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The Goods and Services Tax (GST) Council, comprising the Union finance minister and state representatives, mainly their finance ministers, cleared most of the draft model GST Bill on Thursday. This leaves mainly the contentious issue of administrative turf between the Centre and states for Friday. Some state finance ministers did not rule out the Centre resorting to voting for resolving the issue of control over assessees under the proposed regime. Beside administrative turf, the Friday meeting will take up the Integrated GST (IGST) and compensation Bills. Agreement over these would be crucial for introducing these in the coming session of Parliament. "The basic model GST Bill has been concluded. Things we have kept aside, such as the issue of cross-empowerment and IGST, will come for discussion tomorrow," Jammu and Kashmir finance minister Haseeb Drabu told reporters after the meeting. He said it was decided earlier as well to go through the entire draft model law fi...

The Goods and Services Tax (GST) Council, comprising the Union finance minister and state representatives, mainly their finance ministers, cleared most of the draft model GST Bill on Thursday. This leaves mainly the contentious issue of administrative turf between the Centre and states for Friday. Some state finance ministers did not rule out the Centre resorting to voting for resolving the issue of control over assessees under the proposed regime. Beside administrative turf, the Friday meeting will take up the Integrated GST (IGST) and compensation Bills. Agreement over these would be crucial for introducing these in the coming session of Parliament. "The basic model GST Bill has been concluded. Things we have kept aside, such as the issue of cross-empowerment and IGST, will come for discussion tomorrow," Jammu and Kashmir finance minister Haseeb Drabu told reporters after the meeting. He said it was decided earlier as well to go through the entire draft model law fi...

The Union cabinet on Wednesday approved a draft ordinance to additionally empower states and allow industries to pay wages digitally, through direct bank transfers or by cheque. At present, the 80-year-old law only permits cash payments. “The government proposes to bring an amendment to Section 6 of the Payment of Wages Act, which will further provide crediting the wages in the bank account of the employees or payment through cheque along with the existing provisions of payment in current coin or currency notes,” a cabinet statement read. A government official said on condition of anonymity that the cabinet has forwarded the draft ordinance to President Pranab Mukherjee for his assent. The draft ordinance proposes changes to Section 6 of the Payment of Wages Act of 1936. The section sought to be amended says that “all payment of wages should be made in cash, with a provision enabling employers to obtain written permission of the worker to pay either by cheque, or by crediting the wage...

Mumbai: Amid rising decibels of the demonetisation debate banks are silently preparing for an upcoming event: Ind AS 109 or Indian Accounting Standard, a global accounting practice that lenders are mandated to adopt that may lead to initial credit losses. Banks including private sector ones like ICICI, HDFC and Axis are actively working on this as they have submitted estimates for such losses to Reserve Bank of India, which is now expected to come out with fresh guidelines on computation of expected credit losses (ECL), a key to banks’ future earnings, three sources familiar with the matter told ET. “The provisioning requirements under IFRS 9 (International Financial Reporting Standard) may be higher than what you are seeing today because we derive numbers on incurred losses rather than expected losses,” said Jairam Sridharan, CFO, Axis Bank. “There will be an incremental provisioning requirement which will result in higher capital necessity or banks capital ratios will go down becaus...

NEW DELHI: Niti Aayog vice-chairman Arvind Panagariya called for a simpler tax regime, elimination of exemptions and precise taxation rules to minimise discretion to prevent the accumulation of black money and build on the benefits that will accrue from demonetisation. “To discourage the creation of black money and curb corruption, we will also need to tackle election funding,” Panagariya told ET in an interview, backing the Election Commission’s call for a cap on anonymous donations at Rs 2,000.  “There is also a proposal for state funding of elections, which may be considered.” Tax reforms will also help lower rates, encouraging savings and boosting revenue through greater compliance. He said demonetisation is likely to bring significant gains in tax revenue, which may allow the government to raise expenditure without violating any of its fiscal goals. Panagariya said without data it may be difficult to estimate impact of demonetisation on the economy in current year but “we wil...

RBI withdrew rules that required bank customers to make deposits of above Rs 5,000 in old notes Facing intense criticism, the Reserve Bank of India (RBI) on Wednesday withdrew rules that required bank customers to make deposits of above Rs 5,000 in old currency notes at one go and only after satisfying officials with reasons for not doing so earlier. In the modified circular on its website on Wednesday afternoon, the central bank said two sub-paragraphs of the original circular “will not apply to fully KYC compliant accounts.” This means there would be no restriction on cash deposits — neither on the amount, nor on the number of times money could be deposited. The latest notification is the 60th from the North Block-Mint Road combine in the past 43 days. The central bank faced a barrage of criticism on social media throughout the day, while many said they had trusted the prime minister and the finance minister, who had advised them to not extend queues outside banks and ATMs, as they ...

The Goods & Services Tax (GST) Council will meet on Thursday and Friday to take up drafts of the model GST, integrated GST and states' compensation Bills.   The aim will be to address the contentious issue of administrative turf  between Centre and  states.  Tax experts say this will be difficult. The Centre might push a cross-empowerment model of random choosing and division of five% of the assessees between Centre and the states, using a computer programme. The parameters on which the assessees could be chosen would be in-built in software written for this purpose.   However, states want sole control over assessees up to Rs 1.5 crore of annual turnover.   Naveen Wadhwa of Taxmann thinks a solution could be found outside the suggested models. He says states could have sole control over assessees up to Rs 1.5 crore of turnover if their supplies are intra-state; above that, the Centre should. If supplies are inter-state, the Centre should have control o...

Despite uncertainty over the goods and services tax (GST) roll-out, the information technology backbone GST Network (GSTN) has initiated the process to migrate over eight million taxpayers on its system. The enrolment drive kicked off last month with Puducherry and Sikkim, and covered 19 more states and Union territories, including Maharashtra, Goa, Chhattisgarh, Gujarat, Jharkhand and Madhya Pradesh. GSTN has worked out a timeline to switch all value added tax, excise duty and service tax payers to the GST network by March 20, 2017. The 15-day enrolment window for value-added tax payers in nine states, including Delhi, Punjab and Uttarakhand, is open till December 30. “It is good that GSTN is sticking to its timeline to migrate taxpayers to its network, as all procedures must be complete before the roll-out. In states covered so far, about 70 per cent of the traders must have already enrolled on the platform,” said Praveen Khandelwal, secretary general, the Confederation of All ...

With more instances of bank employees helping launder black money during the demonetisation drive surfacing, the finance ministry has sought a report from the Reserve Bank of India (RBI) on whether banks compromised on so-called know-your-customer norms, said two people directly familiar with the matter, including a finance ministry official. The ministry’s move was prompted by investigations by the income-tax department, the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) that prima facie established the involvement of some bank officials in such money laundering. “While the investigative agencies are doing their bit, we are seeking a report from the central bank on whether there is a systemic concern or case of few ‘bad apples’,” said the finance ministry official cited above, who asked not to be identified. Spokespersons for RBI and the finance ministry did not respond to emails seeking comment. In the past 20 days, as many as eight banks have be...

Employees’ Provident Fund Organisation (EPFO) has proposed an amnesty for employers who have failed to get workers to sign up for the tax-exempt employee’s provident fund (EPF) scheme that aims to bring more workers under the social security net. According to the ‘Enrolment and Establishment coverage campaign, 2017,’ proposed by EPFO at its apex body meeting in Bengaluru on Monday, employers can get workers signed up now with a nominal penalty of Re1 per year of delay. The penalty otherwise applicable is 5-25% of the shortfall in contribution, depending on the period of delay. The move gives an opportunity to all principal employers such as large state-run and private companies that hire contractors for specific projects to ensure that workers who are indirectly employed also get social security benefits. Any worker who should have joined the scheme between 1 April 2009 and the end of this year, is eligible to join EPF now during a three-month window starting 1 January 2017, sa...

The government is trying various ways to plug the loopholes so that the motive behind the demonetisation move is not defeated. One of its targets was bringing out unaccounted wealth. In this regard, different government departments are coming up with new circulars, notices and press releases regularly. In a recent notice, the Central Board of Direct Taxes (CBDT) stated its concern regarding filing of revised income tax returns by tax payers. CBDT stated in the notice that, “any instance coming to the notice of income-tax department, which reflects manipulation in the amount of income, cash-in-hand, profits, and fudging of accounts may necessitate scrutiny of such cases.” It can further lead to penalty or prosecution as well. So, if you are filing a revised tax return, here’s a look at which of the changes can attract scrutiny. Revising a return Once you file an income tax return, you are allowed to file a revised return under section 139(5) of the Income-tax Act, 1961. You ca...