Daily : May 18, 2017

Cabinet approved signing of the Multilateral Convention to curb Base Erosion and Profit Shifting

Cabinet approved signing of the Multilateral Convention to curb Base Erosion and Profit Shifting

Question: BEPS-Base Erosion and Profit Shifting is related to …
(a) Tax avoidance
(b) Conservation of Earth
(c) Downfall in profit due to restriction on export to foreign countries
(d) None of the above.
Ans: (a)
Related Fact :

  • On May 17, 2017, the Union Cabinet chaired by Prime Minister Narendra Modi gave its approval for the multilateral convention to implement tax treaty related measures to prevent Base Erosion and Profit Shifting (BEPS).
  • The convention is an outcome of the OECD / G20 BEPS Project to tackle base erosion and profit shifting through tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid.
  • The Cabinet nod on Wednesday marks the formal go-ahead for India to sign the multilateral instrument in Paris on June 7.
  • The Final BEPS Project identified 15 actions to address BEPS in a comprehensive manner. Implementation of the Final BEPS Package requires changes to more than 3000 bilateral tax treaties which will be burdensome and time consuming.
  • The convention would swiftly modify all covered bilateral tax treaties (Covered Tax Agreements / CTA) to implement BEPS measures.
  • For this purpose, formation of an Ad-hoc Group for the development of such multilateral instrument was endorsed by the G20 Finance Ministers and Central Bank Governors in February 2015.
  • It is notable that Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.

Reference:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=161885
http://www.thehindubusinessline.com/news/cabinet-nod-for-signing-of-convention-on-beps/article9704770.ece

Cabinet approves construction of 10 units of atomic reactors

Cabinet approves construction of 10 units of atomic reactors

Question: What is India’s current installed nuclear power capacity?
(a) 5000 MW
(b) 5500 MW
(c) 6000 MW
(d) 6780 MW
Ans: (d)
Related Fact :

  • On May 17, 2017, the Union Cabinet chaired by Prime Minister Narendra Modi gave its approval for construction of 10 units of India’s indigenous Pressurized Heavy Water Reactors (PHWR).
  • The ten reactors will be part of India’s latest design of 700 MW PHWR fleet with state-of-art technology meeting the highest standards of safety.
  • The total installed capacity of the Plants will be 7000 MW. India has current installed nuclear power capacity of 6780 MW from 22 operational plants. Another 6700 MWs of nuclear power is expected to come on stream by 2021-22 through projects presently under construction.
    Benefits:
  • The 10 PHWR project will result in a significant augmentation of nuclear power generation capacity.
  • With likely manufacturing orders of close to 70,000 crores to the domestic industry, the project will help transform Indian nuclear industry by linking our goal of a strong nuclear power sector with our indigenous industrial capacities in high-end technologies.
  • It is expected to generate more than 33,400 jobs in direct and indirect employment.
  • It will help in meeting India’s commitment to sustainable development, energy self-sufficiency and bolsters global efforts to combat climate change.
    Significance:
  • The approval underscores strong belief in the capability of India’s scientific community to build our technological capacities. The design and development of this project is a testament to the rapid advances achieved by India’s nuclear scientific community and industry.
  • It will showcase the mastery our nuclear scientists have attained over all aspects of indigenous PHWR technology.
  • India’s record of building and operating PHWR reactors over the last forty years is globally acclaimed.

Reference:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=161865
http://www.thehindu.com/news/national/cabinet-clears-proposal-to-build-10-atomic-reactors/article18473481.ece

India, Chile trade agreement took effect on May 16, 2017

India, Chile trade agreement took effect on May 16, 2017

Question: Custom duty is a tax levied on …
(a) Export/ Import
(b) Export Only
(c) Import Only
(d) None of the above.
Ans: (a)
Related Fact :

  • The preferential trade agreement between India and the South American nation Chile came into force on May 16, 2017.
  • Under the Preferential Trade Agreement (PTA), both the countries have agreed to lower or eliminate duties on a number of items listed for mutual trade.
  • Chile has offered duty concessions on as many as 1,798 goods such as agricultural items, chemicals, pharmaceuticals, plastics, textiles, apparel, iron and steel items, copper machinery, to Indian exporters as compared to 178 items earlier.
  • India, on the other hand, offered concessions to Chile on 1,031 products including meat items, fish, vegetable oil, processed food, pharma, plastic and pearls as against 296 earlier.
  • More than 96 per cent of the total trade between India and Chile is now covered by this agreement.
  • Chile is the fourth largest trading partner of India in Latin American region after Brazil, Venezuela and Argentina.
  • It is notable that customer duty is a tax levied on imports (and, sometimes, on exports) by the customs authorities of a country to raise state revenue or to protect domestic industries from more efficient competitors from abroad.

Reference:
http://www.ptinews.com/news/8703000_India–Chile-trade-agreement-to-come-into-force-from-May-16
http://indiatoday.intoday.in/story/india-chile-trade-agreement-to-come-into-force-from-may-16/1/953501.html

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