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SEBI panel proposes stricter norms for RTAs A Sebi panel felt that since RTAs manage sensitive investor-related data, there need to be stricter governance rules for the A Securities and Exchange Board of India (Sebi) panel on Friday proposed tighter ownership and governance norms for registrar and transfer agents (RTAs).According to a discussion paper released by Sebi, the panel, headed by former Reserve Bank of India (RBI) deputy governor R. Gandhi, felt that since RTAs manage sensitive investor-related data, there need to be stricter governance rules for them. RTAs maintain detailed records of all investor transactions in mutual funds and shares. They also help investors complete their transactions and receive a record of their account statements.This is the second discussion paper by the panel after some market participants suggested it should add credit rating agencies (CRAs), RTAs and debenture trustees (DTs) in the list of market infrastructure institutions (MIIs) and fra...

India’s initial GDP estimates often underestimate actual growth Advance estimates of GDP are poor at capturing significant turns in the econo my and should incorporate other indicators of economic activity The accuracy of India’s official GDP statistics could imp rove if they make use of high frequency indicators such as vehicle sales, air passenger traffic and foreign tourist arrivals, according to a new study by Anupam Prakash and others from RBI’s Department of Economic and Policy Research. Their analysis found that the initial estimates of gross domestic product (GDP) or gross value added (GVA) often underestimate actual growth. Consequently, subsequent estimates mostly result in upward revisions, as they benefit from more comprehensive data. Also, the initial estimates are poor at capturing significant turns in the economy. For instance, initial estimates had underestimated growth in 2005-06, a good year, while they had overestimated growth in the year of the global financia...

GST Council to take up 5% sugar cess to compensate cane farmers Meanwhile, many states are opposed to the idea of a separate cess under the GST as it goes against the principle of the uniform indirect tax The GST Council will at its meeting on Friday consider a proposal to impose a sugar cess to compensate cane farmers. The proposal by the ministry of consumer affairs, food and public distribution for a 5 per cent sugar cess will be outside the purview of the compensation cess under the goods and services tax, and hence will need a separate law. “The sugar cess proposal will be taken up by the council. It will be a different cess from the compensation cess and will need a separate act of Parliament or by way of a provision in the Finance Act,” said a government official. The government may choose to go ahead with this by way of an ordinance, he added. Currently, only the compensation cess is within the purview of the GST law, and is levied on a handful of luxury and demerit i...

GST Council to take a call on converting GSTN into a govt-owned company 'Hiring and firing' was faster since it was a private company says GSTN CEO Prakash Kumar Amid data security concerns, the GST Council will take a call on converting GST Network (GSTN), the IT backbone of the indirect tax system, into a government-owned company during its meeting on Friday. However, irrespective of government ownership, manpower-related flexibility was likely to be provided through a built-in human resource policy, officials said. GSTN CEO Prakash Kumar had told Business Standard earlier that “hiring and firing” was faster since it was a private company and the private sector salary structure helped it hire the right kind of people The Business Standard, New Delhi, 04th May 2018

RBI asks listed firms to provide FPI data to depositories by May 15 Currently, the RBI receives data on investment made by foreign portfolio investors (FPIs) and non-resident Indians (NRIs) on stock exchanges from banks, based on which restrictions beyond a threshold limit is imposed on such investments in listed Indian companies The Reserve Bank today asked all listed companies to provide information on FPI investments to depositories before May 15 or else they will be barred from receiving foreign investments. Currently, the RBI receives data on investment made by foreign portfolio investors (FPIs) and non-resident Indians (NRIs) on stock exchanges from banks, based on which restrictions beyond a threshold limit is imposed on such investments in listed Indian companies. In order to enable listed companies to ensure compliance with various foreign investment limits, the RBI in consultation with market regulator SEBI has decided to put in place a new system for monitoring forei...

 Firms to challenge input tax credit notices, revenue department's stand According to Cenvat rules, companies have to reverse input tax credit on exempted turnover arising out of non-core businesses Some of the companies that have received notices to reverse input tax credit in service tax are planning to challenge the revenue department's stand at the commissioner level. According to them, they should not be served the notices as they have not given any services by investing in securities and mutual funds. The notice, if upheld, could have repercussions for the Goods and Services Tax (GST) regime as well as similar provisions exist in the new indirect tax regime as well. The companies have not been trading in stocks but investing in stocks and as such not providing any services, said Abhishek Rastogi, partner with Khaitan & Co. Experts said, services are provided by mutual funds, or brokers or investment advisers and not these firms. They are, in fact, recipient of...

RBI asks banks, firms to divulge more data on forex The Reserve Bank of India (RBI) on Thursday told banks to share data with the Directorate of Revenue Intelligence. The directive was in compliance with a notification by the Customs department on december 14, 2017 that said  banks must share all data regarding forex transactions of any individual. The RBI said banks should start following it with immediatie effect. The RBI also said a new format wil be released to motion foreign investments in listed indian firms.    The Business Standard, New Delhi, 04th May 2018

From bank info to e-way bills, govt eyes more data to curb tax evasion New Delhi: The Union government has signalled its intent to tighten scrutiny of businesses. For this, it is proposing to mine all data points, not just limited to direct and indirect taxes, but extending to transaction information collated from banks, details disclosed to the ministry of corporate affairs and the shops and establishment department of states and data collected from e-way bills. All of this will be part of the fraud analytics infrastructure the government is creating for indirect taxes. It will entail building a risk profile of the taxpayer using information such as sales, purchases, links with suspect firms and dealings in sensitive commodities under the goods and services tax (GST). The government is hoping that fraud analytics of the massive amount of information collected from various sources will help in plugging revenue leakages under GST by identifying methods employed by taxp...

 In non-payment of taxes, the authorities will follow it up with the seller, based on the liability generated from the invoice upload In a relief for businesses, the Goods and Services Tax Council is to simplify filing of returns at a meeting on Friday, through a ‘hybrid model’ recommended by a panel led by Bihar deputy chief minister Sushil Modi. The proposed model is a fusion between the recommendation by Infosys Chairman Nandan Nilekani and the ‘provisional credit model’ suggested by government officers. A buyer will get input tax credit based on the seller's uploading of invoices, including missing ones. This would be irrespective of whether seller has actually paid the tax. “The Council will discuss (this). It is expected to get acceptance,” said an official.In the provisional credit model, the buyer would provisionally get input tax credit once he uploaded the missing invoices. This was to get reversed in three months if the seller had not uploaded the invoices and pa...

The revenue department will focus on quarterly average of GST revenues for better analysis of revenue trend, an official said.   While the Goods and Services Tax (GST) collections in April- the first month of the current fiscal - came in at Rs 1.03 trillion, the average monthly collection last fiscal from August-March was Rs 898.85 billion "The department will look at quarterly revenue trends to better gauge the revenue trend. The aim is to increase the average revenue collection from what we achieved last fiscal," a senior official said. From 2018-19 fiscal, the government has shifted to a cash basis of accounting where revenues accrued at the completion of a month would be taken on record immediately at the end of the month. Accordingly, the Rs 1.03 trillion GST collected in April reflects the Central GST and State GST which accrued in March. While releasing the April tax collection data on Tuesday, the Finance Ministry had said that in March which is ...

 RBI policy relatively insulated from global monetary policy: Staff paper Monetary policy in India is largely independent of spillovers from unconventional global monetary policy, says a paper from Reserve Bank of India (RBI) staff. “Heightened sensitivity of foreign exchange and equity markets to global spillovers notwithstanding, there is no strong evidence of domestic monetary policy losing traction because of global spillovers,” said the paper. It is authored by Michael Patra, Sitikantha Pattanaik, Joice John and Harendra Behera. Patra is an executive director at RBI and member of the six-member Monetary Policy Committee. He has advised rate hikes several times against the other members voting for a pause, or even a cut. The other three are advisors to the monetary policy department. “Monetary policy transmission through the money and credit markets is unaffected by global spillovers. In the debt market, however, transmission is impacted, producing occasional overshoo...