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Added on : 2018-03-17 18:28:50

The government’s task force on shell companies has recommended that enforcement agencies and regulators identify and conduct an inquiry against Indian companies having subsidiaries in tax havens such as Delaware (US), Luxembourg, Panama, Mauritius and Ireland.The task force, set up in July 2017, has listed 14 parameters for identification of potential shell companies and suggested launching probes against them. “Primarily, Indian companies having subsidiaries in tax havens are a matter of concern,” the report seen by Business Standard stated.The task force has provided probe agencies with a list of attributes to red-flag such firms. Shell firms, according to this panel, have disproportionate investments, debt, advances or cash. Probe agencies should look into a company if its reserves and surpluses are five times or more than the turnover, or if its fixed assets are five times or more of turnover. Red flags will also be raised if any of these — cash, investments, debt, advances, or total liabilities — is more than five times the turnover.

The government’s task force on shell companies has recommended that enforcement agencies and regulators identify and conduct an inquiry against Indian companies having subsidiaries in tax havens such as Delaware (US), Luxembourg, Panama, Mauritius and Ireland.The task force, set up in July 2017, has listed 14 parameters for identification of potential shell companies and suggested launching probes against them. “Primarily, Indian companies having subsidiaries in tax havens are a matter of concern,” the report seen by Business Standard stated.The task force has provided probe agencies with a list of attributes to red-flag such firms. Shell firms, according to this panel, have disproportionate investments, debt, advances or cash. Probe agencies should look into a company if its reserves and surpluses are five times or more than the turnover, or if its fixed assets are five times or more of turnover. Red flags will also be raised if any of these — cash, investments, debt, advances, or total liabilities — is more than five times the turnover.

Editor & Publisher : Dr Dhimant Purohit

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