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Hopeful of sorting trade issues, India may scrap additional duties on 29 US goods India could withdraw the notification to levy additional duties on 29 US products from August 4, if both sides are able to resolve differences over tariffs before that date, official sources said, after three rounds of talks with representatives of the US administration in New Delhi. The two sides will also come up with a white paper at a meeting next month in Washington on issues that can be resolved over six months to 3-4 years. “We are hopeful of resolving trade issues before August 4,” said an official, adding that any country that notifies the World Trade Organization about tariffs has the right to withdraw or defer it. From the US side, assistant US Trade Representative (USTR) for South and Central Asian Affairs Mark Linscott, assistant USTR for agricultural affairs and commodity policy Sharon Bomer Lauritsen, deputy USTR Brendan Lynch and officials from the high commission attended the meetin...

RBI to the Rescue Again, Offloads Greenbacks Sells Dollar 400-500 m in onemonth futures contracts and an almost equal amount in the spot market Two weeks after South Block had decided to swap high-denomination bills in the autumn of 2016, the rupee came within touching distance of the 69 mark to the dollar. On Thursday, it breached that level, reportedly requiring the central bank to enhance supplies of the world’s reserve currency to prevent the local unit’s rout. During the day, the rupee hit a record low of 69.09, sliding past its earlier trough of 68.86, reported on November 24, 2016. In early trading Thursday, the Reserve Bank of India (RBI) is said to have sold  Dollar  400-500 million in one-month futures contracts. Later, Mint Street sold an almost equal amount in the spot market, some dealers said.  The RBI could not be contacted immediately for comments.  Such moves collectively helped the local unit erase some of its early losses. The rupee closed ...

1 NATION, 1 TAX, 1 YEAR The goods and services tax, one of India’s most significant economic reforms, was put in place on July 1 last year. To mark its first anniversary, we look at what’s been achieved, the successes, failures, what the experts think and what lies ahead HOW IT HIT BULL’S EYE, WITH A FEW MISSES One year into the goods and services tax (GST) regime, early-day jitters have given way to general acceptance that this may not be the most perfect single tax system, but it’s working. There are many issues that remain to be addressed, but the fact that some of the knotty ones have been resolved gives rise to confidence that even these will be sorted out. Here’s how the past year panned out. Inflation rate didn’t rise: GST, it was widely feared, would cause inflation to rise, as with many countries that launched a single tax regime. That hasn’t happened in India. The recent spike in consumer inflation has been due to high food and fuel prices, unrelated to GST. What he...

Steep Fall in Firms Wanting to be GST Suvidha Providers A year after GST, only 25 shortlisted GSPs are active out of the 70 A year after the roll out of the Goods and Services Tax (GST), the competition among companies to become GST Suvidha Providers (GSPs) to route invoice filings to the central system has fizzled out. According to a source in the GST Network, of the 70 shortlisted GSPs only about 25 are active, with even big names such as Tally remaining inactive.  A GSP offers a gateway to taxpayers to the GST Network by getting access to the APIs for uploading of invoices and filing returns. Some industry players have put the number of active GSPs lower at about 15. Even some of the companies who are relatively active as GSPs have made losses on their investments in the technological back-end and marketing. One such company, which is an active GSP but did not wish to be identified, has made only 10% of the Rs.25 crore revenue it was expecting from this business annually...

Indian Bank decides to withdraw dividend payment resolution Public sector lender Indian Bank has decided to withdraw a resolution related to dividend payment after the Reserve Bank of India (RBI) said, the bank can declare dividend after fully providing for mark-to-market (MTM) loss, gratuity and any other provisions. The bank's MTM losses alone is  around Rs. 5.47 billion. Indian Bank's board on may 10 had recommended for payment of dividend at Rs. 6 per share (60%) of the equity capital for 2017-18. According to Section 15(1) of the Banking Regulation Act, no bank acan pay any dividend on its shares until all its capitalised expenses, including preliminary expenses, organisation expenses, shares-selling commissions, brokerage, amounts of losses incurred and any other expenditure not represented by tangible assets have completely written off. The Business Standard, 29th June 2018, New Delhi

Individual bankruptcy rules to take more time: All you need to know The Insolvency and Bankruptcy Code is in force since 2016 for corporate entities Rules for individual bankruptcy might take still longer to come.  A key official involved in framing it, says: “While insolvency provisions for companies would not create a direct social impact, individual bankruptcy provisions will directly have social fallouts.”  The Insolvency and Bankruptcy Code (IBC) is in force since 2016 for corporate entities. The government has also issued a draft set of rules for cross-border insolvency. Norms for corporate guarantors, proprietorship and partnership firms are likely soon. Officials say bankruptcy is still seen in India in a derogatory sense and could affect families. Hence the caution in finalising rules for individual insolvency. Once all the rules are notified, the existing Presidency Towns Insolvency Act, 1909, and the Provincial Insolvency Act, 1920, would be replaced. Petiti...

BSE SME aims to list 300 firms by Dec The BSE SME Platform hopes to list 300 companies on its platform by December this year, a senior exchange official said. “As on today 254 SMEs are listed on BSE SME platform having a market capitalisation of Rs 21,000 crore. Nearly 46 companies have filed for listing, of which 20 SMEs have received approvals and we hope that 300 SMEs will get listed on our platform by December 2018,” BSE SME head Ajay Thakur told PTI on the sidelines of panel discussion on ‘International MSME day’ on Wednesday. The Mint, 28th June 2018, New Delhi

'PoeM' firms to be taxed at 40% Foriegn companies whose place of effective control are in India will have to shell out 40 per cent corpopration tax against 30 per cent levied on domestic firms. The Central Board of Direct Taxes has come out with clarifications for place of effective management (PoeM) through a notification for these Companies. Through PoeM, the goverment taxes companies located outside the country but controlled from India. It applies to companies having annual turnover of more than Rs. 500 million. The Business Standard, 28th June 2018, New Delhi

Sebi files appeal against Rs. 210 cr tax demand The Securities and Exchange Board of India (Sebi) has filed an appeal in the goods and services tax (GST) tribunal against a tax demand of  Rs .  210 crore for  providing various services in the 2013-16 period, two people familiar with the development said.  This follows the failure of talks with the finance ministry officials to waive the tax demand, and greater conviction within the regulator that it has a  strong case under the Finance Act.  The case pertains to tax liability on services provided by Sebi to entities such as stock exchanges, their members, brokers and investors for processing  initial public offerings, debt issues, mutual funds and new fund offers, besides providing informal guidance to firms. In 2013, the tax department had said these services were not in a ‘negative list’ of nontaxable services and were hence taxable. In February 2013, services  rendered by Sebi were not pu...

GST may have nodal appellate authority The revenue department is considering setting up of a centralised appellate authority to deal with the problem created by contradictory verdicts passed by  the Authority of Advance Rulings (AAR) in different states, a top official said on Tuesday. Under the Goods and Services Tax (GST) law, each state is  required to set up an Authority for Advance Rulings (AAR) comprising one member from the central tax department, and the other from the respective state.   In  view of the confusion being created by contradictory rulings given by different authorities on the same or similar issues, the Finance Ministry is planning  to set up a centralised appellate authority which could reconcile the contradictory verdicts of different AARs.   T he Mint, 27th June 2018, New Delhi

Bad loans at banks will rise further this fiscal: RBI report Gross NPA ratio of banks to rise to 12.2% by March 2019 if economic conditions stay the same Bad loans at Indian banks, especially those controlled by the government, will increase further in the year to March 31, placing additional strain on the  already stressed financial system, a central bank study warned.  Gross non-performing asset ratio of banks will rise to 12.2% by March 2019 from 11.6% at the end of the previous fiscal if economic conditions remain the  same, said the Reserve Bank of India financial stability report released on Tuesday. RBI’s latest report said that weak profitability of banks is an additional concern as it prevents lenders from setting aside adequate money to cover  potential losses on loans and makes them vulnerable to adverse shocks.  In a scenario of severe stress, this ratio may rise to as high as 13.3% by March, the report said. For public sector banks, this rat...