore of undisclosed income because of search and seizure operations, while Rs 1,987.8 crore undeclared income was a result of survey operations and Rs 7,835 crore through internal intelligence. This is because of special efforts carried out during the year by the entire staff, said a top official. The amount this year is 7.92 times of Rs 3,795 crore found in the fiscal 2017-18. Ahmedabad zone dominated in finding of undisclosed income during the year. It contributed Rs 18,262.43 crore in undisclosed income that was admitted and detected, of which Rs 1,948.42 crore was admitted and assets worth Rs 59.83 crore were seized in cases of search and seizure. Similarly in case of surveys, undisclosed income admitted and seized was to the tune of Rs 1,799.51 crore. Surat was way behind with Rs 1,617.40 crore in undisclosed income that was admitted and detected, of which Rs 17.17 crore and Rs 8.24 crore worth of assets seized. This is because the post of Director Investigation was vacant for so long during the year. So the performance is for just about four or five months, said the official. The department seized Rs 11.38 crore in the run up to the Lok Sabha elections in the state. Of this Rs 8.02 crore is in cash, while Rs 3.35 crore is in form of jewellery. The move was as a part of exercise to curb the misuse of cash during elections.
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ARMY IS NOT MODI'S PERSONAL PROPERTY; NDA GOVT RELEASED AZHAR: RAHUL GANDHI

Taking the BJP's nationalism narrative in the ongoing Lok Sabha polls head-on, Congress president Rahul Gandhi on Saturday said the Indian Army is not Prime Minister Narendra Modi's personal property and it should not be politicised as he also slammed the government on tackling terror, citing JeM chief Masood Azhar's release during the NDA rule. Gandhi alleged that the BJP compromises on it, adding that the Congress will deal with it more sternly than Modi because it works with a strategy, rather than events. He also hit out at the prime minister over his remarks that the Congress conducted surgical strikes only on paper and the leaders of the opposition party thought those were akin to video games. Gandhi said Modi's comments were not an insult to the Congress, but to the Army. Asked about the prime minister invoking Masood Azhar's designation as a global terrorist by the United Nations Security Council (UNSC) at a poll rally soon after the decision was announced, the Congress president said the Jaish-e-Mohammed (JeM) chief is a terrorist and the strictest action should be taken against him. Who had sent him there? He is being designated, but who sent him there in the first place? How did he reach Pakistan? Has the Congress party sent him to Pakistan? Which government had negotiated with terrorism, bowed in front of terrorism, who sent him back?, he asked, alluding to Azhar's release in the Kandahar hijacking case during the NDA rule in 1999. The Congress did not send him (Azhar) back. The reality is that the BJP compromises (with terrorism). The Congress has never done such a thing. The Congress party has never sent a terrorist to Pakistan and will never do so, Gandhi, who was flanked by senior Congress leaders P Chidambaram, Ahmed Patel, Anand Sharma and Randeep Surjewala, said. Gandhi claimed that there were signs of panic in the BJP's poll campaign. I see a scared prime minister, unable to face the onslaught of the opposition and absolutely convinced in his mind that he is trapped. It is a panicky campaign, he said. The Congress chief once again challenged Modi to debate him on issues such as employment and corruption. I can debate him anywhere apart from Anil Ambani's home, he said to peals of laughter. Gandhi also slammed the prime minister over the Rafale agreement and said if Modi agrees to a debate, he will ask him to explain why parallel negotiations were carried out in the deal. In the Rafale deal, the 'chowkidar' (watchman) has stolen Rs 30,000 crore, he alleged.Gandhi also accused the prime minister of harming the country's economy big time by carrying out demonetisation and implementing a flawed Goods and Services Tax (GST). He demonetised the economy, we will remonetise it through (minimum income guarantee scheme) NYAY, he said. On the issue of his apology to the Supreme Court for attributing the 'chowkidar chor hai' (the watchman is a thief) slogan to it, Gandhi said he apologised as there was a process on in the court and he had commented on that. However, he added that he stands by his slogan against the BJP and the prime minister for corruption in the Rafale deal.Gandhi also alleged that the Election Commission (EC) is completely biased towards the opposition.
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EC ALLOWS RAHUL GANDHI TO RESPOND TO SHOW CAUSE BY MAY 7

The Election Commission Friday gave an extension till May 7 to Rahul Gandhi for replying to its notice, which was issued over his remark that the Narendra Modi government has enacted a new law which permitted tribals to be shot. Citing his speech made in Shahdol, Madhya Pradesh on April 23, the commission on May 1 had issued a showcause notice to Gandhi highlighting a provision of the Model Code of Conduct which bars unverified allegations against political opponents. He was given 48 hours to respond to the notice, with the deadline ending Friday evening. To this Gandhi had sought time till May 7 to reply. The commission had issued a notice to Mr Rahul Gandhi on May 1 in light of his impugned statement made while addressing election meeting on April 23 at Shahdol, MP. He was given 48 hours to reply. A request was received today seeking extension till May 7 for filing reply. Commission has accepted the same, the poll panel said.
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BJP'S KIRRON KHER GETS EC NOTICE FOR USING CHILDREN IN ELECTION CAMPAIGNS

The Election Commission has issued a notice, seeking reply of BJP's Chandigarh candidate Kirron Kher after she shared a video on twitter in which children were seen campaigning for her. The poll panel has asked the actor-turned-politician to reply within 24 hours. You have shared a video on your twitter account which shows that children are being used for election campaign in your favour through slogan 'Vote for Kirron Kher' and 'Ab Ki Baar Modi Sarkar', the notice, issued on May 3, said. In the notice, it was mentioned that the National Commission for Protection of Child Rights in January 2017 had requested the Election Commission to ensure that children are not involved in any form with election-related activities, by either elections officials or political parties. The EC had subsequently instructed that it should be ensured by all political parties and election officials that children are not involved in any election-related activity, as per the notice. Kher is seeking re-election from the Chandigarh Lok Sabha seat and is pitted against four-time MP and Congress candidate Pawan Kumar Bansal and AAP's Harmohan Dhawan.
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RAHUL GANDHI DENIES BUSINESS PARTNER GOT DEALS DURING UPA, SAYS READY FOR ANY INVESTIGATION

Rahul Gandhi Saturday refuted the report that his former business partner got defence offset contracts during UPA. Please undertake any investigation you want do any inquiry you want, I am ready as I know I have not done anything wrong, but please also investigate Rafale, the Congress Chief replied during a press conference. Gandhi's reply came after BJP President Amit Shah slammed him in a tweet. alleging his company Backops Limited associated with Gandhi's former business partner Ulrik Mcknight received offset defence contracts during the UPA regime.
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ANIL AMBANI TAKES ON RAHUL GANDHI, CALLS HIM A 'MALICIOUS LIAR'

Ambani group on Sunday took Rahul Gandhi head on by calling the latter’s allegations of crony capitalism against its chairman as calumny, disinformation, distortion, and malicious lies.
In recent election-eve media interactions and rallies, Rahul has singled out Anil Ambani several times for winning the Rafale defence contract from the Narendra Modi government, alleging favouritism and corruption. In a statement on Sunday, a Reliance Group spokesperson said it was during the 10-year Congress-led United Progressive Alliance regime between 2004 and 2014 that Anil Ambani-led Reliance Group was awarded projects of over Rs 1 trillion across diverse, key nation-building infrastructure sectors such as power, telecom, roads, Metro, by a government led by none other than Rahul’s own political party — the Congress. The Reliance group is proud to have made this contribution to our great country — India — creating the much-needed investments and jobs, a critical backbone for a vibrant, strong, and growth-oriented economy, the spokesperson said. The Reliance Group takes this opportunity to request (Rahul) Gandhi to clarify whether his government, for 10 long years, was supporting an alleged crony capitalist and dishonest businessman, to use his own words, it said. Rahul has accused Prime Minister Modi of giving Rs 30,000 crore of Rafale offset contracts to Anil Ambani at the cost of government-owned Hindustan Aeronautics. The offset contracts were given by Rafale fighter jet maker Dassault Aviation of France in lieu of India buying aircraft worth Rs 1.26 trillion. The spokesperson said Rahul, in his typical cavalier fashion, has continued his campaign and singled out Anil Ambani as allegedly a crony capitalist and dishonest businessman — all obviously patently untrue statements. As is by now, customary for all of (Rahul) Gandhi’s public statements, he has attributed no basis to these claims whatsoever, and neither has he provided any credible evidence at all to justify his derogatory and defamatory campaign, said the statement. We, at the Reliance Group, have chosen to ignore (Rahul) Gandhi’s comments with continuing patience and restraint. We likewise dismiss his latest remark as yet another one of his multiple untruthful utterances, in the heat and dust of his electoral campaign, for which he has recently been facing contempt proceedings in the highest court of the land, the Supreme Court, the statement said. The Reliance Group is a proud young Indian group, with over 100,000 employees and over 8 million strong shareholders, the largest in the world and completely dedicated to our great country, the statement said. In recent months, most of the Anil Ambani group companies are facing the heat on the stock market after two of its group companies — Reliance Communications and Reliance Naval — were referred to the National Company Law Tribunal for debt resolution. As the operating companies defaulted on debt, lenders sold shares of Reliance Group entities in the market to recover part of their debt.
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SC STAYS DISQUALIFICATION PROCEEDINGS AGAINST 2 AIADMK MLAS

The Supreme Court Monday stayed disqualification proceedings against two AIADMK MLAs, who were served notice by the Tamil Nadu Assembly Speaker for allegedly indulging in anti-party activities. The notices were served under the anti-defection law. A bench of Chief Justice Ranjan Gogoi and Justice Deepka Gupta also issued notices on the plea filed by two AIADMK MLAs V T Kalaiselvan and E Rathinasabapathy. Notice. Stay of proceedings, the bench said.
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MUZAFFARPUR SHELTER HOME: SC DIRECTS CBI TO FILE STATUS REPORT BY JUNE 3

The Supreme Court Monday asked the CBI to file by June 3 its status report on the ongoing probe into the alleged murder of 11 girls at a shelter home in Muzaffarpur in Bihar. A bench comprising Chief Justice Ranjan Gogoi and Justice Deepak Gupta said the matter would be heard by a vacation bench on June 3 keeping in view the urgency of the case. K K Venugopal, appearing for the CBI, told the court that 11 girls are alleged to have been murdered in the Muzaffarpur shelter home and in one of the matters the agency has also recovered bones from a burial ground. Venugopal, however, told the court it will not be possible for the CBI to complete the probe into the alleged murder of 11 girls by June 3. In a sensational revelation, the CBI had told the apex court on May 3 that 11 girls were allegedly murdered by key accused Brajesh Thakur and his accomplices and bundle of bones have been recovered from a burial ground. Several girls were allegedly raped and sexually abused at an NGO-run shelter home. The issue had come to light following a report by the Tata Institute of Social Sciences (TISS). The probe into the case was transferred to the CBI and the agency has charge sheeted 21 people, including Thakur.
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COUNTRY WON'T FORGIVE MODI FOR RAJIV REMARKS: RAJ THACKERAY

Maharashtra Navnirman Sena (MNS) chief Raj Thackeray has strongly condemned Prime Minister Narendra Modis utterances on late Prime Minister Rajiv Gandhi, saying the country will not forgive him for the remarks. Referring to Modi's statement that Rajiv Gandhi was called Mr. Clean by his courtiers but died as Bhrashtachari No. 1, Thackeray said on Sunday: Hatred, endless lying and absolutely no qualms in transgressing the decorum of public life are the three characteristics that mark the term of Narendra Modi. This stands intensified with his latest statements against the late Rajiv Gandhi and the nation will definitely not pardon it, said Thackeray. Thackeray joins the ranks of several prominent opposition leaders across the country who criticized Modi's statements on Rajiv Gandhi, who was assassinated by a Sri Lankan Tamil suicide bomber on May 21, 1991.
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'TIRED, NOT RETIRED': UMA BHARTI SAYS SHE WILL RETURN TO ELECTORAL POLITICS

The union minister and national vice-president of the Bharatiya Janata Party, Uma Bharti, who is not contesting the ongoing Lok Sabha polls, has made it clear that she is not planning to retire from active politics any time soon. Bharti, who is campaigning for party candidate Pragya Singh Thakur from Bhopal, said that even if the 75-year cut-off criterion for selection of ministers in the Narendra Modi cabinet is taken as given, she will be eligible to contest the Lok Sabha polls of 2024, 2029 and 2034 and that she had a good mind to do so. Tired and not retired, she reiterated.
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TARIFFS ON $200 BN OF CHINESE IMPORTS WILL RISE FROM 10% TO 25%: TRUMP

Donald Trump announced Sunday that the United States would raise tariffs on $200 billion of Chinese goods to 25 per cent this week, because trade talks are moving too slowly. Trump's action came as a major Chinese delegation is expected to arrive Wednesday in Washington for the latest round of talks to end the trade war between the world's two biggest economies -- a round billed as the last one and possibly leading to a deal to end the conflict. For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods, Trump tweeted. The 10% will go up to 25% on Friday, he said. The two sides have imposed tariffs on USD 360 billion in two-way trade since last year. But Trump and Chinese leader Xi Jinping agreed to a truce in December to refrain from further escalation. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No! Trump complained Sunday. Trump says he wants to reduce the huge US trade deficit with China, which in 2018 totalled $378.73 billion if you include trade in services.
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TRUMP'S TARIFF THREAT PROVOKES CHINA TO DELAY NEXT ROUND OF TRADE TALKS

China is considering delaying a trip by its top trade negotiators to Washington this week, according to people familiar with the matter, after US President Donald Trump threatened the country with steeper tariffs over the pace of trade talks. Trump on Sunday raised pressure on Beijing to strike a trade deal by announcing he would increase tariffs on $200 billion of Chinese imports to 25 per cent from 10 per cent on Friday. He also floated the possibility of extending a new 25 per cent duty on another $325 billion in imports that aren’t now covered. Risks of a full blown trade war are escalating, said Chua Hak Bin, a senior economist at Maybank Kim Eng Research Pte. in Singapore. Trump’s threat may backfire as China will not want to negotiate with a gun pointing at their heads. China’s yuan plunged the most in more than three years and its equity markets were roiled as markets unwound bets on a resolution to a trade war that’s weighed on global commerce and forced companies to rethink supply chains. The Aussie dollar fell while the yen climbed. The US had been targeting May 10 to announce a deal, that would be finalized and signed by Trump and Chinese President Xi Jinping later at an official summit, people familiar with the negotiations said last week. The two sides have been locked in intense negotiations since last year for an agreement to address US concerns over China’s trade surplus, alleged theft of intellectual property and forced technology transfers. Trump and Xi agreed to a tariff truce on December 1 to allow their senior negotiators time to come up with an agreement. The truce helped soothe investors concerns about a further escalation in a trade war between the world’s two largest economies, which imposed tariffs on about $360 billion of each other’s good last year. Trump’s latest tweets on the tariff increase marked an abrupt reversal in stance for the White House after both sides had been saying for weeks that negotiations were going well. That shift reflects growing U.S. frustration with China’s backpedaling on some of its earlier commitments, including on the crucial matter of technology transfer, two people familiar with the situation said. That’s emboldened trade hawks within the Trump administration to push for a harder line, including the raising of tariffs, the people said. The Wall Street Journal earlier reported that China was mulling a cancellation of the next round of talks after Trump’s tweet.
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TWO FORMER ARMY CHIEFS DEBUNK CONGRESS CLAIMS OF CARRYING OUT 'SURGICAL STRIKES'

Rahul Gandhi on Saturday launched a scathing attack on Prime Minister Narendra Modi for raising suspicion over the claims of the surgical strike during UPA regime and asserted that doing so is an insult to the Army. Gandhi said: The Army, Air Force or Navy is not personal properties of Narendra Modi ji like he thinks. When he says that surgical strikes during UPA were done in video games then he is not insulting Congress, but the Army. These air strikes were done by the Army and we do not politicize the Army. The Prime Minister should not insult the Army. On Thursday, Congress party claimed that six surgical strikes were conducted during former Prime Minister Manmohan Singh's regime from 2004 to 2014. However, two former Army Chief of Staffs (COAS) denied any knowledge of such surgical strikes under Congress. General Ved Malik, who was COAS during the Kargil War, and General VK Singh, who’s now a union minister and BJP member both denied any such incidents.
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PAKISTAN URGES FACEBOOK TO REMOVE POLIO VACCINE MISINFORMATION

Pakistan urged Facebook to remove harmful polio-related content from the social networking site on Friday, saying it was jeopardising eradication initiatives and putting the lives of vaccinators at risk. Polio vaccination campaigns have faced stubborn resistance for years in Pakistan. In recent months Pakistani social media has been inundated with fake news reports and videos -- garnering thousands of views and shares in the last week alone -- claiming numerous children have been killed by the polio vaccine. Thousands of parents have refused to allow their children to be inoculated. The parental refusals due to propaganda on Facebook regarding the vaccine is emerging as the major obstacle in achieving complete eradication of the virus, Babar Atta, who is helping oversee the country's vaccination drive, said in a statement. Atta has requested Facebook's management to block and/or manage the dissemination of such anti vaccination propaganda from their platforms operating from within Pakistan. At least three people were killed in the last country-wide anti-polio campaign in April. Last week, around 10,000 vaccination refusals were reported per day in Islamabad, compared to 200 to 300 during the previous campaign, according to figures from the country's anti-polio programme.
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PAKISTAN BACKS ANTI-INDIA TERROR GROUPS: US THINK-TANK

Pakistan continues to sponsor terror outfits that launched deadly attacks in India because Islamabad has paid no price for its perfidy, a prominent think-tank expert has told American lawmakers. Pakistan continues to sponsor terrorist groups that launched deadly attacks in India. It has paid no price for its perfidy, Bill Roggio, a senior fellow at the Foundation for Defense of Democracies told. We must continue to combat state sponsors of terror and make hard decisions about countries such as Pakistan, he added. Referring to Pakistan's unwavering support to Taliban, much to the detriment of the US in Afghanistan, Roggio also disapproved the US move to withdraw troops from there. Its support for the Taliban has been unwavering and is leading us to defeat in Afghanistan. I would argue that we have already lost Afghanistan. We are merely attempting to negotiate the terms of our exit, he told the members of the House Foreign Affairs Subcommittee on Middle East, North Africa and International Terrorism. The United States disengaging itself from the battle fronts would lead to an easy victory of its enemies, he cautioned. As our enemies have expanded their base of operations and remain committed to the fight, our will has faltered, he said. This is a long war and commitment is key. If we hope to end this threat, we must renew our commitment and to present a united front, he asserted. In his deposition to the panel, Roggio called for hard decisions by the US. We must rethink our goals and strategy and recognise our enemies' goals and strategy. We have to figure out a way to effectively fight our enemies both in the military sphere and the sphere of ideas, he said. We must continue to combat state sponsors of terror and make hard decisions about countries such as Pakistan, he added. Roggio also accused Iran of trying to establish an Islamic state. Iran, which alongside Pakistan, is amongst the biggest state sponsors of terrorism, also seeks to establish an Islamic state, he said. It backs loyal militias in Iraq, Syria, Lebanon and Yemen. These militias are organised and trained along the same lines as has been law. The long-term impact of these militias is still not fully understood, said the anti-terror strategy and security expert. While Iran primarily backs Shia groups, it has openly battled the Islamic State in Iraq and Syria and is not opposed to forming alliances with Sunni jihadists, said Roggio.




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CS Meetesh Shiroya 

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