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The Securities and Exchange Board of India (Sebi) has proposed to ease the compliance burden on foreign portfolio investors (FPI) by reducing documentation and doing away with approvals for merger of schemes. In a consultation paper, Sebi has proposed to exempt FPIs, which have multiple investment managers, from taking its approval for free of cost transfers. Designated depository participants (DPPs) would clear such applications. Foreign funds will also not need approval to change their DPPs, which act as brokers and first-level regulators for FPIs. Further, Sebi proposes to do away with a majority of the conditions prescribed under the ‘fit & proper’ criteria for category-I and II investors. It says as these are well-regulated in their home jurisdiction, there is no need for additional paperwork. “Category I and II FPIs are essentially government and regulated entities,”explains the discussion paper. Sebi has also met a longstanding demand of category-II FPIs by tweaking the ...

With two days left for rollout of goods and services tax (GST), the finance ministry has started notifying various provisions of law relating to interest calculation, input tax credit and valuation. Provisions in the Central GST Act (CGST), Integrated GST (IGST) Act and Union Territory GST Act and rules under them are being notified.These include those relating to tax invoice, credit and debit notes, accounts and records, returns, payment of tax, refund, assessment and audit, advance ruling. Also, appeals and revisions, transitional provisions, anti-profiteering and eway rules have been notified which shall come into effect from July 1.According to the notification, interest at 18 per cent is to be paid for delayed payment of tax, 24 per cent in the case of excess claim of input credit or undue/excess reduction in output liability. Besides, interest at the rate of 6 per cent would accrue in case refund is with held. With regard to IGST, provision prescribing refund of 50 per cent o...

The Insurance Regulatory and Development Authority of India (Irdai) has deferred the implementation of Indian Accounting Standards (IndAS) by a period of two years and it will now be implemented by 2020-21. The board of authority, after its meeting on May 31, noted the peculiarities of the insurance sector, particularly the fact that India does not have a standard equivalent to IAS39 on Financial Instruments: Recognition and Measurement. They came to the conclusion that the implementation of the IndAS in the present form will lead to the valuation of assets at fair value or market value, however, liabilities will continue to be valued as per the existing formula based approach. Hence, a mismatch would occur in the asset and liability valuation causing volatility in the financial statements of the insurance companies. Furthermore, this will lead to counting of compliance cost twice. It will be counted for the first time on the implementation of IndAS and secondly, when IFRS 17 is im...

Individuals having permanent account number (PAN) will have to link it to their existing 12digit biometric Aadhaar number from July 1,a government notification said. Aadhaar number or Aadhaar enrolment ID will also have to be mandatorily quoted while applying for PAN, which is a must for filing tax returns, opening of bank accounts and financial transactions beyond a threshold. Finance Minister Arun Jaitley, through an amendment to tax proposals in the Finance Bill for 2017-18, had made Aadhaar mandatory for filing income tax returns (ITR) and provided for linking of PAN with Aadhaar to check tax evasion through the use of multiple PAN cards. The Supreme Court had earlier this month upheld the validity of an Income Tax Act provision making Aadhaar mandatory for allotment of PAN cards and ITR filing, but had putapartial stay on its implementation till a Constitution Bench addressed the issue of right to privacy. Following the Supreme Court ruling, the revenue department has notified...

cal year alone, leading to huge losses, and in some cases, it could trigger prompt corrective action (PCA) — where RBI restricts banking activities of banks when financials deteriorate substantially. Already six banks have been placed under PCA as they lost money for two straight years and bad loans crossed the 10% threshold. What worries bankers now is the nuisance that a minority creditor can create.For instance, an operational creditor with Rs 1 lakh overdue can knock the doors of NCLT the very next day of default. This means that even if an account is not classified as a non-performing loan, banks will have to set aside more money from their profits. In a way, it should not be surprising if large creditors take proactive steps to settle dues with some minority lenders. However, what will be difficult to manage is a situation where the corporate itself files for bankrutcy. Bankers beleive they may end up beling worse off than before due to provisions. As it has been the past, ba...

The Goods and Services Tax (GST) will be launched on July 1 and will subsume a host of indirect levies like excise, service tax and VAT. Finance Minister Arun Jaitley today said people may have to face some difficulty initially as the GST is rolled out but in the long run the new indirect tax regime would help cut tax evasion and check price rise. He also said the GST Council will look at bringing real estate within the GST net by next year and revisit taxing of petroleum products under the new regime in 1-2 years. "To begin with, people could face some difficulties because any change over has its own problems. But it will settle down and the country will benefit from the new indirect tax regime," Jaitley said at an event organised by ABP News. The Goods and Services Tax (GST) will be launched on July 1 and will subsume a host of indirect levies like excise, service tax and VAT.While products like kerosene, naphtha and LPG will be under the ambit of GST, five items - cr...

BSE 500 companies with high debt Switch to new standard may increase debts on books of infra & realty firms, leading banks to further trim loan exposure. The adoption of the new Indian Accounting Standards (IndAS) might compel banks to cut down on the quantum of loans they dole out to companies. IndAS will result in a change in the debt-to-equity ratios of companies as capital structures and financial instruments get reclassified, increasing debts and compelling banks to reassess the way they lend to companies, particularly in sectors such as power, infrastructure and real estate. “Banks and financial institutions will have to consider how IndAS has potentially changed the balance sheets of companies and relook at the way they review a loan application, test loan covenants and evaluate restructuring proposals,” said Ashish Gupta, director, Grant Thornton Advisory. According to Sai Venkateshwaran, partner and head-accounting advisory services at KPMG India, several companies in...

The Supreme Court on Tuesday refused to pass an interim order against the Centre’s notification making Aadhaar mandatory for availing of benefits under social welfare schemes, with the government assuring the court that no citizen would be deprived of such benefits for want of the unique identity number. The earlier deadline of June 30 has been extended till September 30 for those who want to apply for Aadhaar. The SC observed that no interim order could be passed merely on the “apprehension” raised by the petitioners that somebody might be deprived of benefits. The Supreme Court on Tuesday refused to pass an interim order against the Centre’s notification making Aadhaar mandatory for availing benefits under social welfare schemes, with the government assuring the court that no citizen would be deprived of such benefits for want of the unique identity number.The earlier deadline of June 30 has been extended till September 30 for those who want to apply for Aadhaar. The apex court o...

Sarvesh Kadiyan, a small-time textile manufacturer in the dusty industrial complex of Panipat, had an animated conversation with a chartered accountant (CA) last week. Kadiyan was looking for clarity on the goods and services tax (GST) set to roll out on July 1. The CA told the businessman to “wait till someone penalises you for non-payment of GST”. For a majority of the 1,500 odd manufacturing units in the area, finding the right guidance seems to be quite a task.“It was funny; my CA told me he does not know much. According to him, as the roll-out begins on July 1, a lot many people who are equally unaware would start getting fined by taxation authorities for non-compliance,’’ Kadiyan said. Once penalties are imposed, one would get clarity on what is allowed or not allowed in the new tax regime, he added. Panipat is the biggest centre for shoddy yarn in the world. Anything and everything related to textile is manufactured in this city, a base for the Rs 40,000-crore industry inclu...

GST Network, the company providing the technology backbone for the new indirect tax regime, on Tuesday said it had completed all software trials and testings necessary to successfully roll-out GST from July 1. Over 6.6 million tax payers had enrolled on the GSTN portal, Chairman Navin Kumar said.“GSTIT system has undergone all mandatory tests and has been opened for new registrations and enrolments on June 25. Business Standard New Delhi, 28th June 2017

Regulator takes pre-emptive action for 761 essential medicines The goods and services tax (GST) is unlikely to be a very bitter pill for the pharmaceutical industry, which feared a substantial rise in drug prices under the new indirect tax regime. While around 80 per cent drugs were put in the 12 per cent GST bracket (up from the current 9 per cent slab), implying a sharp rise in prices, the National Pharmaceutical Pricing Authority (NPPA) has stepped in to keep medicines affordable after the GST roll-out on July 1. The pharma pricing regulator has notified the revised ceiling prices of 761 drugs which are part of the Schedule 1 of the Drug Price Control Order (DPCO) 2013. According to the revised list issued by the NPPA, prices of most drugs have come down. With this regulatory move, the price increase after the GST roll-out would be marginal as the base price has been lowered. Even as price revision is a continuous process, the latest order may serve to cool the nerves of the pha...