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  Examine possibility of converting GSTN into govt-owned firm: FM to Adhia The move came after there were reports of leakages of data, including those allegedly by Facebook and Cambridge Analytica Ten months into the goods and services tax (GST), the Centre is looking at converting GST Network (GSTN), a company managing the IT infrastructure of the indirect tax system, into a government-owned company to protect the sensitive data of companies. Finance Minister Arun Jaitley has asked Finance Secretary Hasmukh Adhia to “examine the possibility” of converting GSTN into a company in which the government holds a majority stake, which can go up to 100 per cent. The move came after there were reports of leakages of data, including those allegedly by Facebook and Cambridge Analytica. After examination, the proposal may be sent to the GST Council. Currently, the Centre and the states hold 24.5 per cent each in GSTN. The rest is held by banks and financial institutions — LIC Housin...

Don't deny pension for want of Aadhaar: EPFO to banks The circular also said people who do not have Aadhaar should be encouraged to get it The Employees’ Provident Fund Organisation (EPFO) has asked banks to not deny monthly pension to people for want of Aadhaar cards or biometric authentication. Instead, they can use other documents such as life certificates. The April 9 circular from the EPFO said people should not be denied their pension if biometric identification — fingerprint or iris scans — fails. An entry mentioning the cause should be made in an exception register. The circular also said people who do not have Aadhaar should be encouraged to get it, and till they do so, a life certificate could be accepted as an alternative. “The register will contain the details of exceptions granted, along with the life certificate, the Aadhaar number or the Aadhaar enrolment number. This can be reviewed and audited periodically by senior management of the bank,” the circular sai...

Decoding ITR Form-1 (Sahaj) meant for salaried individuals The Central Board of Direct Taxes (CBDT) has notified the new income tax return forms (ITR) for assessment year (AY) 2018-19. While some amendments have been made in ITR Form -1 (Sahaj), ITR Form-2 has also been rationalised. ITR Form 1 (Sahaj) ITR Form -1 (Sahaj) is a one-page form that can be used by an individual with an income up to Rs50 lakh, with salary being the primary source of income, besides income from one house property and other income like interest from bank deposits. The form was first notified in the last AY 2017-18. While in the previous Sahaj form, only details of income from salary or pension along with income from one house property and other income were to be filled, the current Sahaj form asks for a break-up of income from each source. Income from salary: This head has been divided into five: In the first column, you need to provide the amount of salary received, excluding all allowances, perqui...

Clause in Aadhaar Act Badly Drafted, says Supreme Court Section 59 is badly drafted... It is very difficult for us to recognise that fundamental rights can be compromised or waived: CJI Dipak Misra  Should court not accept the deemed valid clause, all pre-Act Aadhaar would become suspect in the eyes of the law The Supreme Court on Tuesday faulted a clause in the Aadhaar Act, which validated all biometric enrolments even before the law was enacted with retrospective effect, as badly drafted and too wide in a prima facie observation. The Act came into effect only in 2016, though the government started enrolling people under its Aadhaar scheme in 2010. Should the court not accept the deemed valid clause, all pre-Act Aadhaar would become suspect in the eyes of the law. Section 59 of the Act deems consent in all pre-2016 cases where biometrics were collected without the backing of any law. “Section 59 is badly drafted,” observed Chief Justice of India Dipak Misra, who is heading...

Non-banking Cos Using UPI to Get a Payments Council Seat The Payments Council of India, the industry body for payments in the country, is in the process of forming a separate subcommittee for non-banking private players using Unified Payments Interface (UPI) for fund transfer. This comes amid steady growth of UPI-based transactions and mushrooming of private companies on the UPI platform in partnership with banks. In a closed-door meeting on Tuesday, companies such as PhonePe, Paytm, Amazon Pay, Google, WhatsApp, Hike and Truecaller, along with the National Payments Corporation of India (NPCI), discussed issues related to UPI. “The plan is to make private players also part of the decisionmaking processes around UPI which can help these companies manage the regulatory environment better,” said a senior executive of a payment company, who attended the meeting. The main challenge for the subcommittee, the executive said, would be to resolve operational issues which are currently p...

  SEBI Clarifies on Investment Limit for FPIs Owned by Foreign Govts Two or more foreign government-related entities from the same jurisdiction will be considered a single foreign portfolio investor (FPI) and will be eligible to invest up to 10% in a listed Indian company, market regulator Sebi said. “However, in cases where government of India enters into agreements or treaties with other sovereign governments and where such agreements or treaties specifically recognise certain entities to be distinct and separate, Sebi may, during the validity of such agreements or treaties, recognise them as such, subject to conditions as may be specified by it,” Sebi said in a clarification on Tuesday. The regulator said World Bank Group — IBRD, IDA, MIGA and IFC — have been exempted from clubbing of the investment limits for the purpose of application of 10% limit for FPI investments in a single listed firm. Sebi said various stakeholders had sought guidance on clubbing of investment lim...

SEBI strengthens algo trading rules; co-location services The market regulator directed all exchanges to provide "managed colocation services"The Securities and Exchange Board of India (Sebi) on Monday issued new measures to provide “fair and equitable access” to the colocation facilities offered by the bourses.The market regulator directed all exchanges to provide “managed colocation services”, under which small brokers get access to colocation services without having to rent the entire space or rack. Currently, the service is largely out of bounds for small traders due to high cost and lack of technical know-how. Going ahead, small brokers get access to the technical knowledge, hardware, software, and other associated expertise from third-party vendors. To increase transparency, Sebi directed all stock exchanges to publish minimum, maximum and mean latencies and latencies at 50th and 99th percentile. Latency is the time taken to complete the round trip from the core...

Rupee has Big Worrie: External debt at half-a-trillion dollars A chunk of it due next year, may put pressure on currency The Indian Rupee faces a new threat – soaring external debt. India’s external debt, the amount of money Indians have to repay in US dollars and other foreign currencies, have soared past the half-a-trillion dollar mark that may begin to worry investors about the strength of the local currency. That more than half the amount owed is coming up for repayment next year is a bigger cause of worry for investors and could lead to volatility in a market that is already getting whipsawed by the global trade wars and normalisation of interest rates in the developed world after a decade. At first the situation may not appear to be in a crisis state as it was in 2013 when the currency was pummelled, absence of corrective measures could see Indian financial markets witness wild swings.“The Indian rupee has clearly underperformed other EM currencies in 2018 so far and is d...

Imported Solar Equipment Won’t Attract Customs Duty Central Board of Indirect Taxes and Customs clarifies 2016 order, reclassifies panels and modules Much to the relief of solar project developers, the Central Board of Indirect Taxes and Customs (CBITC) has clarified that the bulk of imported solar panels and modules will not attract customs duty, putting to rest a controversy raging for more than six months. Around 90% of panels used in Indian solar projects are imported.In September 2016, the CBITC passed an order saying that since solar panels and modules generate power, they should be classified along with “electrical motors and generators” under the Customs Act (HS Code 8501), which attract 7.5% import duty, apart from various kinds of cess, amounting to a total of around 10%. The order’s implementation, however, began only in the middle of 2017. Till then, solar equipment had always been grouped with “diodes, transistors and similar semiconductor devices, photosensitive...

Govt begins move to increase stake in GST Network The demand that the state take control of GSTN is a long-pending one, and is also prompted by fears that sensitive GST data should not reside in private hands.The process of the government acquiring controlling stake in the Goods and Service Tax Network (GSTN) has been put in motion, government officials familiar with the matter said, asking not to  be identified. According to them, finance minister Arun Jaitley has approved the increase of the stake of the central government and the state governments in GSTN to at least 60% from the current 49%, to address fears that the ownership of a company that handles the IT infrastructure and systems related to the Goods and Services Tax, should reside with the state.Currently, 51% of the ownership of GSTN is with private financial institutions. The demand that the state take control of GSTN is a long-pending one, and is also prompted by fears that sensitive GST data should not reside...

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...