Understanding “Compensatory Tariff”..

Honourable Supreme Court's decision last week disallowing "Compensatory Tariff" to Tata Power and Adani Power brings back this power sector invention into limelight. The compensation had earlier been awarded to these companies by the Appellate Tribunal for Electricity (Aptel) to compensate for unforeseen increase in the cost of generation.

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Understanding Shell Companies…

The recent decision of the government, with the direct involvement of the Prime Minister's Office (PMO), to crack down on shell companies brings focus on the operation of these companies. Shell companies have been in focus and subject of intense debate not just in India but globally also, especially after the leaked Panama Papers. A look at the shell companies and how they operate..

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Resolving NPAs – Understanding Asset Rehabilitation Agency..

NPAs of the banking sector, especially the public sector continue to remain high, estimated at about 12% for PSBs. While various measures have been taken to resolve the issue, none seems to have worked so far. This has led to the proposal of creating a public sector asset rehabilitation agency (PARA) by the Economic Survey, also supported by RBI. How would PARA operate and can it solve the problem. A look..

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Vodafone-Idea Merger Proposal – The Rationale..

The confirmation by Vodafone Plc recently that it is in talks with Idea Cellular for potential merger of Vodafone India is another big churn in the Indian Telecom sector. While R-Jio's entry was expected to disrupt the market, that the second largest player would call it quits is unanticipated and quite shocking. A look at the rationale for the deal..

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Understanding GAAR (General Anti-Avoidance Rules)..

Consider a situation where a foreign entity provides loan to an Indian company and receives interest which is not fixed but linked to profits. Or consider a treaty between India and country X whereby sale of shares in an Indian company held by an investor from country X shall be taxed only if the shares sold are more than 10%. The investor floats two subsidiaries and sells 9.9% shares through each of them. Are these tax mitigation, tax evasion or tax avoidance..??

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