CA Online

The Rajya Sabha on Thursday cleared four goods and services tax (GST) Bills. Now, the President´s consent and approval of the Assemblies are required for clearing all legislative hurdles, before the unified indirect tax regime is rolled out. Before passage of the Bills, Finance Minister Arun Jaitley sought to allay the Opposition´s apprehension over the requirement of multiple registrations for companies  and powers to arrest given to officials under the proposed GST rules. Even as states clear their Bills, the GST Council will take up fitment of items in five slabs of GST rates and the four pending rules at its meeting on May 18 and 19  in Jammu and Kashmir. The Bills passed by Parliament, however, do not come into effect in the states because of special Constitutional rights. The Lok Sabha also passed the Taxation Laws (Amendment) Bill, 2017, to ensure continuance of levy of excise on petroleum products and abolition of cess on some other  items following ...

The Reserve Bank of India (RBI) has decided to slash clearance time for National Electronic Funds Transfers (NEFT), in an  attempt to enhance efficiency of the electronic payments system and add to customer convenience. In line with the document on Vision 2018 for Payment and Settlement Systems, the NEFT settlement cycle will be reduced from  hourly batches to halfhourly batches, the RBI said in the first bimonthly monetary policy for 2017- 18. “Consequently, 11  additional settlement batches will be introduced at 8.30 am onwards, taking the total number of half hourly settlement  batches during the day to 23,” newlyappointed Deputy GovernorBPKanungo said. This will enhance the efficiency of the NEFT  system and add to customer convenience, he said. On promoting financial inclusion and literacy, it said the RBI is  initiatingapilot project on financial literacy at the block level to explore innovative and participatory approaches to  financial ...

The Reserve Bank of India (RBI)´smove to allow banks to invest in Real Estate Investment Trusts (REITs) and Infrastructure Investment Funds (InvITs) might not find  many takers, if experts are to be believed. Currently, banks can invest in instruments such as mutual fund schemes, venture capital funds and equities to the extent of 20 per cent of their net owned funds. This limit will now include REITs and InvITs. REITs and InvITs typically offer higher yields but carry higher risks as well. This is because money raised through these instruments is invested in projects in the real estate and infrastructure sectors, which can be impacted due to cyclicality. A bank which would have already lent to these companies can now also take an equity interest in these companies´ projects via REITs and InvITs. Analysts sayabank which has lent toareal estate developer, for instance, would typically know all the intricacies about the projects and may consider investing in  these...

The Reserve Bank of India (RBI) on Thursday said even though there had beenafew positives on the bad loans front, the current level of dud loan resolution was  untenable as there had been a deterioration in non performing assets (NPA), and promised new measures to tackle the pain. “The present level of NPA resolution is   untenable,” Governor Urjit Patel said while addressing the media after announcing the first bimonthly policy for financial year 201718. Deputy Governor S S Mundra, who heads the banking department, chipped in saying “we are yet to get the final result of Q4 which has just ended. But based on the figures that were available for the December quarter, the various indicators of the stressed assets have further deteriorated during this period.” He   said the positives achieved by the banks includeaslowdown in the accretion of fresh NPAs and stable provision coverage ratios. The former commercial banker cautioned that the current situation will put p...

Aimed at encouraging digital transactions, the Reserve Bank of India (RBI) said it would soon come out with final guidelines on merchant discount rate (MDR) charges on debit card payments. Pending the final guidelines, the existing norms for MDR charges would continue beyond March 31, RBI Governor Urjit Patel said while announcing the first bimonthly monetary policy for 2017- 18. According to the existing guidelines, MDR for debit card payments, including for payments made to the government, is capped at 0.25 per cent for transactions up to Rs 1,000 and 0.5 per cent for amounts between Rs 1,000 and Rs 2,000. The existing MDR cap is 0.75 per cent for transactions up to Rs 2,000 and one per cent for those over Rs 2,000. However, there is no RBI cap on MDR on credit card payments. RBI issued a draft circular on Rationalisation of Merchant Discount Rate (MDR) for Debit Card Transactions´ on February 16. “The extensive feedback received, including from the government, banks, ca...

Employees suffering injury in industrial accident will now get compensation of up to Rs 1 lakh, with Parliament on Wednesday clearing a Bill in this regard.The Employees Compensation (Amendment) Bill also hasaprovision for hefty penalty in case of any violation by the employers. 06TH APRIL,2017,BUSINESS STANDARD,NEW-DELHI

Expatriates who have stayed for at least 182 days in India a year before July 1, 2017, need to apply for Aadhaar if they are filing tax returns in the country.Else, they would have to file returns by June 30 this year.  The income tax (IT) department clarified that foreign nationals who stayed less than 182 days need not quote the Aadhaar number in their I-T returns.  According to the Aadhaar Act, 2016, those who have stayed in India for at least 182 days (almost six months) inayear preceding the date of application for Aadhaar are considered residents. The requirement of mandatorily quoting the Aadhaar number is effective from July 1. This means that those who have stayed in India for more than almost six months between June 30, 2016, and July 1, 2017, need to quote their Aadhaar number. Thus, those who were in India for at least 182 daysayear prior to July 2017 and are required to file income tax returns will need to get Aadhaar.If these expatriates have left India, they...

The share of financial products purchased online is low at present, but this is set to change with the introduction of centralised  and Aadhaar-based KYC Sample this: Life Insurance Corporation of India’s (LIC) e-Term policy’s annual premium is Rs 23,861. The same policy, called Jeevan Amulya, bought offline will cost Rs 38,640 a year. Clearly, there is a huge benefit if policies are bought online. But online sales account for only a small proportion of the total policies sold by insurance companies. In case of life insurance, online sales contributed only 0.22 per cent of new business premium in 2015-16 if both individual and group businesses are included, and 0.52 per cent for individual business only (source: IRDA’s annual report, 2015-16). In health insurance, online sales contributed  only two per cent of gross premium (source: Handbook of Indian Insurance Statistic, 2015-16). In case of mutual funds, a recent report from Karvy says that according to its data online s...

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%...