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Mazars - Indian budget 2014 - presentation 17 july 2014 - Nicolas Ribollet

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INDIAN Budget 2014-15 : 10 key points of the budget for French companies

1. FOREIGN DIRECT INVESTMENT
2. HARMONISATION OF INDIRECT TAX : GST
3. RETROSPECTIVE TAXATION
4. TRANSFER PRICING
5. ADVANCE PRICING AGREEMENT (APA) SCHEME
6. INFRASTRUCTURE / PPP / REAL ESTATE
7. MANUFACTURING
8. POWER SECTOR
9. IFRS CONVERGENCE (accounting standards)
10. E-BIZ

Contact:
Mr Nicolas Ribollet
Partner & National Leader, French Desk

For a more complete presentation of the content of the Indian Budget 2014-15, you can also refer to the Mazars publication : "India Union Budget 2014-15"

Disclaimer : All information provided in this Mazars India presentation has been prepared for general information and illustration purposes and does not establish, in any form, a business or professional services relationship with the author, Mazars itself, or any related Mazars entities. Although we have taken due care in the preparation of all information contained in this presentation, any reliance on the information is solely at the user’s risk. You should always take professional advice in relation to your circumstances. Mazars accepts no responsibility for any loss (whether personal or business) resulting from reliance on any information contained in this presentation.

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Mazars - Indian budget 2014 - presentation 17 july 2014 - Nicolas Ribollet

  1. 1. INDIAN BUDGET 2014-15 10 KEY POINTS OF THE BUDGET FOR FRENCH COMPANIES New Delhi, Ambassade de France, 17th July 2014 - presented by Nicolas Ribollet 1 Seminar organised under the patronage of the French Embassy in India and IFCCI
  2. 2. 1. FOREIGN DIRECT INVESTMENT Insurance & Defence Prior Cap 26% New Cap 49% Jul-142 • FDI limits in defence manufacturing and insurance were moved up to 49% from the 26% cap. • The manufacturing units to be allowed to sell its products through retail including E-commerce platforms.
  3. 3. 2. HARMONISATION OF INDIRECT TAX : GST GST • The finance minister has formally committed the NDA government to the Goods and Services Tax (GST). • Date of implementation of Goods and Services Tax (“GST”) still to be confirmed. Jul-143
  4. 4. 3. RETROSPECTIVE TAXATION Retrospective Taxation • “Sovereign right of the Government to undertake retrospective legislation to be exercised with extreme caution and judiciousness keeping in mind the impact of each such measure on the economy and the overall investment climate.” • “A stable and predictable taxation regime which will be investor friendly and spur growth.” Jul-144
  5. 5. 4. TRANSFER PRICING Aligning Indian regulations with global best practices around benchmarking and comparables • Introduction of the “range concept” (universal standard of interquartile range) for the determination of arm’s length price (vs. arithmetic mean currently prescribed in India) • Allowing the use of multiple year data for comparable analysis (vs. only one- year data currently allowed with some exception) Jul-145
  6. 6. 5. ADVANCE PRICING AGREEMENT (APA) SCHEME “Roll back” provision in the scheme introduced so that an APA entered into for future transactions may also be applied to international transactions undertaken in the previous 4 years. Jul-146
  7. 7. 6. INFRASTRUCTURE / PPP / REAL ESTATE Significant new urban development objectives and thousands of new kilometres of highways and gas pipelines were included in the budget Direct infrastructure investments Long-term funds for infrastructure lending with minimum regulatory requirements. Loans to the infrastructure sector Real estate investment trusts (REITs) PPP Jul-147
  8. 8. 7. MANUFACTURING Investment allowance at the rate of 15 percent to a manufacturing company that invests more than `25 crore in any year in new plant and machinery. The benefit to be available for three years i.e. for investments upto 31.03.2017 Jul-148
  9. 9. 8. POWER SECTOR Tax holiday for power sector • The sunset clause for tax holiday, has been extended till FY 2016-17. • The Budget has proposed to extend the 10-year tax holiday to undertakings that begin generation, distribution and transmission of power by end of March 2017. Jul-149
  10. 10. 9. IFRS CONVERGENCE (ACCOUNTING STANDARDS) Indian companies will have to adopt the new Indian Accounting Standards (Ind AS) voluntarily from fiscal year 2015-16 and on a mandatory basis from 2016-17. Regulators will separately notify date of implementation of Ind AS for the banks and insurance companies. Jul-1410 New Ind- AS Standards Voluntary 2015-16 Mandatory 2016-17
  11. 11. 10. E-BIZ E-Biz • Single window IT platform (called “eBiz”) • Central Government Departments and Ministries to integrate their services with the e-Biz -a single window IT platform- for services on priority by 31 December 2014 Jul-1411
  12. 12. Contacts Mr Nicolas Ribollet Partner & National Leader, French Desk Email: nicolas.ribollet@mazars.co.in Mr Dharnendra Rana Head of Indirect Taxes department Email: dharnendra.rana@mazars.co.in Mr Pankaj Gupta Head of Direct Taxes department Email: pankaj.gupta@mazars.co.in Disclaimer : All information provided in this Mazars India presentation has been prepared for general information and illustration purposes and does not establish, in any form, a business or professional services relationship with the author, Mazars itself, or any related Mazars entities. Although we have taken due care in the preparation of all information contained in this presentation, any reliance on the information is solely at the user’s risk. You should always take professional advice in relation to your circumstances. Mazars accepts no responsibility for any loss (whether personal or business) resulting from reliance on any information contained in this presentation.

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