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Your insurance premium is likely to increase after the implementation of the Goods and Services Tax (GST), if the final tax rate is fixed at 18%. However, since a number of levies, which are currently part of your premium, will be subsumed into one tax, it is expected to bring down the compliance cost significantly. Though the exact impact will be ascertained only after the rate is fixed, rough estimates suggest an increase of around 2% in the premium paid. So, if your premium is currently R1,000, you may have to pay R20-30 more. At present, the effective service tax rate is 15%, which is applicable to most services. According to experts, companies will also look at ways to minimise the impact. “The premiums are likely to go up marginally depending on the rate set for premiums under GST…If the tax is 18% then the likely impact on premium will be about 3%. Insurers will evaluate options to minimise this impact on investors,” a spokesperson at Reliance Nippon Life Insurance s

The automobile sector is expected to be the biggest beneficiary of the Goods and Service ( GST) tax regime, says ratings agency Moody’s in a new report. Though the shift to the new indirect tax regime is positive for both growth and government tax revenues over the medium term, “ the short- term sovereign credit implications will be limited,” it added. Under the current architecture, companies have to contend with the issue of multiplicity of taxes, which inflates product prices. But under the GST, the problem of the cascading effect of taxes will be addressed. This, according to Moody’s, will benefit the automotive industry the most. While the tax rate is yet to finalised, Moody’s expects it to be lower than the multitude of taxes such as sales tax, excise duties, local taxes, and value- added taxes the automobile sector currently pays. Thus, shifting to the new system will reduce final prices of products, spurring consumer demand. Further, the new architecture will also make

With the government adopting an inflation target of four per cent, the Reserve Bank of India (RBI) is likely to keep its policy rates unchanged on Tuesday in the year’s third bi- monthly monetary policy review. Since January 2015, RBI has reduced its policy rates by 150 basis points to 6.50 per cent. With the adoption of the inflation target of four per cent, the chances for a further rate cut in the remaining part of the financial year seem slim, economists had warned in aBusiness Standard poll According to RBI’s projection, the rise in the consumer price index ( CPI) should follow a glide path to come down to five per cent by January 2017. With the government adopting an inflation target of four per cent, the Reserve Bank of India (RBI) is likely to keep its policy rates unchanged on Tuesday in the year’s third bi- monthly monetary policy review. Since January 2015, RBI has reduced its policy rates by 150 basis points to 6.50 per cent. With the adoption of the inflation targe

Senior Union ministers have advised the nine Bharatiya Janata Party ( BJP)- ruled states to call special sessions of their legislative assemblies to ratify the Goods and Services Tax (GST) Constitution amendment Bill by the end of this month. The Lok Sabha is slated to debate the Bill on Monday, a discussion in which Prime Minister Narendra Modi will intervene. Barring a tweet when the Rajya Sabha passed the Bill on Wednesday, the PM is yet to comment on the proposed legislation. Congress leader Jairam Ramesh has been critical of the PM’s absence during the debate in the Upper House, terming it “Modi mukt Parliament”. After the Lok Sabha’s approval, the Bill will be sent for presidential reference. The government plans to transmit the Bill to states by August 10. Government strategists are trying to ensure that the requisite 16 of the 31 states ratify the Bill by the end of this month. Finance Minister Arun Jaitley, Information and Broadcasting Minister Venkaiah Naidu and other

For all those who thought that GST was just an indirect tax reform, think again. The implementation of GST will affect direct taxes as well, helpinwideningthetaxbaseand increase taxe collections. According to tax administrators, GST will help in curbing domesticblackmoney.“Though it is a reform for indirect taxes, there are filers who understate incomes by not reporting transactions. By doing this, they save excise, VAT, Octroi etc, and under-report their incomes. Since, GSTwillhaveapapertrail, which can be accessed by the income tax department, such practiceswilldiscouragegeneration of black money in the system,” a tax official said. Permanent account number (PAN) and Aadhar will be used more frequently, and will be requiredtofileGSTreturns. This willhelpthetaxmentracktransactions more systematically. Therecanbemoredatamapping forauditbyrevenueauthorities. Last year, a panel headed by chief economic adviser Arvind Subramanian had said that bringing alcohol, real estate and p

The government and the Bharatiya Janata Party ( BJP) are confident of a smooth legislative journey for the goods and services tax ( GST) over the next few months, both in state Assemblies and Parliament. The two are now chalking out a campaign to take the tax reform to the people as an effort that would reduce the burden on the common man and pave the way for ‘ achche din’, or better days. The poll campaign for Uttar Pradesh Assembly polls, due early 2017, will have the BJP unleash this campaign. The government also hopes to continue to isolate the Congress, the main Opposition party in the Rajya Sabha, both on the ground as well as in Parliament. In this, the support from regional parties, many of whom count Congress as the principal rival in their respective states, will become vital. On Thursday, government strategists dropped broad hints that the subsequent GST Bills — Central GST and Integrated GST — would fall eminently in the category of ‘ money Bills’, since at the heart of

Corporate India’s compliance and legal costs are set to go up substantially over the next 12 to 18 months, as companies and businesses gear up to be goods and services tax ( GST)- ready. With eight months to go for GST roll- out — likely in April, 2017— businesses have to get their information technology ( IT) and accounting systems ready for the new indirect tax system, train personnel, suppliers and vendors, to be fully compliant of the GST processes. However, over a period of two years from the time of roll out of GST, tax experts expect compliances costs to come down as the new tax system stabilises. “There will an initial cost for businesses to be GST- ready,” says Rakesh Nangia, managing director, Nangia & Co. For large and mid- sized businesses, this would mean reorienting their IT systems, training personnel, and making their suppliers and vendors GST- compliant. Nidhi Goyal, managing director —tax and regulatory affairs, Protiviti Global, points out that many com