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Banks to bear extra cost due to 18% GST on priority lending certificate Banks have to give 40% of net lending to priority sector such as agriculture, micro enterprises, weaker sections, etc A recent circular by the indirect tax department to impose 18 per cent goods and services tax (GST) for certificates issued on excess priority sector lending by banks would increase lenders’ cost, as these are not eligible for full input tax credit. The Central Board of Excise and Customs (CBEC) recently clarified that Priority Sector Lending Certificates (PSLCs) would not be treated as securities but as goods. Hence, would draw an 18 per cent tax. PSLCs are a tool for promoting priority sector lending obligations. Banks have to give 40 per cent of net lending to priority sector such as agriculture, micro enterprises, weaker sections, etc. If a bank gives an excessive amount of priority lending, it will earn these certificates. Banks falling short of the target would be required to buy these...

Rent on electricity meter comes under GST, move may draw criticism The department also clarifed that retreading of tyres is a service, against the popular notion that it is both goods and servicesIndirect tax department has clarified that rent on electricity meter draws goods and service tax (GST), a development which is likely to draw criticism from the industry. The Central Board of Excise and Customs (CBEC) said even though electricity is exempted from GST, rent on electricity meter is not. Pratik Jain, partner PwC, said there was a contrary circular under the service tax laws. “Industry is likely to pitch in for an exemption on these ancillary charges else consumers will have to bear the additional burden,” he said. He said industry view is that it should not be taxable and should be treated as an incidental to transmission and distribution of electricity. Besides, GST will also be imposed on application fee for releasing connection of electricity; testing fee formeters, tr...

India To Retain Its Position As Fastest Growing Economy In Coming Decades: Arun Jaitley Finance Minister Arun Jaitley today exhorted confidence that India will retain its position of fastest growing economy in the coming decades like China did in the last three decades."The way the situation in the world is changing there is a great opportunity that has come in the way of India. The world keep facing its challenges and (in) the last  few years India has started leaving its footprints behind. "And when India is leaving its footprints behind, becoming one of the faster economies in the world, it obviously means that the opportunity for India and Indians is going to increase," Mr Jaitley said while addressing the 17th convocation of University of Jammu.The university conferred 185 degrees to candidates, who have qualified for the award of doctor of philosophy in 2015-16 up to December 31, 2016, besides 59 students were awarded gold medals, cash awards and certificates...

RBI gets tough on MNC banks on priority sector lending The RBI move, directed at foreign banks with over 20 branches will impact the likes of Standard Chartered, Citi and HSBC and will come into force from the next financial yearThe Reserve Bank of India (RBI) has further tightened the priority sector lending (PSL) norms for foreign banks by directing them to mandatorily create sub-targets so that they lend a portion of their loans to small and marginal farmers as well as micro enterprises from April. The move, directed at foreign banks with over 20 branches will impact the likes of Standard Chartered, Citi and HSBC, which much higher branch presence, and will come into force from the next financial year. The PSL norms mandate foreign banks to eventually lend 40% of their total loan book to the priority sector, such as agriculture, rural infra, and medium, small and micro enterprises (MSMEs) among others from April 2020.In a notification over the weekend, RBI has said a sub-tar...

RBI to bring interoperability for e-wallets within the promised time frame The Reserve Bank of India (RBI) is likely to stick to its target of making digital wallets interoperable by April despite allowing payment companies two additional months to comply with its customer verification requirement, said two bankers aware of the matter RBI extended its deadline to February for digital wallet providers to meet its full know-your-customer (KYC) norms, which it deems as necessary to eliminate any potential for misuse before allowing people holding different wallets to transact.“Though there are a few details that need to be worked out, the initial timeline promised by RBI should remain the same,” one of the bankers said on condition of anonymity as the matter is still under the purview of RBI. “We could see the regulator clearing wallet interoperability in the coming weeks ”As per RBI’s master direction released in October, digital wallets were to become interoperable within six mo...

Sensex falls 162 pts as PSU banks rebound Markets dropped for the second day on Wednesday as inflation worry resurfaced following comment of the new US Federal Reserve chairman Jerome Powell. The 30-share Sensex tanked 162.35 points, or 0.47%, to close at 34184.04, while the broader Nifty fell 61.45 points, or 0.58% to close at 10492.85. Banking stocks led by private banks took a hit after the finance ministry set a 15-day deadline for banks to take pre-emptive action on operational and technical risks, However, after days of losing streak, PSU banks ended positive with the Nifty PSU Bank index closing 0.71% higher. The fraud-hi Punjab National Bank bounced back, gaining 3%. On the broader market, though the BSE Mid cap index dropped 0.23%, the smallcap index rose 0.21%. The Business Standard, New Delhi, 01st March 2018

India replaces China as world's fastest growing economy, GDP growth at 7.2% in Q3 Economy poised to move in a faster lane, recovering from the disorderly effects of demonetisation and GST. The Indian economy grew at 7.2 percent in October-December 2017, and will likely expand 6.6 percent in 2017-18, latest official estimates said on Wednesday, amid strong revival signs in consumption spending and investment activity. The economy is poised to move into a faster lane, swiftly recovering from the disorderly effects of demonetisation and the goods and services tax (GST). The rebound in India’s “real” inflation-adjusted gross domestic product (GDP) growth from 6.5 percent in the previous quarter (July-September) will likely help regain its lost status as the world’s fastest growing major economy outpacing China, which grew 6.8 percent in October-December 2017. Latest estimates broadly mirror the trends seen in high frequency indicators like corporate income and industrial outp...

 GDP expands 7.2% in Oct-Dec as dust settles over GST roll-out Economic growth recovered to a five-quarter high of 7.2 per cent during October-December, backed by strong manufacturing and investment activity as the disruption caused by the goods and services tax (GST) bottomed out. The robust third-quarter performance led to a marginal upward revision in the second advance estimate for 2017-18 to 6.6 per cent from 6.5 per cent in the first estimate, though it was still lower than the 6.75 per cent projected by the Economic Survey Gross domestic product (GDP) growth has been revised up to 6.5 per cent for the second quarter against 6.3 per cent estimated earlier. Growth stood at 6.8 per cent for the third quarter of 2016-17, which was the period of demonetisation. India overtook China’s 6.8 per cent growth in October-December after a three-quarter gap, regaining its status as the world’s fastest-growing major economy Bibek Debroy, chairman, Economic Advisory Council to the P...

15th Finance Commission will need to define populism: Chairman NK Singh The 15th Finance Commission, set up to recommend the devolution of central pool taxes to states as well as a fiscal consolidation roadmap for government finances, will require to define what constitutes a "populist" measure in order to fulfil its terms of reference, Commission Chairman NK Singh said on Wednesday.  At an interaction here with editors along with some members of the Commission, including former Economic Affairs Secretary Shaktikanta Das, the Chairman also pointed out some unique terms of reference of the current Finance Commission arising from the abolition of the Planning Commission and the roll out of the Goods and Services Tax (GST) last year.  "The 15th Finance Commission will recommend on creating measurable monitoring criteria on states' performance on parameters like ease of doing business, on government programmes like Make In India and populist policies," Singh s...

EPFO makes online claims must for PF withdrawals above Rs 10 lakh Retirement fund body EPFO has made it mandatory to file online claims for provident fund withdrawals above Rs 10 lakh, taking another step towards becoming a  paperless organisation. The Employees Provident Fund Organisation (EPFO) has also made it mandatory to file online claims for withdrawals of above Rs 5 lakh under the Employees Pension Scheme 1995. Under the pension scheme, there is a provision of part withdrawal of pension, commonly known as commutation of pension money. At present, EPFO subscribers have the  option of filing online as well as manual claims for provident fund withdrawal as also for pension.The decision was taken at a meeting chaired by Central Provident Fund Commissioner on January 17, 2018, an official said. The Business Standard, New Delhi, 28th February 2018

India Inc's avg salary hike to be 9.4% this yr: Survey Employees in India are likely to get an average salary hike of just 9.4 per cent this year, same as last year, while key talent are expected to get appraisals of as much as 15.4 per cent as companies increase focus on performanceHR consultancy Aon Hewitt's annual Salary Increase Survey, that analysed data across more than 1,000 companies from over 20 industries, said the average salary for India Inc stands at 9.4 per cent this year. A on believes average pay increases in India will remain between 9.4-9.6 per cent. As per the survey, companies in India gave an average pay increase of 9.3 per cent during 2017, marking a departure from the double digit increments given by organisations since the inception of this study.Even as salary hike remained at the same level on a year-on-year basis, India continues to lead the Asia-Pacific region.China is expected to dole out a salary raise of 6.7 per cent, Philippines 5.8 per cen...