Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: form 3cd :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: VAT RATES :: list of goods taxed at 4% :: VAT Audit :: due date for vat payment :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: ACCOUNTING STANDARDS
 
 
News Headlines »
 You can make these 6 investments for tax-free income
 E-verifying your income tax return, find it here
 Filing of online return for 4th quarter of 2016-17 — extension of period thereof
 CBDT simplifies ITR filing process from FY18
 Govt extends service tax return filing date to April 30
 No move to tax farm income, clarifies Arun Jaitley
 New board for indirect taxes to become operational from June 1
  9 changes that came into effect from April 1
 First time filing income tax? Here's all you need to know about Form 16 and Form 26AS
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ

Tax-free hills become investment hotspot
October, 15th 2007
Call them covert SEZs. To an enterprising businessman these pockets resemble tax havens. Places such as Leh in J&K, Itanagar in Arunachal Pradesh, Shillong and Tura in Meghalaya, Aizwal in Mizoram and many others have become hotspots for big-ticket investments by businessmen wanting to quadruple their return on investment.

Under the Income-Tax Act, tribals in these areas need not pay income-tax at all. However, in most cases the locals lack money to invest in business. Seeing an opportunity, they tie up with outsiders in a deal based on trust to kick-start profitable businesses from hotels, bus services, petrol pumps to small grocery or vegetable shops. More and more such deals are getting legal as businessmen from the plains are now resorting to an innovative method of finalizing the deal through a power of attorney, sources familiar with the matter told SundayET.

The actual business model works like this. The investor pumps in money only after the local partner under whose name the trade license is issued, gives a power of attorney to the investor allowing him to manage the entire business.

The investor thus gets the legal backing to manage the entity, and most importantly the license to operate the bank accounts. At times, we have received disputed cases where the local partner demands more than the agreed amount which varies from 5 to 10% in case of contracts, or even up to 25% in case of business profit.

Though legal documents play a role, the understanding between the two partners is crucial to such a deal, a senior advocate from Gauhati high court said. When contacted a senior Central Board of Direct Taxes official said, This has been happening for quite sometime. But we take actions only when we have specific instances.

As the locals dont need to pay any tax, they can transfer black money from partners, and show that amount as their own capital. In fact, locals often look out for potential business partners. Showing a photo of a beautiful site in Leh, Salim Khan of Kangla hotel said, We want to build the best hotel in Leh, but we need financiers.

With frequent film shootings and massive increase in foreign traffic the tourism market is booming. Till now, there was not even a 3-star hotel here. Now look around you, everything is changing. Even the biggest hotel now being built here is being funded by a non-local. And he is going to earn big. Do you know of any financier?

In a hilly state like Himachal, where outsiders are not allowed to buy land beyond 350 sq yd, many investors bunk the rules to set up shops. In fact, some of these investors happen to be foreigners. Says a senior government official: A lot of investors are coming to state either through power of attorney or by sheer trust. But its almost impossible to catch them as they adhere to all rules and regulations.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions