Dalelorenzo's GDI Blog

CBDT issues rules for taxing partnership firms

The Central Board of Direct Taxes( CBDT) has said that capital assets, fund or stock in trade received by a partner in a partnership firm while its dissolution or reconstruction would be considered as a saw send and profits of amplifications arising from the transfer would be subject to income tax.In two separate slice inserted in the Finance Act, 2021 earlier this year, the government had brought in provisions of taxing capital increases on transmit of capital assets by development partners or member in a partnership firm, so as to prevent evasion of taxes on asset gains.In a circular issued Friday, the Board said that deemed movement of capital assets or stock in trade or both when received by the partner or member from the firm would be subject to income tax under asset additions or profits and gains of business or profession. The carnival market value of the capital asset or stock in trade or both will be deemed as the full value of consideration.The Board also said that any fund or asset asset or both received by the partner or representative from the house during dissolving or reconstruction will be chargeable under uppercase incomes. The above requirements also includes capital asset forming a part of a block of resources. It notified the new rules, specifying short term and long term capital assets which will be chargeable under uppercase gains.Capital resource which is short term capital asset at the time of taxation, wording one of the purposes of a block of resources or being self-generated asset and self-generated goodwill will be considered as short term capital asset.Capital asset which is long term capital asset at the time of taxation and does not fall under the three categories above, will be considered as long term capital asset.The Board clarified that revaluation of an asset or valuation of self-generated asset or self-generated goodwill does not entitle depreciation on the increase in value of that asset.Experts said that the new rules will provide much needed clarity for blame of income and determination of long term and short term capital gains at the entrusts of the reconstituted entity. "It’s characterization as short term or long term capital additions depends upon the period of holding of remaining capital assets to which such income is attributed. Any excess received on revaluation/ valuation of assets will be deemed as short term capital gains if it relates to self-generated goodwill or assets wording part of block of resources, ” said Sandeep Bhalla, partner at Dhruva Advisors LLP.Further no depreciation would be allowed on self-generated due to valuation or revaluation, he added.“All self-generated assets including goodwill - if revalued or quality in notebooks resulting in increase in capital base of a partner- would be regarded as short term capital asset for taxability in case of transfer to a partner pursuant to its reconstitution. This will cause real hardship to tax payers, ” Amrish Shah, partner at Deloitte India noted.The Board clarified that when transport of capital assets makes lieu both provisions will be applicable and taxation will be worked out separately. This to be applied from AY 2021 -2 2 and subsequent years. Formula for calculating such gains and amplifications has been given in a separate notification.“When such capital assets get transmitted in the future, the amount attributed to such capital assets goes reduced from the full value of the consideration and to that extent the specified entity does not pay tax again on the same amount, ” the Board said in the circular. It was also pointed out that in case the capital asset remaining with the specified entity is forming part of a block of resource, the amount attributed to such asset resource shall be reduced from the full value of the consideration received or accruing as a result of precede movement of such asset by the specified entity, and the net value of such consideration shall be considered for reduction from the written down value of such block or for calculation of capital gains.

Read more: economictimes.indiatimes.com


‘The cost of inaction is just too high’: IKEA to ramp up €4bn clean tech push

'The cost of inaction is just too high': IKEA to ramp up €4bn clean tech push

Ingka Group, which owns most IKEA supermarkets worldwide, intensifies efforts to power entire value chain with its own renewables capacity

IKEA's largest global dealership owned has announced plans to inject an additional EUR4bn into scaling up the deployment of renewable power campaigns by the end of the decade, with its focus on expanding its wind and solar power capacity into new countries in order to power its sales outlet and significance chain.

Ingka Group, which operates 389 IKEA places across 32 countries, has already invested EUR2. 5bn in onsite renewables over the past decade. It this week announced it is to ramp up its light-green investment programme, blaming an additional EUR4bn to the programme through to 2030 in a move that would edge it closer towards powering its entire value chain with 100 per cent renewable power.

In total, the company now owns almost 550 breeze turbines, 10 solar ballparks, and 935,000 solar battery, amounting to a total 1.7 GW of renewable power capacity, having earlier this month announced the acquisition of a 48 per cent stake in eight solar ballparks totalling 160 MW in Russia.

As well as wind and solar power, the added EUR4bn announced on Wednesday is to be invested in energy storage projects, energy efficiency acts, electrical vehicle billing points, and hydrogen powered delivery vans, according to Ingka Group.

The holding company's CEO Jesper Brodin said the need to tackle climate change procreated the 2020 s "the most important decade in the history of mankind", and that the "costs of inaction is just too high and raises substantial gambles to our business and humanity".

"We know that with the right activities and investments we can be part of the solution and reduce the impact on the dwelling we share - our planet - while future proofing our business, " he said. "For us, it is good business to be a good business."

The announcement forms part of IKEA's broader goal to become a 'climate positive' business by reducing more greenhouse gas radiations rather than to ejected across the furniture retail giant's entire value chain by 2030, while delivering science-based CO2 reductions and investing in natural carbon storage projects.

"Using renewable energy across our operations and value chain is a significant part of delivering on our science-based targets and commitment to the Paris Agreement, " said Pia Heidenmark Cook, Ingka Group's chief sustainability officer. "We have already come a long way, and in this critical decade we need to come together to accelerate a only transition to a society powered by renewable energy."

Meanwhile, the IKEA Foundation - which is funded by the Ingka Foundation that in turn owns the Ingka Group - has the coming week separately pledged to invest an additional EUR1bn on climate programmes over the next five years in an attempt to drive down greenhouse gas emissions.

The funding is being funnelled towards renewable energy initiatives, such as replacing polluting sources of energy with clean alternatives and providing access to energy for communities, as one of the purposes of an approaching IKEA Foundation said would open further funding to help accelerate the exertion transition.

The new commitment comes in addition to the EUR5 00 m the IKEA Foundation had already guaranteed to spend on environment mitigation and adaptation programmes over the next five years, following its EUR3 68 m funding for climate programmes between 2014 and 2020.

Per Heggenes, CEO of the IKEA Foundation, said the aim was to support programmes that could deliver decarbonisation fast and efficiently, and that he hoped the renewed commitment would "inspire others to step up their ambition to safeguard our environment, while improving supports at the same time".

"We need everyone to play their part if we are to change course towards bright futures on a liveable planet, " he added.

Read more: businessgreen.com


Unlocking manufacturing growth in India

Manufacturing in India particularly in Micro, Small and Medium Enterprises( MSMEs) is often associated with lower productivity, character, occupational state and safety and environmental performance. The window of opportunity for second best is in constant decline, particularly in current season with indeterminate and stagnating marketplaces due to COVID-1 9 pandemic and the accompanied economic downturn.As workplaces and procedures need revision to break the orders of infection transmission , now is the right time to' clean out’ plants and workplaces to free up the infinite, substances, gear and acting age that are not contributing to customer value. Swachh Udyog: to enable regenerated manufacturing emergence based on excellence and invention, that contributes to lettuce and inclusive economic recovery and self-reliance, as envisioned in Atmanirbhar Bharat.India successfully achieved the creation of a well-established and competitive manufacturing locate over the past few decades. According to UNIDO data, in areas of Manufacturing Value Added( MVA) in 2018, India ranked 6th in the world ($ 473 billion ), just behind the big-hearted five of China, USA, Japan, Germany and South Korea. India’s manufacturing is roughly equal to the compounded manufacturing of Indonesia, Thailand, Malaysia and Philippines, the principal manufacturing economies in South East Asia, and simply over five-fold the compounded manufacturing of Bangladesh and Pakistan. The technological intricacy of manufacturing in India, as measured by the share of medium and high technology manufacturing subsectors of 42.9%, is on par with the very best of Asian and world-wide middle-income countries. Chemicals and gasolines creating, nutrient and beverages and textile are the most important sectors and collectively contribute 44.5% of manufacturing value, 37.4% of manufacturing jobs and 46.3% of manufacturing export earnings.However, past success is no guarantee for future manufacturing performance in a rapidly changing world. The universally agreed 2030 Agenda for Sustained economic development, in particular its Sustained economic development Goal 9( SDG9) on manufacture, infrastructure and invention, calls for contributions of industry and business. Specifically, manufacturing needs to improve its sustainability and inclusiveness. India currently grades 77 th among the 128 graded countries globally in UNIDO’s SDG 9 manufacture index that combines data on absolute and relative immensity of the manufacturing sector and its employ, carbon footprint and technological complexity.India’s SDG 9 manufacture ranking is held back chiefly by the smaller relative contribution of manufacturing to the economy at large and the higher energy and resource intensity of manufacturing. Manufacturing share in the economy in India stood in 2019 at simply 16.9%, exclusively about half the contribution in China( 31.2%) and, likewise, significantly less than in other comparator countries like Thailand( 27.7% ), Indonesia( 21.6%) and Bangladesh( 21.1% ). In its seeing for a$ 5 trillion economy by 2023, the Government targets a manufacturing contribution of some 20%. This involves a double-dealing of the size of the manufacturing sector over the 5-year interval 2019 -2 023. This is only possible with strong domestic and international demand, and the ability of Indian firms to compete on layout, functionality, aspect, reliability and price, whilst also revealing social and environmental performance to achieve and outstrip compliance requirements.Excellence can be the only hallmark of manufacturing in the brand-new India. FICCI recently released the results of its inspection of manufacturing excellence, focusing on shopfloor procedures, human resources and digital capabilities. Fellowships that include excellence are the firstly to identify opportunities and predict change, and hence change faster in rapidly changing business and market environments. From experience, firms borrowing manufacturing excellence may expect 25 -4 0% productivity increase, 20 -3 0% improvement of equipment efficiency, 20 -3 0% reduction of material loss and 40 -6 0% reduction of customer grumbles, on a timescale of 1.5 -2 times. 62% of survey respondents claimed to have structured manufacturing greatnes programmes, yet further prompting discovered relatively higher uptake of basic approachings, like 5S( up to 90% ), and significantly lower uptake of very advanced rules, like price torrent mapping and Poka Yoka( simply 30% ). 1 in 3 respondents invested in manufacturing talents growing. Predictive maintenance is a focus for 1 in 3 respondents, more merely 1 in 5 manufactures use of relevant sensors, digital implements and Internet of Things.UNIDO approaches constructing excellence from three complementary slants, to future proof manufacturing growth by making manufacturing cells efficient and effective, with grown-up, exhibit located and adaptive management.First,( reserve) productivity, aims to create the maximum production with minimum and always declining inputs of materials, vigour, chemicals and water. This provokes a virtuous circle: formerly assets are exerted more effectively, less is still being squandered into the environment( effluents, emissions and waste) and working conditions improve, which increases productivity and improves employee retention. Industrial energy efficiency is a case in point. Working with the Bureau of Energy Efficiency, UNIDO supported energy management cadres in 12 MSME collections, dealing five sectors: dairy, ceramic, foundry, brass and paw tools. During 2017 -2 020, these once subscribed 345 components to implement 603 vitality measurements, that annually save 10,850 tonnes of oil equivalent worth 59 Crores for a cumulative asset of merely 90 Crores. In the skin browning and makes area, proven clean engineerings cater 20 -3 0% reductions in specific effluent generation and chemicals and water use.Second, manufacturing effectiveness, also known as lean manufacturing, ensures a focus on customer value and eliminating all that does not contribute thereto. It modifies the manufacturing paradigm from input-pushed to demand-driven, contributing to customer value at all the stages. This can start simple, by adopting a visual factory that has clearly differentiated workflows through neat workstations, so that every divergence immediately catches the eye. Standardizing and improving operational procedures attains every manufacturing task easier to perform and gashes defaults. In a joint strategy with Automotive Components Manufacturers Association, UNIDO corroborates tier 2 and 3 small and medium component manufacturers to adopt lean and clean rehearses, through upskilling of shopfloor workers and directors and counsellor support. Most recently, six SAME DEUTZ suppliers in Tamil Nadu ended its work programme, which collectively saved them 42 lakhs annually, increased absenteeism by 15%, machine disturbances by 30% and lead time by 18%. Through a similar programme, 5 suppliers to Tata Machine in Pantnagar, saved collectively 1.88 crores yearly, whilst also abbreviating absenteeism by average of 31% and client complaints regarding 89% on average.The third greatnes factor is maturity which relates to firm level capability to monitor and oversee manufacturing. Maturity may be interpreted as the unit’s ability to successively say, understand, prophesy and accommodate manufacturing processes for optimal business outcomes. Maturity is greatly enabled by digital technologies, including sensors, machine connectivity( including Internet of Things ), large-scale data analytics and machine learning, and surely the transition to Advanced Digital Production or Industry 4.0. Conglomerates with better creation and technological sciences capabilities welfare most from digital technologies, pointing to the need to invest in the skills of the future, which include analytical and problem-solving abilities, team working and communication, combined with ICT skills. UNIDO’s research found that India is well poised to benefit from digitalization of manufacturing. Several large-scale makes have set up world class Industry 4.0 manufacturing locates, including for example Nokia in Chennai. The challenge remains to find customized mixtures for a majority of the members of creators, through digital improvements of their existing system or deployment of extending digital technologies in innovative fabricated products. Through its Facility for Low Carbon Technology Deployment, UNIDO is supporting home grown innovations utilizing industrial IoT to significantly reduce the carbon footprint of manufacturing.The onset of COVID-1 9 pandemic has put in place the spotlight on workplaces as potential infection hot spot that require substantive change to work together productively in a safe and hygienic style. Manufacturing cells have the option to turn this essential into a brand-new opportunity for recovery, rejuvenation and increment based on the principles and traditions of manufacturing excellence, starting with cleaning out plants- Swachh Udyog .( The scribe is India Representative and Head of Regional Office of the United Commonwealth Industrial Development Organization( UNIDO) in India)

Read more: economictimes.indiatimes.com