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Industrial workers drawing a salary of up to 21,000 will be eligible for healthcare at clinics run by ESIC ESIC: wage ceiling hikes over 20 years The government on Tuesday overruled opposition from employers to allow an increase in the number of people eligible for Employees’ State Insurance (ESI), which provides medical care to industrial workers and their dependents, by raising the salary cap of beneficiaries to Rs.21,000 per month from Rs.15,000. This means all industrial workers drawing a salary of up to Rs.21,000 will be eligible for health care—from primary to tertiary— at more than 1,500 clinics and hospitals run by the Employees’ State Insurance Corporation (ESIC) directly or indirectly. The move will add three million workers to the ESIC pool, benefiting 12 million more people when their dependents are taken into account. Tuesday’s decision will add nearly Rs.3,000 crore to the labour ministry-run ESIC’s corpus annually. The pro-worker step comes days after a natio...

States will foot the bill of Rs50-60 as they try to shield traders from high costs, ensure a smooth transition to new tax regime Every tax payment and return filing under the goods and services tax (GST) regime will cost around Rs.50-60, but traders will not have to bear this cost. Instead, the states will bear this cost as they try to protect the trader base from higher costs and ensure a smooth transition to the GST regime. Under GST, the entire dealer registration, tax payment, tax return filing and refund will be online and administered by the GST Network (GSTN). GSTN was set up in 2013 as a not-for-profit firm and was envisaged as the technology backbone for GST. As part of its revenue model and to sustain its operations, GSTN will recover these costs by levying a fee for transactions undertaken on the network. Under GST, every trader will be required to file a monthly return as well as an annual return. Separately, they will need to file a return each for purchases an...

An analysis carried in this newspaper about the states that have already ratified the Constitution Amendment Bill on Goods and Services Tax (GST) provides revealing insights into the political possibilities that can arise out of the proposed indirect taxes regime. It also brings out with great clarity the nature of the tough political resistance the new law and its enforcement could face. Of the 18 states that have endorsed the GST Bill, 10 are ruled by the Bharatiya Janata Party (BJP) and its allies. This is not a surprise. After all, the GST proposal in its current form has been spearheaded by the BJP-led government at the Centre. What, however, is a surprise is the fact that so far the expected ratification has not come from quite a few of the states, ruled either by aBJP-led alliance or those parties that had supported the Constitution Amendment Bill in Parliament. For instance, the Trinamool Congress-led West Bengal had initially planned to ratify the GST Bill at a special A...

More than half the states have already passed the Constitution amendment Bill on GST. Do you think the GST could now be rolled out on April 1, 2017, as targeted by the government? Since the Bill has been passed and ratified by the required number of states, it is for the government to take it forward. It needs to ensure there is strong and broad consensus on the nature of CGST (central GST) and IGST (integrated GST) Bills. The central government also needs to work with the states on an acceptable GST rate. The rate has to be capped since it is going to subsume all present duties and taxes of the Centre and states. The government should keep it at a globally acceptable threshold. Which is what? Anything below 20 per cent. Above 20 per cent would be meaningless. And, don’t forget that they (government) have not been able to persuade some states to allow taxing of petroleum goods. These are there in the Bill but zero rated. Alcohol has been completely kept out; electricity is out. ...

In a first of its kind townhall meet on(GST)goods and services tax Bill,Revenue Secretary Has mukhAdhia and tax officials will address traders and industry on September 17to clear doubts and create awareness on the landmark indirect tax regime set to kick in from April 1 next year. The meeting is part of an out reach programme planned by the Revenue Department in the Finance Ministry. Business Standrard New Delhi,05th September 2016

The National Democratic Alliance government at the Centre wants to change the date of the Union Budget,in sync with the suggestions of an expert panel examining the feasibility of a new financial yearfor the country. At present,the Budget is usually presented on the last day of February.A committee headed by for merchief economic advisor Shankar Acharya was setup to examine whether the April-to-March financial year could be replaced with anewone. With the possibility of an earlier Budget date,the Budget season has already begun this year.Sources said senior officer shavestarted to brain stormonthethemes of the annual exercise. Specifics are yet tobe worked out,but the broad theme would be“development”,according to a highly placed source.The focus will be on achieving eight percent yearly growth and government expenditure with an eye on that goal,he said. Several state elections,including that of Uttar Pradesh,are scheduled nextyear. Prime Minister Narendra Modi,it is lea...

After making the Permanent Account Number (PAN) mandatory for high-value transactions, the government is now considering banning all-cash transactions of more than ~3 lakh. The Supreme Court-appointed Special Investigations Team (SIT) on black money has recommended this to the Centre. It has also proposed that holding more than ~15 lakh in cash be made illegal for individuals and for companies. “Domestic black money is a bigger menace than the illegal cash stash abroad. This will allow the tax department to track all high-value transactions and reduce cash in the economy,” says Neha Malhotra, executive director, Nangia & Co. Rise in income-tax (I-T) notices? Once these guidelines are in place, the I-T department will get a better handle on your financial transactions. And, any unexplained highvalue transaction could lead to notices seeking explanation about the source of funds. At present, some transactions where individuals pay cash of more than Rs.3 lakh include propert...

Experts feel a higher rate may add to inflationary pressure, hurt services taxed at around 15% now Policymakers in some quarters of the government favour a goods and services tax rate of around 16% to make the reform more acceptable and also ensure it does not add to inflationary pressures. The new fiscal framework could provide the government wiggle room so that if revenues take a hit because of the low tax rate, this space could be utilized till the biggest tax reform since Independence starts yielding gains. “A lower tax rate will ensure that the new tax is readily accepted... It means that there would be no demand and price shock to the economy,“ said a top government official who is aware of the discussion. This would be closer to the 16.8% average goods and services tax in highincome countries than the 14.4% in emerging economies. A number of countries including Australia, New Zealand and Canada experienced an increase in prices after GST was implemented, a fact that th...

Rise Of Debit Cards, New Payment Tools Make Life Easier For Customers Not so long ago, bank strikes would impact everyone -from large companies to the common man, who queued up at a branch to withdraw money or deposit a cheque.Now for most, bank strikes pass off as a non-event given the advent of other payment channels -from plastic money to mobile wallets. Add to that the rise of private banks and weakening grip of unions. On Friday , when trade unions called a nation-wide strike to push their demands, the All Indian Bank Officers' Confederation (AIBOC) pulled out of the strike at the last minute, even as five other unions went ahead.As a result, the impact was limited at lenders such as SBI. And, banks' work process has undergone a big change.“Money transfer can be done 24x7. There are options such as Immediate Payment Servi ce (IMPS), which are outside the branch network and are not affected by strikes,“ said A P Hota, who heads National Payments Corporation of India...

Rajasthan Assembly on Friday unanimously ratified the Constitution Amendment Bill on Goods and Services Tax (GST) passed by Parliament. Speaking on the resolution, Chief Minister Vasundhara Raje said that the GST will have a very positive impact and states including Rajasthan will get advantages. Business Standard New Delhi,03th September 2016

The Reserve Bank of India(RBI)hascome out with yet another measure to ensure better real is ation of stressed assets by widening the market for their sales.RBI has allowed banks to sell these assets toother banks,non-banking financial companies,or financial institutions. Earlier, sales of stressed assets were restricted to securitisation companies/reconstruction companies. But banks believe this is just another step,andit may take a while before it turn sout effective. "At a time when most banks ares addled with high level sof bad loans,it is difficult to imagine they will be actively participating in the market to buy more stressed assets and then resolving them,"said the chief financial officer of a private sector bank. However, these new norms may bring down sale of stressed assets to asset reconstruction companies(ARCs). "Banks will have to continue to make loan-loss provisions even if they sell stressed assets to ARCs.This is an important gap the RBI is tr...