Ministry of Finance

India and USA agree on a transitional approach on Equalisation Levy 2020

Dated: 24 NOV 2021

On October 8, 2021, India and United States joined 134 other members of the OECD/G20 Inclusive Framework (including Austria, France, Italy, Spain, and the United Kingdom) in reaching agreement on the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy.

On October 21, 2021, the United States AND Austria, France, Italy, Spain, and the United Kingdom reached an agreement on a transitional approach to existing Unilateral Measures while implementing Pillar 1. The agreement is reflected in the joint statement that was issued by those six countries on that date (“October 21 Joint Statement”).

India and United States have agreed that the same terms that apply under the October 21 Joint Statement shall apply between the United States and India with respect to India’s charge of 2% equalisation levy on e-commerce supply of services and the United States’ trade action regarding the said Equalisation Levy. However, the interim period that will be applicable will be from 1st April 2022 till implementation of Pillar One or 31st March 2024, whichever is earlier.

India and United States will remain in close contact to ensure that there is a common understanding of the respective commitments and endeavor to resolve any further differences of views on this matter through constructive dialogue.

The final terms of the Agreement shall be finalised by 1st February 2022.

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RM/KMN

(Release ID: 1774692) 

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 21st November, 2021

PRESS RELEASE

Income Tax Department conducts searches in Gujarat

The Income Tax Department has carried out a search and seizure operation on a prominent group engaged in manufacturing of chemicals and development of real estate on 18.11.2021. The search action covered more than 20 premises spread over Vapi and Sarigam in Gujarat, Silvassa and also in Mumbai.

A large number of incriminating evidences in the form of documents, diary notings and digital data showing earning of huge unaccounted income by the group and its investment in assets have been found and seized. The evidences clearly indicate evasion of taxable income by adopting various modus-operandi such as suppression of production, use of bogus purchase invoices without actual delivery of the goods to inflate purchases, availing of bogus GST credit, claim of bogus commission expenses, etc.  The assessee group has also received on-money in immovable property transactions. All these have resulted into generation of unaccounted cash. During the search proceedings, several incriminating evidences about cash transactions in investment in immovable properties and cash loans have also been seized.

The search operation has resulted in seizure of unaccounted cash of about Rs. 2.5 crore and jewellery of Rs. 1 crore. 16 bank lockers have been placed under restraint.

A preliminary analysis of the documents/evidence unearthed during the search has indicated that estimation of unaccounted income is likely to be more than Rs.100 crore.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 18th November, 2021

PRESS RELEASE

Income Tax Department conducts searches in West Bengal

The Income Tax Department carried out search and seizure operations on 16.11.2021 on a prominent Kolkata based group engaged in manufacturing of cement and real estate. The search action covered 24 premises spread over Kolkata, Delhi and places in the states of Assam and Meghalaya.

A large number of incriminating evidences in the form of documents and digital data showing evasion of huge amount of unaccounted income of the group have been found and seized. These evidences indicate evasion of taxable income adopting various malpractices such as, suppression of production, unaccounted and under-invoicing of sales, inflation of cost of purchases using bogus parties and unaccounted expenditure incurred in cash. Evidence of receipt of on-money in cash on sale of flats, by a group concern, has also been unearthed. Further analysis of seized evidences reveals that many paper companies are run by the group to provide accommodation entries to its flagship concern.

During the search proceedings, incriminating evidences containing transaction of unexplained unsecured loans, bogus commission paid, and unsubstantiated share capital and share premium received through shell companies, have also been found and seized.

Firms of the group were also found to be run in the names of persons/employees who are persons of small means. While these employees were earning meagre salaries, payments running into crores of rupees were being made to such firms.  These firms are found to be operating from the factory premise of the group. 

The search action has resulted in seizure of unaccounted cash of Rs. 1.30 crore. 6 bank lockers have been placed under restraint. The search action, so far, has led to detection of total unaccounted income around Rs. 200 crore.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 17th November, 2021

PRESS RELEASE

Income Tax Department conducts searches in Delhi and Haryana

The Income Tax Department carried out search and seizure operations on 09.11.2021 in the case of a Fintech company providing instant short term personal loan through Mobile App. The searches were conducted on the business and residential premises in Delhi and Gurugram.

During the search, it was revealed that the company has been allegedly charging very high processing fee at the time of disbursement of loans. This results into effective higher burden of compensation on the borrowers.  The said company is held by a group based in Cayman Island, ultimately controlled by an individual of a neighboring country. The company has brought in India nominal initial capital by way of Foreign Direct Investment (FDI) but took substantial working capital loans from Indian banks. The business model of the company results in high rotation of capital which is evidenced by turnover of Rs. 10,000 crore in its first year of operation.

It is seen that repatriation of about Rs. 500 crore has been made by it to its overseas group companies under the pretext of buying of services in two years. However, evidence gathered during the search has revealed that such remittances made to the group companies are either highly inflated or non-genuine. Evidences found also indicate that internal web-based application for lending business was controlled from outside India. During the search proceedings, statements of key persons including foreign nationals have been recorded. 

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 2nd November, 2021

PRESS RELEASE

Income Tax Department conducts searches in Tamil Nadu

The Income Tax Department carried out search and seizure operations in Tamil Nadu in the case of a group engaged in the manufacturing of animal feeds, poultry farming, edible oils and export of egg products. The search action in the group was initiated on 27.10.2021 covering 40 premises located in Tamil Nadu, Karnataka and Kerala.

During the course of the search operation, several incriminating documents and materials in the form of electronic data have been found and seized. These seized documents indicate that the group is involved in suppressing its income by different ways such as inflating expenses including booking bogus purchases, by under invoicing of sales and also by non-reflecting scrap/by-products sales in the regular books of accounts. The analysis of seized documents also shows that unaccounted income so generated has been invested in acquisition and construction of various immovable properties and also incurred in meeting unaccounted expenses.

The search action has resulted in seizure of unaccounted cash of Rs. 3.3 crore and detection of unaccounted income exceeding Rs. 300 crore.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT