Skip to main content

Financial year change to Jan-Dec ruled out for now

Financial year change to Jan-Dec ruled out for now
The Centre’s plan to change the financial year cycle from April-March to January December has been put on hold and may not materialise in the Narendra Modi government’s current term, according to a senior official.
Any change in the financial year would have to be agreed upon by all states, and a number of them were still not in its favour, the official, who did not wish to be named, said on Monday. Besides, the government did not see many advantages in switching to the January December cycle, the official added.
Surprisingly, changing the financial year has been one of Prime Minister Narendra Modi’s pet themes.
“A number of states are not on board with the idea. The financial year change has been put on the back burner,” the official said, adding that a final decision on the matter could be taken in 2019.
“Too many disruptions like the goods and services tax (GST) and lack of data are also hurdles in advancing the financial year,” the official said. The government, the official said, was also aware of the fact that general elections in 2019 might make the process more complicated.
Modi first talked about the financial year change in a governing council meeting of the NITI Aayog in April where all states participated. He also directed states to take a lead on the same.
Madhya Pradesh became the first state in May to formally announce a shift to the January-December financial year from next year. Its current financial year will end in November. 
Union Finance Minister Arun Jaitley, too, announced in Parliament that the government was planning to switch to the January-December financial year.
There have been some conflicting voices emanating from the government so far. While some officials had earlier told Business Standard that a shift from April-March to January-December could happen as early as 2018, some others had said such a shift, with short-term disruptions, might not happen so soon after the implementation of the GST
The Centre is studying the report of the Shankar Acharya committee, which was tasked with studying the implications of any such shift.
The panel’s report has not yet been made public but it is understood to have recommended against the change.
India has been following the April-March financial year since 1867, mainly to align the Indian financial year with that of the British government.The
Business Standard, New Delhi, 29th August 2017

Comments

Popular posts from this blog

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…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…