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Service tax has been waived to incentivise cashless transactions through online booking, says official Train tickets booked through the IRCTC website will become cheaper from tomorrow till the end of the year as the government has waived service tax to encourage cashless transactions in the wake of the demonetisation exercise. Service tax will not be levied on tickets booked through the IRCTC website from November 23 to December 31, said a senior Railway Ministry official. Rs 20 is levied as service tax on Sleeper and Rs 40 on AC classes for booking tickets through IRCTC. Service tax has been waived to incentivise cashless transactions through online booking, the official added.  23RD NOVEMBER, 2016, THE BUSINESS STANDARD, NEW DELHI

Also allows rupee-denominated cards to be issued for NRI, foreign travellers In a bid to boost the growth of the industry, the Reserve Bank of India (RBI) has relaxed the norms for prepaid instruments (PPIs). A few days after issuing the final guidelines for niche banks, RBI has now allowed PPIs to issue cards with balance of up to Rs 1 lakh. Earlier, the limit was Rs 50,000. "It has been considered necessary to amend certain provisions of the existing guidelines and issue additional guidelines for ensuring growth of the prepaid payment industry," RBI said in a notification. In a bid to boost the growth of the prepaid payment industry, RBI has also introduced a new category of open system PPIs. With this, a card can now be issued to the dependant or family member only if the account is fully Know Your Customer compliant (KYC). And only one card per beneficiary can be introduced. For such PPIs, the maximum cash out allowed per month is Rs 25,000 and Rs 10,000 per transaction....

Grains, non-mineral water might be on the list; biscuits, butter and cheese might attract GST About 80 items are likely to make it to the exemption list under the proposed goods and services tax (GST), including grains, green coconut, poha, unprocessed green tea leaves, and non-mineral water. Items such as coffee and processed foods like biscuits, rusk, butter and cheese currently exempted from excise duty, may draw GST. There are currently around 300 items in the exemption list from central excise duty and 90 from the states value added. A committee of officials headed by Revenue Secretary Hasmukh Adhia is preparing the item-wise list for GST rates. Hectic lobbying was done for segment-wise GST rates. Sources said the committee of officials received over 16,000 representations. For instance, sources said, makers of refrigerators in 200 litre category with chlorofluorocarbon (CFC) made a representation to bring this item in the 18% slab as against the 28% slab. The item, they said, wa...

Continued lack of consensus at next meeting could cast shadow on GST rollout by April 1 Most issues related to the proposed Goods and Services Tax (GST) taken up by the GST Council have been resolved. But administrative control over assessees has become a  prickly matter, dividing the Centre and states. Even an informal meeting between Finance Minister Arun Jaitley and state finance ministers failed to resolve the matter on Sunday, five days ahead of when the GST Council is slated to take up the issue. While the states and central finance officials are set to meet on Monday, the lack of consensus has the potential to cast a shadow on the planned GST rollout by April 1, 2017. States, including West Bengal, Uttar Pradesh and Tamil Nadu, also took the opportunity to raise the issue of demonetisation and its impact on their treasuries with the finance minister. After Sunday’s three-hour meeting, Jaitley said: “The meeting has remained incomplete. Discussions will continue on November ...

The taxman has initiated a country-wide operation to identify suspect bank accounts where huge cash deposits have been made post Nov 8 Warning people against depositing their unaccounted old currency in someone else's bank account, the tax department has decided to slap charges under the newly enforced Benami Transactions Act against violators that carries a penalty, prosecution and rigorous jail term of a maximum seven years. In a related development, official sources said that the department has detected over Rs 200 crore in undisclosed income after it conducted over 80 surveys and about 30 searches in cases of suspicious usage of the scrapped currency. About Rs 50 crore has also been seized in these operations since November 8, they said, across various states. The sources said the taxman has initiated a country-wide operation to identify suspect bank accounts where huge cash deposits have been made post November 8, when government demonetised the Rs 500 and Rs 1,000 currenc...

Modi says govt 'flexible' to provide relief to the poor as demonetisation is enforced Prime Minister Narendra Modi on Sunday claimed banks had received deposits worth Rs 5 lakh crore since he announced the demonetisation scheme on November 8, and would  soon give loans at cheaper interest rates.  Modi said his government wasn’t “obstinate” about implementing the scheme, and has shown “flexibility” to provide relief to the poor.  The PM also seemed to suggest that the money recovered because of “note ban” will help government provide housing to the poor in rural areas by 2022.  He also advised the poor to not let their Jan Dhan bank accounts be misused. Modi asked people not to allow others to deposit Rs 2.5 lakh in their accounts, with promises of getting a cut. “The law is strict. The account owner will get punished,” he said.  Addressing a Bharatiya Janata Party election rally in Agra, the PM came across less combative than his speeches in Goa and Belgaum, Ka...

Small businesses, self-employed professionals have to gear up for higher scrutiny of their income, expenses As the initial frenzy over de-legalising of Rs 500 and Rs 1,000 currency notes ebbs, many small business owners and self-employed professionals are learning to live with a new reality — there will be more scrutiny of their incomes, expenses and tax compliance. Many tax consultants and chartered accountants say there have been several enquiries from clients seeking guidance on how to rework their businesses to remain tax compliant. “Bulk of these enquiries are from traders and self-employed professionals who have a fairly large cash component in their business dealings that usually escaped the book of accounts,” says Paras Mehra, a Delhi-based chartered accountant.   Pavan Kumar Vijay, founder and managing director, Corporate Professionals, says: “We have received at least 50 requests from clients looking to restructure their businesses or register new companies.” Expert...

Withdrawal, deposit and other banking services allowed; senior citizens exempted Indian Banks’ Association (IBA) on Friday said banks on Saturday will not exchange old Rs 500 and Rs 1,000 notes with the new ones to perform other banking related duties, which have been on hold since November 8. Senior citizens would be exempted from this restriction. However, a customer can still withdraw and deposit money at the counters. A customer can withdraw up to Rs 24,000 in a window of seven days, starting from the first day of withdrawal. “All these days our own customers have suffered because we have not been able to do their work. So, we have seen lot of pending work at branches, especially for our existing customers. We, from IBA, have taken a view that on Saturday we shall be exclusively doing work for our own customers. And we will not be doing exchange of notes (for outside customers),” said Rajeev Rishi, chairman, IBA. The IBA decision is only for Saturday and from Monday onwards custom...

WIDENING TAX NET Capital gains made on investment in Indian shares beginning April 1, 2017 to be taxed here India and Cyprus have signed the revised tax treaty along with the protocol, plugging a gap that allowed investments routed through the country to escape tax in India. The protocol signed on Friday is expected to come into effect in India, in respect of income derived in fiscal years beginning on or after April 1, 2017. The amended tax treaty provides for source-based taxation of capital gains arising from alienation of shares, implying that capital gains made on investment in shares of Indian companies will be taxed in India. It provides for grandfathering of investments made prior to April 1, 2017, which would continue to be taxed in the country of residence. India has similarly updated its tax treaty with Mauritius, which has a 32.8% share in FDI into India since April 2000. Cyprus has a 2.88% share over this period. “The signing of the revised of the revised India Cyprus tax...

The government on Friday put out a revised draft of a bill to check unauthorised chit funds and Ponzi schemes, proposing strict measures such as up to 10 years imprisonment and heavy penalty on operators of such schemes. The revised draft of `Banning of Unregulated Deposit Schemes and Protection of Depositors' Interests Bill, 2016 seeks to provide for a comprehensive code to ban unregulated deposit schemes and protect the interests of depositors. The bill stipulates that any deposit taker who promotes and accept deposits in an unregulated deposit scheme may be punishable with imprisonment for minimum term of two years which may be extended to 10 years and with a fine which may extend to twice the amount of aggregate funds collected from subscribers, members or participants in such schemes or arrangements. The bill also provides for the central government to autho rise creation of an online data base of information on deposit taking activity in India. Public comments on it have bee...

SBI Alone Has Seen Rs 1.34L Cr Inflow: Chairman Bhattacharya Total deposit mobilisation by banks crossed Rs 4 lakh crore on November 14, according to the Indian Banks' Association. The amount is expected to have since gone up as State Bank of India, the country's largest lender, has seen “demonetisation deposits“ grow from Rs 1.04 lakh crore on November 14 to Rs 1.34 lakh crore at 4pm on November 18. According to SBI chairman Arundhati Bhattacharya, a large part of the deposits would be withdrawn as depositors get back to spending. But 10-15% of the money that citizens have been forced to deposit in banks should stay back, she said. Speaking to TOI, Bhattacharya said that SBI has done 11 crore transactions since demonetisation and has collected deposits of Rs 1.34 lakh crore. Part of the reason for the higher number of transac tions was that a large number of citizens were turning up to exchange notes, with several suspected to be repeat visitors. According to Bhattacharya, th...