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Composition scheme under GST may return Only 1 mn entities opted for the scheme, meant for specific small businesses The composition scheme, which is applicable to specific categories of small businesses whose turnover is Rs 75 lakh and below and had been closed on August 16, may return soon. With just aboutamillion taxpayers opting for the scheme, the goods and services tax (GST) Council will consider reopening the window in its meeting on Saturday in Hyderabad, giving another opportunity to small players to avail of it. “Smaller players reportedly faced challenges with respect to registration. Some wanted more time to evaluate their business models to comply with the requirements of the composition scheme.So, we want to give them another chance,” saidasenior government official. The popularity of the scheme was increasing, when the scheme ended, with 9,80,000 entities registering for it by August 16, compared to just about 100,000 as of July 21, the earlier deadline. In other w...

Irdai approves new broking consultancy norms The Insurance Regulatory and Development Authority of India (Irdai) will soon allow insurance brokers to offer consultancy for claims not exceeding  Rs 10 crore without the need for regulatory approvals. For claims exceeding Rs10 crore, the brokers will have to seek prior approval from the regulator. The last Irdai board meeting held in August cleared changes to the Brokers Regulations, said Sanjay Kedia, president, Insurance Brokers Association of India, adding that a formal notification is expected to be out soon. For the past one decade, the association’s stand has been that policyholders should have a choice to decide their service provider with regard to claims. Kedia said the broker represented the policyholder, and not allowing a policyholder to access the services of a qualified licensed broker in a completely free manner was denying him/her the right to exercise claim settlement. The Business Standard, New Delhi, 07th Septem...

Startups, unlisted companies on black money radar, probe on 200 entities Startups and unlisted subsidiaries of some major Indian companies and multinationals find themselves in the crosshairs of the income tax department for raising funds through preference shares in excess of what it considers the fair market value. The investigation arm of the income tax department has sent notices to about 200 entities under Section 56(2)(vii)(b) of the Income Tax Act, 1961, in August, two people with direct knowledge of the matter told ET. Fair market value is assessed by the tax department based on past transactions and the record of similar, comparable companies. The Section is often applied when it’s suspected that companies may be issuing shares at a premium over the fair value for laundering unaccounted cash. “In cases where deals have been done at valuations higher than the fair value arrived at by tax authorities, queries have been raised,” said Abhishek Goenka, partner, corporate and in...

Govt sets in motion anti-profiteering mechanism Businesses not passing on the benefits of lower tax incidence under the goods and services tax may be in for trouble, with the government notifying the standing committee to receive complaints on profiteering. A four-member standing committee, comprising two officers each from the Centre and states, will examine the complaints and refer cases for investigation if they find merit. “If you have got any complaints, you can send it to the standing committee or state-level screening committee,” said Revenue Secretary Hasmukh Adhia at the Business Standard GST Round Table. The detailed procedure for approaching the committees will be announced soon, he added. Meanwhile, states are in the process of notifying the state-level screening committees, which will also include central government nominees. The anti-profiteering law is a deterrent mechanism under the GST that makes it mandatory for businesses to pass on the benefits arising out of lo...

Govt orders freezing of over 2L cos’ a/cs In a major clampdown against black money, the government on Tuesday directed freezing bank accounts of more than 2.09 lakh companies whose names have been struck off from the records and said action would be taken against more such firms. Banks have also been asked to step up their vigil against those companies that are non-compliant with various regulations and not carrying out business activities for long, a senior finance ministry official said as authorities continue their crackdown against shell entities. The official said banks have been directed to freeze the bank accounts of these deregistered companies. While warning that ac- tion would be taken against erring firms, the official said the efforts would help in enhancing corporate governance standards as well as clean up of the system that otherwise is prone to be misused. The names of over 2.09 lakh firms have been struck off from register of companies for failing to comply with re...

File GST returns on time and plan your vacation, says Adhia Revenue Secretary Hasmukh Adhia at the Business Standard GST Round Table 2017 in New Delhi on Wednesday The days of leniency may be numbered in the good and services tax (GST) regime. Cautioning industry against incomplete and late filing of the GST returns, Revenue Secretary Hasmukh Adhia on Wednesday said, “Right now, we are not touching you. But the tax authorities will find out, and then you will be subject to penalties.” In his keynote address at the Business Standard GST Round Table, Adhia asked an estimated 1.1 million entities with incomplete registrations to finish the process on the GST Network without waiting for another extension in the date for filing returns, so that they don’t come under the tax scanner and face penalty. Ruling out any further extension in the date for filing returns, the revenue secretary elaborated on the success of the biggest indirect tax reform. Around 74 per cent of the fully migrated, ...

Banks without Aadhaar centres to face Rs 20,000 fine The Unique Identification Authority of India (UIDAI) has given banks one more month to open Aadhaar enrolment centres inastipulated 10 per cent of branches. UIDAI will imposea Rs 20,000 fine per uncovered branch after September 30, chief executive officer Ajay Bhushan Pandey said. UIDAI, in July, had asked private and public banks to open Aadhaar enrolment and updation facility in one out of the every 10 branches by Augustend. The reprieve of one month has now been granted as many banks sought additional time from the authority for setting up such facility on their premises. The Business Standard, New Delhi, 06th September 2017

Exporters demand total exemption from GST Exporters have petitioned the government for an outright exemption on payment of goods and services tax, saying that the time it takes to get reimbursements under the current mechanism was causing a working capital crunch. According to industry claims, about Rs 1.85 lakh crore of working capital will get stuck annually due to the implementation GST. Several exporters said they are already facing a capital shortage and have begun to turn away orders. Prior to the implementation of GST on July 1, exporters were exempted from paying duties. Now, they have to pay the tax first and then seek a refund, a process that ties up a portion of their working capital and pushes up manufacturing costs as they have to pay duties on inputs. This has particularly hit small exporters, who work on meagre resources and for whom getting bank financing is tough. Moradabad-based brass handicraft manufacturer and exporter Paragon Metals has Rs 6 lakh of drawback bl...

Over 2 lakh companies' bank accounts frozen The Finance Ministry has imposed restrictions on the operation of bank accounts of more than 2 lakh companies which have been "struck off" from the Register of Companies.The bank accounts of these companies will remain frozen unless they are legally restored by the National Company Law Tribunal (NCLT). All banks have been asked to take immediate and appropriate action. The Finance Ministry's official statement These individuals will not be able to operate bank accounts till such companies are legally restored by an order of the NCLT.Struck-off companies failed to respond to show-cause notices Most of these companies have been removed from the RoC due to issues with filing of returns and other formalities related to compliance. This was done after notices had been served to 2.97 lakh companies which had failed to respond to show-cause notices sent earlier. The existing directors and authorized signatories of these compani...

House panel to meet on bankruptcy resolution Wednesday will see the first meeting of Parliament´s joint committee to study the government´s Bill to put in place a resolution framework to deal with bankruptcy situations at banks, insurance companies and entities such as nonbanking financial companies. The Financial Resolution and Deposit Insurance Bill was referred to the joint committee on August 10, during the monsoon session, and the panel was constituted on August 19. It has 20 members from the Lok Sabha and 10 from the Rajya Sabha. Bhupender Yadav, the latter´s member from the ruling Bharatiya Janata Party, heads it.The report is supposed to come in the winter session of Parliament. This, with the Insolvency and Bankruptcy Code enacted last year, is aimed to provide a comprehensive resolution mechanism. It is to put in place the process for designation of systemically important financial institutions, establishment of a Resolution Corporation for protection of consumers of spec...

GST takes the sheen off services in August, too Introduction of the nationwide goods and services tax (GST) continued to be a drag on activity in the services sector in August, for a second month, with companies having to handle higher input prices and slow demand. The widely tracked Nikkei Purchasing Managers´ Index (PMI) showed a reading for the services sector of 47.5 in August.The 50 point mark separates expansion from contraction. However, the decline was softer than in the previous month of July, when the PMI had plunged toanearly fouryear low of 45.9. Last week, the latest gross domestic product (GDP) data showed a three year plunge in economic growth at 5.7 per cent in the first quarter of the current financial year. While PMI data for manufacturing rebounded in August, rising to 51.2 points from 47.9 in July, services´ providers continued to grapple with a slow down in new businesses.The entities surveyed blame this on sub dued demand and rising competitive pressures emana...