Union Finance Minister P. Chidambaram said that evasion of service tax by insurance companies has been detected and show cause notices issued to some of them. Replying to a question in the Lok Sabha, Mr. Chidambaram said, investigation in some cases is on while recovery has been made in other cases.

Net direct tax collections during April to August this year registered a positive growth of 28.15 per cent and stood at more than one lakh, twenty three thousand crore rupees as against over ninety six thousand crore rupees in the same period last fiscal. 

A Finance Ministry release said, gross direct tax collections during April to August this year were also up by 6.51 per cent at more than one lakh, sixty four thousand crore rupees as against over one lakh, fifty four thousand rupees in the same period last year. 

Gross collection of personal tax was up by 17 per cent at more than sixty seven thousand crore rupees as compared to over fifty seven thousand crore rupees in the corresponding period last year. Growth in wealth tax was 40.63 per cent at 225 crore rupees as against 160 crore rupees in the same period last year.

The Income Tax Department has formulated a Central Action Plan for the Financial Year 2012-13 to boost revenue collections. Each region has been allocated targets of tax collection. Each assessing officer has been asked to monitor the payment of taxes by top advance tax payers within his jurisdiction. Finance Minister P. Chidambaram stated this in the Lok Sabha today. In a written reply he said a strategy has been devised to focus on the quality of scrutiny of tax assessments and collection of revenue. Special attention has been given to the recovery of tax arrears. An enforcement mechanism is in place to detect tax evasion, the Minister said.

he Finance Minister, Mr. P. Chidambaram will inaugurate a conference of the Chief Commissioners and Directors General of Customs, Central Excise and Service Tax in New Delhi on Tuesday. The conference will focus mainly on ensuring clarity in indirect tax laws, a stable tax regime, a non- adversarial tax administration and a fair mechanism for dispute resolution. 

It will also cover the revenue performance including projection of revenue for the current year and reasons in shortfall if any and steps taken by the departments to promote manufacturing.

Prime Minister Dr Manmohan Singh has constituted a Committee to review taxation of development centres and IT sector. The Committee will engage in consultations with stakeholders and related government departments to finalise the Safe Harbour provisions announced in Budget 2010 sector-by-sector. It will also suggest the approach to taxation of Development Centres.

The Prime Minister had earlier set up an Expert Committee on General Anti Avoidance Rules, GAAR under the Chairmanship of Dr. Partho Shome to engage in a widespread consultation process and finalise the GAAR Guidelines. 

An official release says, while this Committee would address concerns on GAAR provisions and would reassure investors about the predictability and fairness of our tax regime, it was felt that there is still a need to address some other issues relating to the taxation of the IT Sector such as the approach to taxation of Development Centres. The newly constituted Committee will be headed by the former CBDT Chairman N. Rangachary. 

Our Correspondent reports that many Multi National Companies, MNCs carry out activities such as product development, analytical work and software development through captive entities in India. 

They exist in a wide range of fields including IT software, IT hardware , Pharmaceutical R&D and other scientific R&D which are popularly called Development Centres. 

Over 750 MNCs have such centres at over 1100 locations in India. Since it is a highly competitive field with other countries wanting to grab a share of the pie, the government wanted clarity on their taxation.

The U.S President Barack Obama yesterday called on Congress to approve a one year extension of Bush-era tax cuts for people making less than 250,000 dollars per year, a proposal that has been rejected by congressional Republicans and likely Republican Party Presidential nominee Mitt omney.Obama's challenge to Congress came as Republicans seek an extension of all cuts for middle and upper-income Americans made under Obama's predecessor George W. Bush. As Obama campaigns for re-election, he is emphasizing what he says are the benefits of his policies and fairness for the middle class - contrasting his proposals with those of former Massachusetts Governor Mitt Romney. In a compromise with congressional Republicans in 2010, Obama agreed to a two year extension of Bush-era tax cuts, but said he would not agree to another extension. If Congress does not act before the end of this year, rates for all Americans will increase. Economists warn of a potential double punch to the economy from this and automatic mandatory spending cuts beginning at the same time. Obama will visit the Midwestern state of Iowa today to deliver remarks at the home of a middle class family that would face a substantial tax increase, if Congress does not act by the end of the year.

Congress leader Mani Shankar Aiyar today said, relaxation in visa norms was essential for improving trade relations between India and Pakistan. He was speaking at a function on India-Pakistan relationship in New Delhi.

Mr.Aiyar,however,held Pakistan responsible for delay in implementation of the liberalised visa regime.Pakistan, he said, has suggested that such an agreement should be signed by ministers and not at the secretary level.

Recently, at the Home Secretary level meeting between India and Pakistan, both the sides failed to ink the pact and merely agreed to do it at an early date after Islamabad insisted on political participation.

Mr.Aiyar also said trade should be backed up with mutual investments between the countries.Pakistani industry had expressed concerns that opening of trade with India will affect small units. Mr. Aiyar said India and Pakistan should consider doing trade in rupee. He also called for opening up of consulate in Karachi and completely open trade routes between Mumbai and Karachi.He pointed out that Indian goods are reaching Pakistan via UAE.

On political issues, Aiyar blamed Pakistan for not resolving the Siachen dispute.Recently, Pakistan Foreign Minister Hina Rabbani Khar had said India should take a bold initiative to resolve the Siachen dispute that has been lingering for 23 years on the world’s highest battleground.Mr. Aiyar said that Pakistan's continuous and healthy relationship with India would help them in reducing the role of army in the neighbouring country.

The Centre has fixed a target of five lakh 70 thousand crore rupees direct tax collection this year. Inaugurating an Aaaykar Sewa Kendra in Kolkata this morning the Finance Minister Pranab Mukherjee said that besides this target government desires that the direct tax collection should reach 12 percent of the GDP. Referring to the various customer friendly steps for tax payers Mr. Mukherjee said that the aim is to promote more and more voluntary tax compliance. The Finance Minister said that two Income Tax Offices will be opened at Durgapur and Jalpaigudi of West Bengal soon.

The statement on quarterly review of the trends and receipts and expenditure in relation to the Budget at the end of third quarter of 2011-12 was tabled by Finance Minister Pranab Mukherjee in Parliament today. The statement said, uncertainties prevailing in the global economy at the time of presenting the Budget for 2011-12 turned out to be on the negative side and has impacted growth performance of the economy .

This, coupled with prevailing high international crude prices, has resulted in higher expenditure on subsidies for petroleum and fertilizer products. Also moderation in growth has impacted direct tax revenue receipts.

The volatility in capital market has resulted in recalibration of government's disinvestment strategy. The statement said, all these factors have a combined impact of deterioration in fiscal performance when compared to the Budget estimates 2011-12.

Accordingly, the fiscal deficit and revenue deficit estimates have been revised as 5.9 per cent and 4.4 per cent of Gross Domestic Products respectively in the revised estimates for 2011-12.

In Uttar Pradesh the government has fixed a target of above 73 thousand crore rupees for revenue collection from tax and non taxation departments during current financial year.

The Chief Secretary of the state Javed Usmani has directed all the concerned departments for preparing their working plan for collection of taxes as per the target.

He has said for the development and progress of the state resources are required immediately and it could not be possible without funds. 

The chief secretary has said that funds are required for development of basic infrastructure in the different sector including road, power, education, health and drinking water.

AIR Lucknow correspondent reports that the government has directed all the departments that targets for realisation of taxes must be fulfilled and any leniency would not be tolerated.

All concerned Secretaries and departmental heads have been asked for reviewing collection of revenue by their departments on monthly basis. The Chief Minister has also approved the target fixed for revenue collection.

Foreign direct investment inflows into the country increased 74 per cent, year-on-year, to 2.2 billion dollars in February. This takes the cumulative FDI inflows to 28.4 billion dollars for the April 2011 to February 2012 period of the last fiscal. The sectors which received the largest foreign FDI inflows during this 11-month period were services, with over 5 billion dollars, pharmaceuticals with 3.2 billion dollars, construction with 2.5 billion, telecom with almost 2 billion, metallurgical industries with 1.8 billion, and power with 1.6 billion. Mauritius remained the top source of inflows, with 9.4 billion, thanks to the double taxation avoidance treaty.

FDI inflows into the country totalled 19.4 billion in 2010-11, down from 25.8 billion in 2009-10.

Vodafone has issued notice to the Indian government under Bilateral Investment Protection Treaty over tax issue between India and the Netherlands. The Dutch subsidiary Vodafone International Holdings BV today served a notice of dispute on the Indian government regarding proposals in the Finance Bill 2012 which it claimed, violated the international legal protections granted to Vodafone and other international investors in India.

In the Budget, the government has announced a proposal to amend the Income Tax Act to bring overseas deals under tax net after the Supreme Court held that the UK firm was not liable to pay the 11,000 crore rupees in taxes.

Tamil Nadu Chief Minister Jayalalitha has criticised the centre for reducing Central Sales Tax compensation to states by linking it with VAT rate revision.
In a letter to the Prime Minister Dr. Manmohan Singh she said though the Centre had agreed to compensate states for the revenue loss for 2010-11 also, the eligible compensation was arbitrarily restricted.

This was done by by deducting additional revenue realised through revision of VAT rate from four to five per cent, she said.
Earlier, West Bengal Chief Minister Mamata Banerjee had also made similar objection.

The government has constituted a study team to examine the possibility of a common tax code for service tax and central excise, which could be adopted to harmonize the two legislations.