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Showing posts from July 21, 2017

Goods bought with loyalty points will face tax under GST

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 purchase. Usually, a customer earns 1 point for a certain a…

NSE seeks to settle unfair access issue with regulator

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 executed in less than a se…

Sebi may cut listing time to three days

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 doesn't get debited until the shares are allotted. This…

Few takers for easy GST scheme

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 the deadline is not extended, would be n…

No TDS on income if GST paid on services rendered: CBDT

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