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Effective April 1, banks have to set aside higher provisions for loans given to highly indebted companies, the system wide limit for which is set at Rs 25,000 crore for the financial year 2017-18. Banks are not comfortable with this move, and some of them have asked the Reserve Bank of India (RBI) to go easy on the provisioning part. The limit of indebtedness comes down to Rs 15,000 crore from 2018-19, and then Rs 10,000 crore from April 2019 onwards.Beyond these limits, the RBI wants banks to invest in debt instruments issued by the companies, rather than giving them loans directly. But, under the International Financial Reporting Standards (IFRS) norms, banks won´t get any relief on any kind of exposure to indebted companies, be it loans or investing in their bonds.Banks, therefore, have requested the RBI to give them more time, even as they welcome the idea of letting the companies tap the bond market. “For stressed companies, banks are anyway incurring heavy provisioning.And we

CBDT clears the air in the backdrop of ban on cash transactions of more than Rs 2 lakh a day The ban on cash transactions of more than Rs 2 lakh a day will not apply to withdrawals from banks, post office savings accounts and cooperative banks, the Central Board of Direct Taxes said. The Finance Act 2017 prescribed to impose a penalty equal to the transacted amount on those who violated the rule restricting cash transactions. It provides that no one can deal in cash in excess of Rs 2 lakh a single day, in respect of a single transaction or transactions relating to one event or occasion. The restrictions will also not apply to any receipt by government, banking company, post office savings bank and cooperative bank, the CBDT said in a statement. A notification will be issued to implement this change. To curb large cash transactions and discourage black economy, finance minister Arun Jaitley had in the 2017-18 budget proposed to ban transaction of over Rs 3 lakh a day. This

If gold attracts 12% tax under GST, total tax may work out to be 22% as import duty is 10% Gold may become costlier for Indians if the government accepts chief economic advisor Arvind Subramanian's suggestion to put the yellow metal in the 12% tax bracket under GST. With an import duty of 10%, tax on gold may turn out to be 22%, which will reduce its consumption in the physical form in the second largest gold consuming nation in the world. At present, gold attracts an import duty of 10%. In addition, there is a VAT of 1% and an excise duty of 1%.“For a healthy development of trade, GST and import duty combined should not cross 12%; ideally, i t should be in the range of 10 - 12 % ,“ Shekhar Bhandari, business head for global transaction (banking and precious metals), Kotak Mahidnra Bank, told ET. Late last year, there was agreement on five broad GST slabs -0 (the exempted category), 5%, 12%, 18%, and 28%. While retailers and jewellers want the government to peg GST at 1.25%

GST Network, the IT infrastructure backbone that powers the new indirect tax system, is geared to accept up to three billion invoices a month from 8.5 million tax payers from day one.  The common portal(www.gst.gov.in) acts as an interface between different stakeholders in the GST ecosystem, namely taxpayers, tax departments, banks, the Reserve Bank of India, external service providers, among others. The portal becomes the touch point for taxpayer registration, invoice upload, tax payment, getting input tax credit, maintaining the cash ledger and liability register, generating MIS reports for taxpayers, tax officials and other stakeholders, and keeping track of status of returns. The system matches (or reconciles) the invoice data in a decentralised manner. The sales data uploaded by the seller (GSTR-1) get auto-populated by the GST system in the purchase register of the buyer (GSTR-2). The buyer has to accept, reject or modify the same based on invoice(s) in his possession. The accep

“Dealing with legacy issues,” responded the chief financial officer of a large manufacturing conglomerate when asked to comment on his biggest concern about the goods and services tax (GST). As corporate India gears up to be GST-ready, the ongoing litigation and tax dispute cases are something most businesses are cagey about. According to the Comptroller and Auditor General (CAG) report for the period ended March 2016, there were 243,167 demand and 76,151 refund cases pending across forums under service tax and central excise. Tax experts say the litigation before the tribunal and courts largely relate to exports, classification of goods, and credits under central excise and value added tax (VAT). “The overall objective of the central and state governments has been to close as much litigation as possible before the advent of the GST,” says Anita Rastogi, partner, indirect tax, PwC. However, given the volume of pending cases and disputes, it may not be possible to clear the backlog bef

Government gets Rs.17.1 lakh crore in its kitty  Tax collections at Rs 17.1 lakh crore for 201617 exceeded the Revised Estimates (RE) of ~16.97 lakh crore by 0.8 per cent, official figures showed on Tuesday.Corporate tax and excise duty collections fell short of RE, which implies that industrial recovery could be prolonged.The tax collection figures in 201617 were 18 per cent higher than the previous fiscal year´s figures and the highest growth in the past six years, according to Revenue Secretary Hasmukh Adhia. With these tax numbers coupled with a spurt in dis investment proceeds in March, the Centre will be able to rein in its fiscal deficit  at 3.5 per cent of the country´s gross domestic product (GDP), as budgeted despite figures till February exceeding the targeted 13 per cent, said Devendra Pant, chief economist, India Ratings.Direct tax collections were ~8.47 lakh crore, same as in the RE, and  14.2 per cent higher than in the previous year. Indirect tax collections were Rs 8.

  In a move that might ease the judicial load on the market regulator, the Supreme Court has ruled that the circulars issued by the Securities and Exchange Board of India (Sebi) cannot be challenged before the Securities and Appellate Tribunal (SAT). Circulars, which could be administrative orders, were not necessarily quasi judicial and hence could not be appealed in SAT, the apex court said, while pronouncing an order in the case between Sebi and National Depository Services Ltd (NDSL). SAT is a quasi-judicial body that hears appeals against orders given by Sebi.  “Administrative orders such as circulars issued under the present case referable to Section 11(1) of the (Sebi) Act are obviously outside the appellate jurisdiction of the tribunal …the preliminary objection taken before the SAT is sustained.The judgment of the SAT is, accordingly, set aside,” said the Supreme Court in the order on March 7. NDSL and Sebi were in dispute over an administrative circular of 2005.The circular