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Govt says no question of closing any PSB Dismissing rumours, both the government and the Reserve Bank said on Friday there was no question of closing any public sector bank (PSB). The decision of the Reserve Bank to initiateaPrompt Corrective Action (PCA) against large stateowned Bank of India led to rumours that the government may close down some banks.The RBI said it has come across some "misinformed communication" in some section of media, including social media, about closure of some PSBs in the wake of their being placed under the PCA. The government, too, dismissed the rumours, saying on the contrary, it is planning to strengthen stateowned banks."The government is strengthening PSBs by Rs 2.11 lakhcrore recapitalisation plan.Do not believe rumour mongers.Recap, Reforms road map for PSBs firmly on track," said financial services Secretary Rajeev Kumar inatweet. The RBI said, "the PCA framework is not intended to constrain normal operations of th...

Agency banks must be prompt with govt instructions: RBI  The Reserve Bank of India has asked agency banks, banking entities engaged in government business, to promptly execute instructions from central and state governments.They should not wait for RBI directives.“It has been brought to the government´s notice that some agency banks are not adhering to instructions/notifications issued by the government promptly. Banks have often say they have not received further communication from RBI.” it noted.Senior bank executives said beside tax related work, banks are also involved in managing assignment like payments for various programmes.The governments are concerned about implementing programmes in an efficient and timebound manner. Hence, they are looking for prompt response and cooperation from the banks to ensure an ease in execution.Banks should directly approach concerned governments for queries related to such instructions.They can reach out to RBI only for the queries are...

Better rated firms moving to bond mkt, says RBI report Better rated companies are moving to the bond market, even as bank loans continue to remain an efficient financing tool for lower rated firms, the Reserve Bank of India’s financial stability report said. Better rated companies can easily tap the bond market, and their borrowing costs are usually nearer the risk-free rate of sovereign treasury bills, rather than banks’ marginal cost of funds-based lending rate (MCLR). And, there is a significant differential, about 185 basis points between risk-free rates and the bank MCLR. One basis point is a hundredth of a percentage point If the risk-free rate (govt securities) is 6.57 per cent for five-year money, AAA-rated companies, on an average, raise their fund at 7.39 per cent from the market. The bank MCLR is 8.41 per cent for the tenure If a company with A rating has to raise funds from the market, the coupon it has to pay would be 10.2 per cent, according to the RBI. This sho...

HC notice to govt on double taxation The Delhi High Court has issued notices to the Union government, the GST Council and the Central Board of Excise and Customs (CBEC) over the issue of double taxation on imported goods sold from one Customsbonded warehouse to another. The matter would come up for hearing on March 8.Abhishek ARastogi of Khatian &Co said the issue relates toaCustoms circular that has raised fears of the government imposing integrated goods and services tax (GST) twice on these kinds of transaction. Also, the company paying the taxes will not be able to get input tax credit, he said.Suppose a company imports goods and keeps it in its Customs bonded warehouse.It then sells it to another company which keeps the goods in its own bonded warehouse.The second company will have to pay integrated GST (IGST) twice and Customs duty. Also since the first company has not paid duties, the second one will not get the credit.Petitioner Aditya Mody of Devashish Polymers said, “...

Tax department amends rules on addresses The Central Board of Direct Taxes (CBDT) has issued a notification to track taxpayers, who are not reachable on address available with tax officers through the PAN database. By this notification, CBDT has amended the relevant income tax rules and now the tax authorities can send notices to such taxpayers at any address which is mentioned and available elsewhere such as banks, post offices, insurance companies, other wings of the income tax department, any other government authority or local authority. Shailesh Kumar of Nangia &Co said the new rule will not only help the government reach taxpayers, who willfully try to avoid notices, but will also help those honest taxpayers, who inadvertently miss getting their new address updated in income tax records. The Business Standard, New Delhi, 23rd December 2017

Government introduces bill on GST compensation cess in Lok Sabha The government today introduced a bill in the Lok Sabha that would replace an ordinance wherein tax rates on various motor vehicles were hiked to a maximum of 25 per cent under the Goods and Services Tax (GST). Finance Minister Arun Jaitley introduced the GST (Compensation to States) Amendment Bill, 2017.An ordinance to hike the GST cess on a range of cars from mid-size to hybrid variants to luxury ones to 25 per cent was issued in September. The bill would replace the ordinance. Explaining the details, Jaitley in the bill's Statement of Objects and Reasons said the GST Council meeting on August 5 had recommended a 10 per cent increase in the maximum rate at which compensation cess can be collected on certain motor vehicles.The tax rate was to increase to 25 per cent from 15 per cent. In this regard, the maximum rates were to be increased immediately by amending the GST (Compensation to States) Act, 2017 bef...

Govt may allow 100% FDI in telecom via automatic route The government is finalising a plan to allow 100 per cent FDI for telecom services through the automatic route which allows firms to attract foreign funds without its approval, sources said today. The proposal is likely to be considered by the Telecom Commission, the apex decision making body of the Department of Telecom, at its meeting scheduled for tomorrow, they said."The TC is likely to consider raising of FDI limit up to 100 per cent for all telecom services including infrastructure through automatic route," a source said. At present 100 per cent FDI is allowed, of which up to 49 per cent investment in a company can be done through the automatic route. The inflow of overseas investment beyond that requires government approval because of security reasons.The panel is also likely to discuss the relief package recommended by an inter-ministerial group (IMG) for the telecom sector which is reeling under debt of a...

More changes to bankruptcy code likely in Budget The government will fix a few urgent problem areas in the insolvency ordinance when it is brought to Parliament in the ongoing session but is likely to make substantive changes to the law in the upcoming budget after the panel looking into the Insolvency and Bankruptcy Code (IBC) makes its recommendations. The government had last month issued an ordinance to list eligibility condition for those participating in the resolution process of insolvent companies, barring promoters of such companies from bidding for the company or its assets. The government has also set up a committee to identify areas that need to be addressed after seeing the working of the insolvency code for about a year. "Some of these changes could be brought in as part of the finance bill," a top government official told ET. As ET had reported earlier, there are two changes that the government may introduce to the law in the ongoing winter session. Th...

Full I-T e-assessment from next year; CBDT forms committee The government is set to roll out a pan-India "faceless and nameless" e-assessment procedure for income tax payers from 2018 with the CBDT today constituting a high-level committee to prepare a quick roadmap for the implementation of this ambitious proposal. The Central Board of Direct Taxes (CBDT), the policy- making body for the Income Tax Department, notified a nine- member committee--headed by a Principal Chief Commissioner rank officer -- and has set for it a deadline of February 28, 2018, for submitting its report. "The deadline of February end to the committee is an indication that the government and the CBDT want to usher in this new regime from the first half of the new year," a senior tax officer privy to the development said.The committee is being constituted as the "department is embarking upon the concept of a faceless and nameless e- assessment procedure", the CBDT order, issu...

Cabinet approves Consumer Protection Bill Focused on faster redressal of consumer grievances and to ensure stringent action against unfair trade practices, the Cabinet approved the introduction of the Consumer Protection Bill, 2017, to amend the Consumer Protection Act, 1986, sources said. The Bill seeks to enlarge the scope of the existing Act and proposes stricter actions against misleading advertisements and food adulteration. The amended Act will provide for the setting up of a Central Consumer Protection Authority, which will make way for faster redressal of consumer complaints. It will also take up class-action cases, raised by a group of consumers with the same set of complaints. "Consumer empowerment is one of the main components of the new Act. Misleading ads will be tackled even more strictly," minister of food, consumer affairs and public distribution Ram Vilas Paswan had said in October. The new law will also provide for proper definition and scope for e...

Rajya Sabha passes Compnaies Bill,2017 The Companies Amendment Bill seeks to strengthen corporate governance, initiate action against defaulting firms and improve ease of doing business. The Companies (Amendment) Bill, 2017 which seeks to bring about major changes in the Companies Act, 2013, was passed by the Rajya Sabha on Tuesday by a voice vote.The bill, which was adopted by the Lok Sabha in July, will now have to receive the assent of the President to become law. The amendment seeks to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business in the country. The Companies Act, 2013 has already been amended once under the current government. It was passed after much debate in the winter session of the Parliament as members raised concerns about independent directors being allowed up to 10% pecuniary interest in a company.Explaining the changes one could expect, Ankit Singhi, partner at consulting fi...