Advance Pricing Agreements (APAs)
News: The Central Board of Direct Taxes (CBDT) has entered into a record 125 Advance Pricing Agreements (APAs) with Indian taxpayers in 2023-24.
Advance Pricing Agreements (APAs): Advance Pricing Agreements (APAs) serve as contractual arrangements between corporations and one or more tax authorities, primarily focusing on regulating international transactions among affiliated entities.
Objective of APAs:
- The primary aim of APAs is to ensure that such intercompany transactions are executed at “arm’s length” prices, reflecting rates comparable to those prevailing in transactions between unrelated entities.
- This practice aims to mitigate potential disputes with tax authorities regarding artificially low pricing, which could result in reduced taxable profits.
Advantages of APAs:
- Clarity and Risk Reduction: Corporations gain clarity regarding the taxation of their international transactions, thereby reducing the likelihood of future audits and subsequent adjustments by tax authorities.
- Cost and Time Efficiency: By setting up pricing agreements in advance, APAs help companies avoid long and costly battles over taxes later on.
- Prevention of Double Taxation: APAs contribute to preventing scenarios where corporations face taxation on the same income in multiple jurisdictions.
Legal Framework and Voluntary Nature:
- APAs are governed under the Income-tax Act, 1961 and are entered into voluntarily by corporations.
Duration of APAs: APAs typically have a maximum duration of five years, with the possibility of extension for up to four additional years.
Types of APAs: There are three primary types of APAs:
- Unilateral APAs: Involving only the taxpayer and the tax authority of the country where the taxpayer is headquartered.
- Bilateral APAs: Involving the taxpayer, the tax administration of the host country, and the tax authority of the foreign jurisdiction where the affiliated entity is located.
- Multilateral APAs: Engaging the taxpayer, the tax administration of the host country, and multiple foreign tax administrations.
Central Board of Direct Taxes:
- It is a statutory authority functioning under the Central Board of Revenue Act, 1963.
- The CBDT is a part of the Department of Revenue in the Ministry of Finance.
Functions:
- Formulation of policies, dealing with matters relating to levy and collection of direct taxes, and supervision of the functioning of the entire Income Tax Department.
- Proposing legislative changes in direct tax enactments and changes in rates and structure of taxation in tune with the policies of the Government.
Composition:
- The CBDT is headed by Chairman and also comprises of six members, all of whom are ex-officio Special Secretary to the Government of India.
- Member (Income Tax)
- Member (Legislation and Computerization)
- Member (Revenue)
- Member (Personnel & Vigilance)
- Member (Investigation)
- Member (Audit & Judicial)
- The Chairman and Members of CBDT are selected from Indian Revenue Service.
GPS Spoofing
News: Israel has used GPS spoofing against Iran.
Global Positioning System (GPS): Owned by the USA, it is a network of satellites and receiving devices used to determine the location of something on Earth.
GPS Spoofing:
- GPS spoofing (GPS simulation) refers to the practice of manipulating or tricking a GPS receiver by broadcasting false GPS signals.
- Essentially, it misleads the GPS receiver into believing it is located somewhere it is not, resulting in the device providing inaccurate location data.
- This form of cyberattack undermines the reliability of GPS data, which is vital for a variety of applications, from navigation to time synchronization and more.
Working:
- GPS spoofing exploits weaknesses in the GPS infrastructure.
- Weak signal strength of GPS satellites is a key vulnerability.
- GPS works by transmitting signals from satellites to receivers on Earth.
- Receivers calculate their position based on signal arrival times.
- Weak signals can be overwhelmed by fake signals.
- This interference leads to inaccurate location data on receiving devices.
Impact:
- GPS spoofing has the potential to affect various industries extensively, including logistics and supply chain, telecommunications, energy, and defense.
Special Rupee Vostro Account (SRVA)
News: India has streamlined the payment process for traders importing pulses from Myanmar by enabling them to utilize the Rupee/Kyat direct payment system via the Special Rupee Vostro Account (SRVA).
Vostro Account:
- A Vostro account is an account that a domestic bank holds for a foreign bank in the domestic bank’s currency. For example, in the case of India it is the rupee.
- Domestic banks use it to provide international banking services to their clients who have global banking needs.
- It’s like a partnership between banks where one helps the other with wire transfers, business deals, deposits, and paperwork without being physically present in another country.
- This arrangement allows domestic banks to reach global financial markets and serve international customers more easily.
Leaf Litter Frog
News: Recent scientific research has revealed that the Leaf Litter Frog emits ultrasonic sounds, imperceptible to the human ear, as a defense mechanism against predators.
Leaf Litter Frog:
- The Leaf Litter Frog is identified as the most prevalent frog species within forest communities, typically measuring up to 64 millimeters (2.5 inches) in length.
- This frog species is exclusively endemic to the Brazilian Atlantic rainforest, indicating its restricted geographical distribution.
- The Leaf Litter Frog employs its high-frequency screams as a vital component of its survival strategy, effectively deterring potential predators.
Habitat Preferences:
- The Leaf Litter Frog thrives in habitats such as primary and secondary forests, as well as forest edges.
- It predominantly occupies spaces within the leaf-litter on the forest floor or perches on leaves within low-lying vegetation within the forest environment.
Conservation Status:
- IUCN: Least concern