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5,000 companies face queries on GST transition credit  Tax officials have asked about 5,000 companies, including some big manufacturers that figure in the BSE 500 list, to provide explanation on transition credit they claimed in July under goods and services tax (GST), two people familiar with the development said. The move is part of an investigation the indirect tax department has launched after the Central Board of Excise and Customs (CBEC) in a letter dated September 11 asked chief indirect tax commissioners to verify all transitional credit claims beyond Rs 1crore.  Thousands of companies across the country received calls from indirect tax officials last week, the sources told ET. “Tax officers want chief finance officer (CFO) or some senior finance department executive to come to the department and explain how we arrived at the input tax credit we claimed,” said a senior executive at a Haryana-based manufacturer of automobile components. The executive said the official also warned…

Sebi diktat may change essence of balanced funds The Securities and Exchange Board of India’s (Sebi’s) proposed move to simplify category classifications of mutual fund schemes may lead to a change in the definition of balanced funds. The capital markets regulator has been going slow on approving balanced funds in the past few years and unofficially insisting on a 50:50 equity-to-debt mix for new scheme approvals. Currently, there is no standard definition of balanced funds. Several fund houses already offer balanced schemes that have an equity allocation of 65 per cent or higher. This allows them to be classified as equity schemes, which enjoy a tax advantage over debt funds as capital gains become tax free after a year. Since most diversified equity funds offer a 70-100 per cent equity exposure, the regulator believes a balanced fund offering 65-75 per cent does not offer much differentiation, according to sector officials. Fund houses, on the other hand, have been reluctant to launch …

RBI seeks to regulate peer-to-peer lending The Reserve Bank of India (RBI) on Thursday came up with a discussion paper on peer-topeer lending (P2P), seeking to regulate the fast emerging crowd funding platforms as the new financing model has assumed importance too significant to be ignored.

Interestingly, the platform owners and investors welcomed the development as regulation gives RBI’s stamp of approval to a business that is completely banned in countries like Japan and Israel.

“Any space where money changes hand should be regulated. Regulation is good for the industry, but it should be light regulation” said Mohandas Pai, former board member of Infosys and investor in Faircent.com, a P2P lending platform. “Regulation will help us in our business and we can approach the court of law as legal entities for our needs and even for recovery,” said Bhavin Patel, co-founder of LenDen Club, a P2P platform.

In fact, RBI itself is aware of this and sounded a little hesitant in giving this recogn…

2.2 million GST returns filed till 6 pm, deadline ends midnight Nearly 2.2 million goods and services tax (GST) returns have been filed so far for August as businesses flocked the GSTN portal to submit their returns on Wednesday —the last day for tax filing.

Over 2.2 million returns were filed till 6 pm,a source said.

Return filing would continue till midnight.

This is the second month of return filing under the GST regime.

Similar to last month, businesses thronged the GST Network portal on the last day to pay taxes.

Nearly 4.5 million businesses had filed returns in July, fetching a revenue of Rs 95,000 crore to the exchequer.

Finance Minister Arun Jaitley had earlier in the day said that GSTN has the capacity to handle 100,000 returns per hour, which translates to 2.4 million returns in a day. But if majority of the taxpayers decide to pay taxes on the last day, then the system would have some trouble.

“Therefore I would appeal to everybody, it is in their interest (to file returns early),…

Debarred firm directors may approach courts The government´s move to debar directors of companies that have not filled annual returns for three successive years is likely to be challenged in courts citing retrospective application of the Companies Act, 2013.

Asageneral rule, the law is always applicable prospectively unless any prior date is mentioned specifically, says Sumit Naib, associate director, Companies Act, 2013, that pertains to disqualification of directors due to nonfiling of financials and annual returns for three years, is applicable to all types of companies, including private ones, with effect from April 1, 2014. Prior to enactment of this new section under Companies Act, 2013, the corresponding section under the Companies Act, 1956, was applicable only to public companies.

The Ministry of Corporate Affairs earlier this month struck off the names of around from the records, found to be without any business activity or had not filed financial statements for three years or …

Banks can Classify Priority Loans as Standard Debt: RBI The Reserve Bank of India has assured banks that they can classify priority loans extended to defaulting companies in the bankruptcy process as standard debt in a move aimed at ensuring that entities which can be revived are able to raise resources, said people with knowledge of the matter. This will come as a relief to those companies that are struggling to recast loans within the strict deadline imposed by the Insolvency and Bankruptcy Code.

The central bank has however said this classification will be allowed only if repayments are made every month rather than later in the form of bullet payments or after a few months. RBI did not re spond to ET's queries. The banks had sought a clarification on the difference in treatment of such loans by banks and finance companies. Priority loans take precedence over other forms of debt and are repaid before other loans in the event of liquidation.

Finance companies without any existing e…