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Tank full of issues in bringing petrol and diesel under GST state governments derive a lion’s share of revenues from sale of these fuels and bringing them under the GST ambit would mean a sharp  decline in revenue, which then will have to be compensated. Union petroleum minister Dharmendra Pradhan said last week that petroleum products should be included under the goods and services tax (GST). That should help consumers pay a rational price at a time w hen diesel and petrol prices are touching multi-year highs.This makes sense. Even if petrol and diesel are taxed at the highest GST slab of 28%, it would be lower than taxes already being paid and result in lower retail prices, helping consumers. Also, those industries which might be using them as inputs could claim input tax credit if these are bought under GST.Cast your eyes on Chart 1 below. CARE Ratings assumes that instead of an effective tax rate of 100% on petrol and 66% on diesel, GST of 90% and 80% are applied on pet...

Regulators may extend timings of currency derivatives trading Longer trading hours seen helping investors hedge their currency risks better and mitigate losses India’s market regulators are in talks to extend timings of currency derivatives trading, two people aware of the discussions said, a move expected to help investors hedge their currency risks better. Currency derivatives trading in India now starts at 9am, offering futures and options contracts in dollar-rupee, euro-rupee, pound-rupee, yen-rupee, T-Bills and interest rate futures, and closes at 5pm. Trading in cross-currency derivatives such as euro-dollar, pound-dollar and dollar-yen is open until 7.30pm. The Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) are in discussions to extend these timings to 9.30pm and 11.30pm respectively. “Longer trading hours should help clients better in hedging their risks arising from investments or transactions made in foreign currency denominations....

 E-way bill portal down for 2 hours  The e-way bill portal was down on Sunday night for close to two hours and then went slow, leading to disruptions in cargo carriage by road.  The portal blanked out at 9:30 pm and came back around 11 pm but was slow, said industry executives. E-way bill is a digital tracker of cargo transportion by road and an integral part of the goods and service tax compliance process.  The e-way bill was first implemented on February 1. The portal had crashed within a few hours then leading to a halt in billing.  The Economic Times, New Delhi, 09th April 2018

Bad loans menace: Over three dozen CAs under Reserve Bank lens  With the RBI cracking the whip on bad loans menace, more than three dozen chartered accountants are under the scanner for allegedly conniving with promoters in defaulting as well as restructuring the stressed assets, sources said.  At a time when more number of companies with stressed assets are coming under the Insolvency and Bankruptcy Code, the central bank is also looking at the role of various key personnel associated with such entities.  Sources said the Reserve Bank of India (RBI) is looking into the role of around 35 to 40 chartered accountants in loan defaults by various companies.  The regulator is looking to ascertain whether these chartered accountants helped the entities in any illegal manner causing deliberate defaults and subsequently assisting them in restructuring the dud assets, they added.  Responses to queries sent to the chartered accountants' apex ICAI on the issue were...

Black money SIT reviews use of cryptocurrencies; directs clampdown The RBI had come out with three specific warnings to discourage the public from investing in the virtual currencies The Special Investigation Team (SIT) on black money has asked probe agencies to check and curb the use of cryptocurrencies as it reviewed their operation and circulation in the country and links to shady offshore transactions. Officials said the SIT recently held a meeting in the national capital during which it was briefed about the overall scenario of the operations of this virtual currency in the country. The SIT, official sources said, called cryprocurrencies like bitcoins "illegal" and asked probe agencies such as the Income Tax Department, the Enforcement Directorate (ED) and the Narcotics Control Bureau (NCB) to detect and stop their usage and check transactions being done over the Internet, including those with cross-border ramifications. The panel, they said, would also prepare a...

CBI, Indian Revenue Services officers at loggerheads over fraud tax refunds The probe initiated by the Central Bureau of Investigation (CBI) into the fraudulent tax refunds case has not gone down well with the Indian Revenue Services (IRS) officers. In a resolution passed against the central agency, IRS officers called the allegation against the tax sleuths baseless and demoralising. In an unprecedented move, the income-tax sleuths, particularly those in Bengaluru, assembled last week to discuss the CBI’s first information report. The CBI FIR was registered against Income-tax officers at the Central Processing Cell (CPC) for processing revised returns based on fake documents and subsequently issuing huge refunds. Revenue officers believe the move has resulted in mistrust regarding integrity and transparency of processes and procedures at CPC. At the meeting which was called on April 3, after some of their colleagues were booked by CBI for causing losses to the exchequer, the re...

 RBI increases bond investment limit for foreign portfolio investors Net increase in government bonds will be Rs 592 billion in two years The Reserve Bank of India (RBI) on Friday increased the bond investment limit for foreign portfolio investors (FPI) by a percentage point in two phases — a move that will allow foreigners about Rs 1.4 trillion of extra play in Indian bonds by the end of FY20. “The limit for FPI investment in central government securities (G-secs) would be increased by 0.5 per cent to 5.5 per cent of outstanding stock of securities in 2018-19 and 6 per cent of outstanding stock of securities in 2019-20,” the RBI said. Net increase in government bonds will be Rs 592 billion in two years. Corporate bonds would see their limits go up by Rs 447.8 billion by the end of FY20. At the end of December, FPIs held about 4.5 per cent in outstanding government bonds, but that limit was to increase to 5 per cent by March. Now, the central bank has increased it by a full...

  Industry and tax experts seek one tax on capital gains in listed funds Consultants PwC India recommended levying either securities transaction tax (STT) or capital gains tax on listed securities, instead of levying both  Industry and tax experts have pitched for a single levy on capital gains of listed securities, besides a reduction in the equalisation levy and abolition of minimum alternate tax (MAT), to a high-level panel looking into the overhaul of the 60-year-old income tax law The government had set up a committee under Central Board of Direct Taxes (CBDT) member Arbind Modi to look into the income tax systems in various countries and global best practices, among others. The panel is drafting the New Direct Tax Legislation and is likely to submit its report by May 31. It is also expected to revisit the income tax slabs, while widening the tax base. Consultants PwC India recommended levying either securities transaction tax (STT) or capital gains tax on listed ...

  Sebi to take action against 14,720 entities for ‘non-genuine trades’ Sebi begins adjudication proceedings against 567 entities involved in ‘non-genuine trades’ through illiquid stock options segment in the first phase The Securities and Exchange Board of India (Sebi) has decided to take appropriate regulatory action against more than 14,700 entities in a phased manner for executing “non-genuine trades” through illiquid stock option segment. Adjudication proceedings have been initiated against 567 entities involved in such trades in the first phase. The markets regulator came across violations by 14,720 entities while it was probing 59 entities in a case related to alleged trading irregularities in stock options segment of the BSE. The 59 entities were probed to check whether they violated norms pertaining to fraudulent trade activities during the period from 1 April 2014 to 31 March 2015. Later, the scope of investigation was expanded to cover all the entities that had indu...

Don't deal with entities related to Bitcoins, RBI tells banks and NBFCs The RBI has repeatedly cautioned users, holders and traders of virtual currencies, including bitcoins The Reserve Bank of India (RBI) on Friday asked banks, non-banking financial companies (NBFCs) and payment service providers to disassociate themselves from entities dealing with virtual currencies, including bitcoins, with immediate effect. The notification comes a day after the central bank in a 'Statement on Developmental and Regulatory Policies' warned of risks associated with virtual currencies. The RBI has repeatedly cautioned users, holders and traders of virtual currencies, including bitcoins. The services flagged by the RBI include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, among others. In This Budget speech on February 1, Finance Minister Arun Jaitley had said cryptocurrencies were not legal and af...

Changes you need to know for I-T returns When you file your income tax (I-T) returns in July, you will have to fill details such as allowances that are not exempt, value of perks, and profits in lieu of salary in the new I-T return forms notified for the assessment year 2018-19. A one-page simplified ITR Form-1 (Sahaj) can be filed by an individual who is a resident having income up to Rs 50 lakh and who is receiving income from salary, one house property and other income (interest, etc), the I-T department said. The detailed break-up of salary was not part of ITR forms last year but has been added this year. Similar details have to provided for income from house property. Gender mention requirement has been removed from ITR-1. Non-resident individuals cannot use ITR-1 to file returns and will have to use ITR-2 or -3, depending on their nature of income in India. Tax experts said this could raise their compliance costs. The ITR-1 form is similar to the one for the previous assess...