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The recommendation of the Supreme Court-constituted special investigation team (SIT) to ban cash transactions above Rs.3 lakh and capping cash holdings of companies and individuals at Rs.15 lakh will be detrimental for India’s traditional economy, according to a leading traders body.   The Confederation of All India Traders (CAIT), which represents 60 million traders, said if implemented, the recommendations will get back inspector-raj and create pressures on credit availability making it difficult for businesses to sustain.   Traditional markets such as Chandni Chowk in New Delhi and Bara Bazaar in Kolkata are expected to be worst hit as they are heavily dependent on cash.   “Another reason why traders heavily depend on cash is because they want to avoid banking services, due to limited workforce, increased cyber crimes and poor digital connectivity,” said Radhey Shyam Maheshwari, a grain trader in Bhopal.   “The rider of s...

Private sector lenders, including ICICI Bank, HDFC Bank and Axis Bank, may soon have the option of turning into fully-owned foreign banks, with the government reconsidering a proposal to allow up to 100% foreign direct investment (FDI) in private sector banks.   The move is likely to be a breather for the struggling banking sector, which has been reeling under the rising weight of bad loans, sources said.   The government currently permits 74% FDI in private banks, with up to 49% allowed under the automatic route. Foreign holdings beyond 49% need to be cleared by the Foreign Investment Promotion Board (FIPB). Among the leading private lenders, the foreign holding in Kotak Mahindra Bank is now at 69.8%, in ICICI    Bank at 65.27%, in Axis Bank at 50.6% and in HDFC Bank at 48%. The move to raise the FDI ceiling will help them, as well as the upcoming payments and small finance banks, tap overseas markets to raise their capital base. ...

The Model GST Law makes it clear that the proposed Goods and Services Tax (GST) regime would have imperfections and anomalies to begin with.For instance, input tax credit on capital goods would not be available for most sectors like transportation, construction and infrastructure. It follows that there would be no `seamless and efficient' crediting of taxes paid, to avoid tax-on-tax and cascading rates, as called for by the Arvind Subramanian Committee last year.   But no matter. The GST regime now in the works would be better designed and `clean' than is usually the case abroad. Now, over 160 nations have some form of value-added tax (VAT), which is what GST is. The idea, of course, is to reform the indirect tax structure, with tax payable only on the value-added at each stage of output or delivery , and input tax credits available for taxes already paid.   But as the Subramanian panel report noted, the tax regimes abroad tend to be either overly...

The tug-of-war between the BJP and the Congress over the GST (Goods and Services Tax) contin ues, delaying a nod to the much awaited tax reforms. If implemented, GST will have a far-reaching effect on India Inc and the broader economy. But it might take at least two years for it to show results, says Raamdeo Agrawal, co-founder, Motilal Oswal Financial Services. In an interview with Kshitij Anand, he said there was a 65-70% possibility that the legislation will go through in monsoon session. Edited excerpts:   How important is the GST Bill for the market? What kind of impact do you expect on the economy and on specific sectors? The probability may be significantly higher than the 50% right now. There is 6570% chance that it (GST) will go through this session. The environment is conducive and that is why the market has started performing. The market is thinking that there is a good chance of it going through. There is no obstruction and the market has not...

The Rajya Sabha on Tuesday passed a Bill which prohibits employment of children below 14 years in all occupations or processes except where the child helps  his family, with the provision for imprisonment up to two years for any violation.   The Child Labour (Prohibition and Regulation) Amendment Bill makes employment of children below 14 years as cognisable offence for employers and provides for penalty for parents.   The Bill, which was almost unanimously passed by voice vote, defines children between 14- 18 years as adolescents and lays down that they should not be employed in any hazardous occupations and processes.   It provides for enhanced punishment for violators. The penalty for employing a child has been increased to imprisonment between six months and two years ( from three months to one year) or a fine of Rs.  20,000 to Rs. 50,000 ( from Rs.10,000- 20,000) or both. The second time offence will attract impri...

Amendment Bill expected in current session of Parliament The government is amending Companies Act to relax provisions for Gujarat Gift Citys international finance centre.   The amendments will relax compliance norms. The amendment bill is expected to be introduced in the ongoing Parliament session. Companies operating in Gift  IFSC set up by Indians will not be considered foreign companies but these will be provided several operational freedoms. These companies will have flexibility in formation of their boards and on independent directors.   Companies in Gift IFSC will be private limited companies or unlisted public limited companies and the new provisions will have a set of relaxations for them, according to a source.   A law expert said companies in Dubais international finance centre operated under a separate law to help them make globally competitive.   “India is still conservative, the tax holiday is shorter and there are hard...

Starting from Tuesday , a group of empanelled chartered accountants are studying the books of 97 schools that have submitted proposals for fee-hike this year.   This process of submitting proposals and verification is based on the direction of the Delhi high court given in January, 2016.   Both chief minister Arvind Kejriwal and deputy chief minister and education minis ter Manish Sisodia, addressed the chartered accountants engaged for the job on Tuesday .“The exercise will be conducted by the empanelled chartered accountancy firm, under the Ernst &Young Foundation, and the report will be submitted to the Delhi Government in the second week of August.The Department of Education has received 97 proposals from various schools for increasing fees,“ says the government's statement.   “Education is a top priority for the Delhi Government and our objective is to ensure that education is not commercialised and parents and students are not exploited by a few un...

www.caonline.in News... 1. NIRC of ICAI is organising a Seminar on Valuation on 23 July at 10AM at India Habitat Centre (Jacranda Hall) Lodhi Road, New Delhi. Register & Pay at www.nircseminars.org. 2. SEBI issues draft paper on REIT(Real Estate Investment Trusts) to attract investors, realtors. 3. Manual signatures on digitally signed invoices is now a valid document for taking CENVAT credit. 4. Due date for payment of service tax under Voluntary Compliance Encouragement Scheme cannot be extended by courts under any circumstances whatsoever and for this purpose, mere giving of post-dated cheques would not amount to 'deposit' with government. 5. CBDT has notified the transfer pricing- computation of arm length price vide notification No. 57/2016 dated 14th July 2016. 6. Time limit for payment of tax and penalty under the Income Declaration Scheme 2016 extended to 30.09.2017. CBDT Press Release dated 14.07.16.