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Worry that this would be too low is misplaced A panel chaired by chief economic adviser Arvind Subramanian has reportedly recommended a goods and services tax (GST) rate of 18%. This is less than half the current incidence of cascading indirect taxes on goods. The rate is also the cap that the Congress wants prescribed in the GST law. The government would do well to accept a cap as well as the two other changes the Congress wants: do away with the 1% tax on inter-state sales and resolve tax disputes among the states or between the Centre and the states through a mechanism that excludes parties to the dispute. Continuing with a tax on inter-state sales on which the buyer cannot claim an input tax credit is against the logic of GST. And it is redundant as the Centre stands ready to compensate the states for any revenue loss during the transition. The Centre and the states must settle for an 18% rate when all taxes imposed on goods and services are collapsed into one. By subsuming m

Pension body invests Rs.2,322 cr in ETFs till November 3 this year, with returns at 1.52% — far lower than those on others The Employees’ Provident Fund Organisation ( EPFO)’ s first brush with investment in equity instruments may turn out uninspiring for its future risks with the stock markets. The central board of trustees, ( CBT), chaired by Union Minister of State for Labour Bandaru Dattatreya, reviewed the first tranche of EPFO’s investment in exchange- traded funds. ( An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold.) After the trustees raised concerns over lowerthanexpected returns, the board directed the EPFO to have a re- look at its investment pattern. The EPFO will soon convene a meeting of its finance, investment and audit com

Barely two days before the start of the winter session of Parliament, Finance Minister Arun Jaitley said the government was willing to reach out to the Congress over the goods and services tax ( GST) but counselled the party to reconsider some of its suggestions as they can “ damage” the new indirect taxation system. Speaking at the annual day function of Assocham in New Delhi on Tuesday, Jaitley termed “preposterous” the Congress’ suggestion that tariff must be mentioned in the Constitution amendment Bill. “ It did not dawn on them when ( the then finance minister) PChidambaram accepted the Standing Committee recommendations,” Jaitley said, adding it would be “ extremely unfair” to the country “ if we try to impose in the name of political compromise, a GST with a defective architecture”. “And when tariff rate has to be mentioned in the Constitution itself, ( then it) is a flawed architecture... Because the GST with flawed architecture can actually damage the system much more