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Tax Breather for Ecomm Cos for 3 More Months Rollout of tax collection at source was deferred to July 1; implementation after systems fully ready India proposes to defer the implementation of tax collection at source (TCS), a move that will give a breather to Amazon, Flipkart and other ecommerce service providers. “It has been decided to defer it for three months,” said a senior government official aware of the development. Online platforms have to collect the tax from those selling goods on their sites while making payments for goods sold. The tax, designed as a measure to improve compliance by helping to track such transactions, was to come into effect on July 1. Ecommerce platforms, which have multiple sellers with small turnovers, have been wary of the provision, fearing an increase in the compliance burden. Their lobbying had already led to the tax being deferred by a year, just days before the goods and services tax (GST) rollout on July 1 last year. Exper...

EPFO Nod Likely Soon for Minimum Rs. 2k EPS Pension Move to hike allowance to benefit 40 lakh subscribers and cost Centre at least  Rs.  3,000 crore a year The Employees’ Provident Fund Organisation (EPFO) is expected to soon give its go-ahead to the proposal of doubling monthly pension for EPS subscribers to  Rs. 2,000.  This would benefit at least 40 lakh subscribers and cost the Centre a minimum  Rs.  3,000 crore per annum.  The issue, though not listed on the agenda for the upcoming central board of trustees’ meeting of EPFO on June 26, is likely to be tabled after permission from the labour minister, who is the chairman of the board. The Union Cabinet had in 2014 approved a minimum pension of  Rs.  1,000 a month for a year and later extended it till perpetuity in 2015. The differential cost of  Rs.  813 crore per annum to pay the minimum pension is borne by the Centre and going forward this could more than double if the...

Political shadow on GST Council decisions as election season takes over Reaching a consensus might get tougher, as already seen with issues like inclusion of natural gas in GST and imposition of a sugar cess, both central proposals being resisted A year after the levy’s rollout, decision making on the goods and services tax (GST) could get overshadowed by politics as the election season takes over.  Already, the frequency of meetings has come down from an average of over two a month till May to one in a gap of two and a half months. In fact, the meeting in early May was held through video conferencing. The next one is now slated for July 19.  Reaching a consensus might also get tougher, as already seen with issues like inclusion of natural gas in GST and imposition of a sugar cess, both central proposals being resisted.  While the Centre has argued for natural gas’ inclusion, this is being opposed by Andhra Pradesh. The Centre’s proposal for a sugar cess to compen...

  GST fails its biggest promise - formalisation of economy The report, however, noted that over the long-term, GST will lead to more formalisation of the economy A year into implementation, goods and services tax (GST) has not delivered on the promised formalisation of the economy as yet, while the glitches in the one-nation-one-tax regime has increased the demand for cash, says a foreign brokerage report. "The GST regime was originally associated with formality. But so far, in our view, it has not been able to live up to that promise. nor has it brought down the demand for cash which has in fact only gone up," British brokerage HSBC said in a report today. The report, however, noted that over the long-term, GST will lead to more formalisation of the economy. The GST was implemented from July 1, 2017 and since then it has undergone multiple changes including lowering of tax rates of many items and an increase in the numbers of cesses and the levy rate, which was suppo...

  PM pitches for double-digit GDP growth, raising India's share in world trade Prime Minister Narendra Modi today called for targeting double-digit GDP growth for breaking into the USD 5 trillion economy club and said India's share in world trade has to more than double to 3.4 per cent. Speaking after laying the foundation stone of Vanijya Bhawan, a new office complex of the Ministry of Commerce here, he said his government has in four years taken steps to ease the process of doing business in India while maintaining macroeconomic indicators like inflation, current account deficit (CAD) and fiscal deficit within limits. After scaling these positive macroeconomic indicators, what next, the Prime Minister asked. He said GDP growth touched 7.7 per cent in the last quarter of 2017-18 fiscal but now the time has come to look beyond 7-8 per cent growth and target double-digit expansion. "The need of the hour is that we should work towards achieving the target of double d...

After near three-year probe, Sebi action in NSE colo case in a 'few days' The exchange, its officials, brokers could face enforcement action The Securities and Exchange Board of India (Sebi) will soon initiate enforcement action against country's largest stock exchange the National Stock Exchange  (NSE) and various other entities involved in an infamous co-location (colo) controversy.  The market regulator has been probing the case since early 2015 following multiple complaints that some brokers got preferential access at the exchange’s colo  servers. “We have received investigation reports from the forensic auditors and also from the internal team. We have taken into consideration their recommendations and  will be initiating enforcement action on institution and individuals in the coming few days,” said Sebi chairman Ajay Tyagi, while briefing the press on  Thursday.  Tyagi further said that the issue was complex and have taken almost one year to ...

NSE to introduce corporate governance code stricter than existing laws The exchange is in the process of creating incentives for listed corporates that adhere to these norms, which will be voluntary The National Stock Exchange (NSE) is in the process of introducing a corporate governance code that will be stricter than the existing laws and regulations.  Vikram Limaye, MD & CEO, NSE said the exchange is in the process of creating incentives for listed corporates that adhere to these norms, which will be  voluntary. He was speaking at the NSE-IGIDR conference on corproate governance.  ‘’Companies are expected to sign up for these norms in exchange for improved visibility, higher liquidity and better quality investors. This initiative has  been inspired by ‘Novo Mercado’ in Brazil, which has been highly successful. If introduced, it would be the first time in India that corporate governance would  be driven by incentives rather than mandate,’’ said Lim...

Feb 12 circular gives space for NPA resolution, RBI tells Finance ministry The RBI made its stand clear at a stakeholders' meeting, called by the ministry to discuss the circular, the implementation of which was stayed for the power  sector by Allahabad High Court. The Reserve Bank on Thursday indicated to the finance ministry that its February 12 circular on new framework for stressed assets provides enough space for  resolution of bad loans in the power sector, according to a senior official.  The RBI made its stand clear at a stakeholders' meeting, called by the ministry to discuss the circular, the implementation of which was stayed for the power  sector by Allahabad High Court. The next hearing is on July 10.  During the meeting, a broad consensus emerged on setting up of a task force of eminent experts to analyse issues related to the sector including fuel supplies,  power purchase agreements and delays in payment by discoms. “RBI maintains th...

IBC process to push consolidation in steel industry, says EY The Insolvency and Bankruptcy Code (IBC) will accelerate consolidation in steel industry and help many global players who have been struggling to enter India,  EY said on Thursday. Many of the cases referred to the National Company Law Tribunal (NCLT), under the IBC process, are from the steel sector, said Anjani Agarwal, EY Partner and  Global Steel Leader.  "What will be the likely impact of that for the industry. That's the area of very interesting transformational subject and the whole landscape is suppose to  change," he said.  He was speaking during India Minerals and Metals Forum here.  The IBC process being on a fast track resolution mechanism, a substantial part of the debt will be quickly realised or renewed and moved to a more sustainable  cash flow structures, Agarwal said. "The intense competition amongst bidders also bodes well for potential write backs of the provisions...

India slaps tariffs on 29 US items; new rates to kick in from August 4 The latest list of tariff hikes has 18 iron and steel items, a potent political reply against Trump's tariff hikes in the sector.  After a week of speculations, India on Thursday finally imposed higher tariff rates on 29 import items from the United States (US) but announced that new rates  would kick in from August 4.  India had last week notified the World Trade Organization (WTO) of its decision to impose ‘reciprocal tariffs’ on American products. The move comes after New  Delhi got a cold shoulder from Washington DC on its request for exempting India from the higher tariffs announced by the US on steel and aluminium imports.  The government has not officially clarified why it chose to impose the new rates — which have been doubled for some items — from a later date instead of June  21, as had been widely expected. But senior officials in the commerce department suggested that i...

Anti-profiteering body questions FMCG, pharma firms on GST prices  The National Anti-profiteering Authority (NAA) is questioning tax heads and CFOs of about 150 consumer goods and pharma companies to find out if their stocks  with the distributors and stockists on June 30, 2017 were sold at reduced rates after GST rollout.  What happened to the stock held by consumer and pharma companies which was with the distributors and stockists on June 30, 2017? What price was charged to  consumers when these products were sold to customers?  These are some of the questions the NAA sleuths have been seeking answers to.  While many companies did announce a price cut after the GST was rolled out, that applied only to new stocks or those manufactured after July 1, 2017.  NAA had issued letters to the companies including Nirma, HUL, P&G, Lupin and Sun Pharma in the last two weeks.  Company executives were also quizzed about measures they took to ensure ...