Skip to main content

Gst Council To Meet Today, First Time After July 1 Roll Out

A fortnight into the GST, small and medium dealers, and manufacturers are grappling with issues of the new indirect taxation regime.
Finance Minister Arun Jaitley will chair the 19th meeting of the GST Council on Monday, via video conference.
This would be the first meeting after the implementation.
The meeting would reportedly discuss tweaking of rates on some products, besides taking stock of the rollout of the new indirect tax system.
The spread was 1.9 percentage point at the end of FY16 and 4.8 percentage points at beginning of the current rally in March 2013.
The spread was 1.5 percentage point at the end of March 2008.
The earnings yield is the potential yield for an equity investor if the company pays 100 per cent of its current (annual) net profit as equity dividend.
Simply put, it is net profit divided by the market capitalisation of a company.
Typically, the earnings yield on equities should be sufficiently higher than the yield on riskfree assets (such as government bonds) to compensate for the greater risk of owning equities.
Analysts say that this raises the prospect of an outflow of capital from the equity market if the bond yields in the US harden any further.
“The market has been expensive for too long now, aided by lower interest rates in major developed markets like the US. Any further tightening of interest rates in the US or further fall in the earnings yield in India may lead toamarket correction,” says Dhananjay Sinha, head research, economist and equity strategist, Emkay Global Financial Services.
The benchmark interest rates in the US are up nearly 20 bps since the beginning of the current calendar year.
One basis point is onehundredth of one per cent.
This has been partly compensated by around a decline of 10 bps in benchmark interest rates in India.
While many are expecting interest rate cuts by the Reserve Bank of India, there are others who think otherwise.
They argue that interest rates in India could rise, as various state governments hit the bond market to raise funds to finance the farm loan waivers and bigger fiscal deficits.
For domestic investors, the yield spread on equities (difference between 10 year GSec yield and equities yield) is nowanegative 3.2 percentage point, which is worse than a negative spread of 2.8 percentage point at the end of March 2014 but better than negative 4 percentage point at the end of FY 15.
Simply,abroad portfolio of stocks now yieldsapotential dividend of Rs 3,300 for every Rs 1 lakh worth of investment, down from Rs 4,000 at the end of March 2016 and Rs 6,600 at the end of March 2013.
The market is set to get even more expensive as brokerages expect companies to report declines in net profits onayearonyear (YoY) basis during the June 2017 quarter.
The combined net profit of all Nifty 50 companies is expected to decline by 2.6 per cent YoY during the quarter, while excluding metals & oil companies, the net profit is likely to decline by 7.6 per cent YoY for the June quarter.
Three index companies —TCS, IndusInd Bank, and Infosys —have reported their firstquarter results so far and the net profit trend is far from being exciting.
The Business Standard, New Delhi, 17th July 2017


Popular posts from this blog

RBI rushes in to prop up falling rupee

RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…