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Your shopping out of the accumulated loyalty or bonus points will face tax under the goods and services tax (GST) regime. GST would be levied on the total price of the  product and not on the discounted value after adjusting the bonus, loyalty or rewards points.  “Loyalty points are nothing but a mode of payment,  GST must be paid on total value of supply irrespective of the fact that loyalty points are utilised while making a  purchase,” according to a report on textiles prepared by a group of officials.  The government had set up 18 sectoral groups to ensure smooth transition to GST. The law committee, which is meeting on Thursday and Friday, would take a final view on  this now.  Loyalty cards are very popular with retail chains these days as a means of coaxing customers to make repeat purchases. Customer earns certain bonus points on shopping  at stores and these points can then be set off from the total bill amount in subsequent pur...

The National Stock Exchange of India Ltd (NSE) on Thursday sought a settlement with the markets regulator over allegations that it provided unfair access to its high- frequency trading systems to some brokers. NSE applied to the Securities and Exchange Board of India (Sebi) for a settlement through the so-called consent mechanism three days after Vikram Limaye took charge as  MD and CEO. Consent mechanism is a process through which entities can settle charges by paying a penalty without admission or denial of guilt. "Sebi will review the application and get back to NSE on the future course of action. NSE will work with Sebi on early resolution of this matter," the exchange said in  an emailed statement. On May 22, the market regulator had sent show-cause notices to the bourse and 14 percent and former officials over charges of providing some brokers unfair access to  its algorithmic, or high frequency , trading systems that allow thousands of orders to be execut...

The Securities and Exchange Board of India (Sebi) plans to reduce the time taken for a security to list  on an exchange to three days from the date of closure of its initial public offer (IPO), instead of the  earlier envisaged timeline of four days. At present, public issues take six days — termed T+6 — to list after closing for a subscription.  Reducing the listing timeline to T+3 days would, feel experts, help reduce the impact of market  volatility. On January 1, 2016, Sebi had brought down the time taken for listing of shares to six days, from the  earlier 12 days. Investors were also allowed to give their application forms to banks, brokers,  depository participants and registrar & transfer agents. Earlier, the forms could be sent only through  banks and brokers. The regulator had also made use of Application Supported by Blocked Amount (Asba) compulsory for all  categories of investors. In this, an IPO applicant's account do...

Only 100,000 dealers opt for composition scheme, which provides flat rates, smooth compliance A scheme under the goods and services tax (GST) that provides easy compliance and a flat rate to small businesses has had a muted response so far. The new indirect tax regime was rolled out on July 1. Till now, of the 8 million registrations on the GST Network (GSTN), only 100,000 or 1.25 per cent have opted for  the composition scheme. The deadline for choosing this scheme is Friday. This is likely to be extended. Entities with an annual turnover of up to Rs 75 lakh are eligible to apply for the scheme, under which they are allowed to pay tax at the rates of 1 per cent (traders),  2 per cent (manufacturers), or 5 per cent (restaurateurs). “The number (of registrations under the scheme) is quite small. I hope the deadline is extended, as more people would want to opt for it,” said Navin Kumar, chairman,  GSTN. The next opportunity to register for the scheme, if th...

The Central Board of Direct Taxes (CBDT) has clarified that no income tax would be with held on payments  made to assessees with respect to the goods and services tax (GST) component on services rendered. It said tax would be required to be with held only on the amount paid without including the GST on  services component. For this purpose, terms of agreement between the payer and the payee would be taken into account. Under the old service tax regime as well, the CBDT had clarified that not a was required to be with held  on such service tax component. Various representations were made to the CBDT seeking clarifications whether the same kind of rule would  continue under the GST as well. Consultants PwC said the clarification will have a positive impacton reducing the prevailing ambiguity  in the industry. The Business Standard, New Delhi, 21st July 2017