She had 'talismans and magic veils' in her possession when the authorities caught her
- S.K. Puranik, Sharjah
A: The Securities and Exchange Board of India (Sebi) recently put in place disclosure norms for REITs. The offer document is required to contain financial information and shed light on related transactions. The trust will be required to make a statement about interest and principal payments and operating cash flow from projects. In the offer document, a statement from the investment manager regarding sufficiency of working capital will also have to be disclosed. In case sufficient working capital is not available, the offer document will have to give details of the manner in which the working capital will be provided.
The Sebi has made it mandatory for REITs to disclose earnings per unit, total debt, net worth, contingent liabilities and the debt/equity ratios before and after completion of the issue of units. If the sponsor of the REIT is a foreign entity which is not required to comply with the provisions of the Companies Act, 2013, the financial statements of such entity may be prepared in accordance with International Financial Reporting Standards.
Q: Should the implementation of the Goods and Services Tax (GST) be deferred in view of the disruption caused by demonetisation? Will GST impact small businessmen?
- D.S. Bhattacharya, Abu Dhabi
A: Demonetisation and GST are meant to check tax evasion. Demonetisation brings a larger part of the economy into banking channels and will eliminate the parallel economy prevailing in India. The GST will track all business transactions through its network. Even if the state governments have lower tax revenue during the current financial year 2016-17 as a result of a fall in collection of value added tax, they will be compensated by the central government which will pay compensation on the basis of revenue collected by states in 2015-16, and not what is collected in the current year.
Small businesses are not going to be impacted by the GST because there is a proposal to exempt small businesses up to an annual turnover of Rs2 million. Further, businessmen who earn revenue between Rs2 million and Rs5 million have been given the option to pay a composition tax at a flat rate without claiming credits and without having to maintain detailed documents. Small businesses are also given incentives for transacting business digitally.
Q: I am planning to return to Assam to set up a small scale manufacturing unit. I want to know what incentives are given by the government to promote industrialisation in the North East.
- B.R. Baruah, Dubai
A: The government of India has approved a package of incentives to promote industrialisation in the North East region. New units will be entitled to avail of the central interest subsidy scheme. The interest subsidy will be available on term loans of five to 10 years' maturity where the loan is taken to finance capital expenditure on setting up of industrial units. Capital expenditure on substantial upgradation and modernisation can also be financed by using these term loans. The interest subsidy will be limited to term loans not exceeding Rs100 million.
The interest subsidy will ensure that the cost of borrowing is restricted to a maximum of three per cent above the prime lending rate. All subsidies payable to industrial units will be disbursed through the direct benefit transfer scheme. Industrial units must register on the e-payment portal. The requisite bank mandates will have to be provided for this purpose.
The writer is a practising lawyer specialising in tax and exchange management laws of India. Views expressed are his own and do not reflect the newspaper's policy.
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