Update on Laws in India and China India Unveils New Direct Tax Code The Indian government released a comprehensive discussion paper and draft of the new Direct Tax Code that seeks to revamp and simplify the Direct Tax Law and its administration in the country through several radical changes. The code, which the government plans to enact and implement FY2012 onwards with suitable changes if required, envisages meaningful reduction in the tax rates while simultaneously being revenue neutral for the government. It aims to achieve this by increasing the tax base and rationalising the myriad tax incentives prevalent under the current law. Some of the major proposed changes include, reduction in effective tax rates for individuals, increase in tax deduction limit on savings from Rs. 1 Lakh at present to Rs. 3 Lakh, reduction in the Corporate Tax rate from 33% (including surcharge) to 25% and changes in MAT provisions. The code also provides for some investment-based incentives for various sectors, including Generation, transmission and distribution of Power, Specified infrastructure projects, Hospitals, - Food processing, packaging, cold storage, agricultural warehouse, Oil and Gas and SEZs.
China Drafts Regulation On Monopoly Price China's top economic planner, the National Development and Reform Commission, unveiled on 12th August 2009 a draft regulation to prevent monopoly prices and to endorse fair competition so as to safeguard the interests of consumers and the public. The regulation applies to cases of monopoly prices both inside and outside the country, when monopoly prices outside the country impact the domestic market. Other than deals reached among more
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than two parties for the purpose of monopolizing prices, power abuse of government agencies to eliminate or limit competition is also regarded as violation of the regulation. Those who violate the regulation would be punished according to stipulations in the country's anti-monopoly law, according to the commission. Individual retailers or producers may face confiscation of illegal earnings and a fine of up to 10 percent of last year's sales, while industry associations are subject to a fine of no more than 500,000 Yuan ($73,529.4) or could be dismissed as an association. Government agencies that violate the regulation would be ordered by their superiors to correct their actions, and officials held responsible would be disciplined according to relevant laws.
China Passes Draft Regulation to Enforce Environmental Evaluation On Projects China's State Council passed a draft regulation on 12th August 2009, on environmental evaluation over new projects to prevent pollution or ecological destruction from the beginning. Under the regulation, environmental evaluations are required before the planning of development projects could be approved. Such a regulation covers all development activities, from land use and the development of rivers or oceans, to development projects related to industrial, agricultural, husbandry, and forestry sectors as well as energy, water conservation, transportation, urban construction, tourism, and exploration of natural resources. The regulation would be revised and later publicized by the State Council for enforcement.
INDIA-CHINA CHRONICLE Aug - Oct '09 - www.icec-council.org