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Those buying goods at prices lower than prevalent market rates in exchange offers for older items,apractice popular in the consumer durables and electronics sectors, might have to shell out more in the goods and services tax (GST) regime. For instance,anew phone handset is sold for ~20,000 in exchange for an older one. But, the price of the new handset, without the exchange offer, is ~24,000. Then, the GST would be levied on the higher amount; at present, valueadded tax (VAT) is applicable on the cash component. Also, traders, dealers and distributors who have transition stock when the GST is rolled out might not get the full refund for central taxes already paid. This is likely to affect dealers of aerated drinks, luxury cars, cigarettes, and pan masala. These goods will be taxed at the peak rate of 28 per cent. The rules became clear after the Central Board of Excise and Customs (CBEC) on Sunday issued draft rules on composition, valuation, transition and input tax credit...

Union Minister of State for Finance Arjun Ram Meghwal on Sunday expressed confidence that the goods and services tax(GST) will roll out from July 1.“100 percent GST will be implemented from July 1,” Meghwal said when asked on the GST roll out. “In the last meeting four rules had been approved and the next meeting is in Srinagar,” he said. The Business Standard New Delhi, 03rd April,2017

The Supreme Court (SC) ruled last week that the premium collected by a company on its subscribed issued share capital is not part of "capital employed in the business of the company" and it would not be entitled to claim income tax deduction on that amount received from shareholders. The SC said so while dismissing the appeals titled Berger Paints India Ltd vs CIT. Earlier, the Income Tax Appellate Tribunal and the Delhi High Court had held the same view, interpreting Section 35D of the I-T Act. The company had unsuccessfully argued that it hadissued shares on a premium which was a part of the capital employed in their business and therefore eligiblefor deduction under section 35D. The Business Standard New Delhi, 03rd April,2017

Credit to be given once Central GST is paid on supply and companies give proof of purchase Companies can get credit of up to 40% of their goods and services tax liability against excise duty already paid on stocks lying with traders or retailers when GST is rolled out. According to the latest set of rules put out by the government, credit would be given once the central GST has been paid on the supply and the applicant has provided evidence of purchase of these goods.The company would not need to provide any duty paid document. The new set of rules defines transition for companies, dealers and retailers that will have stocks, with taxes paid under the previous regime, when the country switches to GST. Experts, however, said the amount of deemed credit of 40% of tax payable could be quite low in a few cases, particularly for sectors where the existing rate of excise duty is high, like automobile. Further, for products that attract a higher GST rate of 28%, the loss due to...

MONETARY POLICY REVIEW Focus will be on squeezing excess liquidity from the banking system, say economists THE SURGE IN CASH DEPOSITS FOLLOWING DEMONETISATION HAS RESULTED IN LIQUIDITY RISING TO Rs 4 L CR IN MARCH FROM Rs 2 L CR IN JANUARY  The Reserve Bank of India (RBI) will focus on squeezing excess liquidity from the banking system in its monetary policy meeting on April 5-6 while keeping policy rates unchanged and retaining its neutral stance, according to a Mint survey.  The surge in cash deposits following demonetisation resulted in liquidity rising to Rs 4 lakh crore in March from  Rs  2 lakh crore in January. Announcing the February 8 policy, RBI said surplus liquidity should decline with progressive re-monetisation, but the abundant liquidity with banks is now expected to persist into the early months of fiscal 2017-18. “We don’t expect any change in the monetary policy stance as growth-inflation dynamics haven’t changed much since Februa...

WARY OF EFFECT Centre moves to notify new rules for Act; activists criticise move saying it would increase number of attacks on RTI users The Centre has moved to notify new rules for the Right to Information (RTI) Act under which an RTI case would cease to exist after the death of an applicant. In its first attempt to change the working of the transparency legislation, the Modi government has come under fire over this controversial rule as RTI experts say this would increase the attacks on applicants. The department of personnel and training (DoPT), the nodal department for the implementation of RTI Act, has drafted new rules and sought comments till April 15. The exercise comes five years after RTI rules 2012 were notified. After the Congress-led UPA government withdrew a controversial draft rule, the Modi government has sought to introduce it again much to the alarm of RTI activists.Rule 12 on “Withdrawal and Abatement of appeal“ of the draft reads, “The Commission may in its...

Only way to create duty differential is to impose higher customs duty in some cases: Revenue secy India is unlikely to provide any exemption from countervailing duty to IT or telecom manufacturers such as Apple in the proposed goods and services tax (GST) regime, revenue secretary Hasmukh Adhia told ET. Countervailing duty is levied on imports in lieu of central excise duty to provide a level playing field to domestic manufacturers vis-à-vis imports. “How can there be exemption when there is no CVD?“ Adhia said. Under the new regime, additional customs duty, commonly known as countervailing duty (CVD), will be subsumed by GST, which will be levied on all imported goods. On giving relief through reimbursement of CVD, he said there is no plan for this. “I don't think that the government plans to provide such a subsidy. Duty differential was created to encourage Make in India.But now the possibility of creating such a duty differential un der the GST structure does not exi...