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GST Sops for Digital Payment Push GST Council may discuss proposal tomorrow, has option of incentivising merchants & customers A year after demonetisation, India is getting ready to give digital payments yet another push. It could consider providing incentives in the goods and services tax (GST) regime for payments that are settled electronically. The GST Council meeting on Friday is likely to consider a proposal in this regard, a senior government official told ET. “There is a thinking that digital transactions need to be incentivised .The council will look at what could be done,” the person said.The council could take up the proposal along with steps to cut GST on some items from the top 28% rate besides easing the compliance burden for businesses. As far as digital payments are concerned, the council has the option of incentivising merchants and customers. Under the proposal, benefits in terms of credit or exemption could be provided within central and state GST to enc

GST woes for branded apparel persist Branded apparel manufacturers and retailers are yet to overcome the impact of the new indirect tax regime. The textile chain was in limbo after the goods and services tax (GST) was introduced because of the cascading tax burden and now consumer sentiment has been impacted.Falling exports have made matters worse.The September quarter results of big players have reflected this. Branded apparel products that cost more than Rs 1,000 attract 12 per cent and those below this 5 per cent.As a result, consumers are shifting towards lowpriced apparel.Established players have to comply with the new tax mechanism as they don´t deal in cash. A part from that, branded apparel firms had to purchase from their bulk consumers ahead of the date of the GST introduction, July 1, to avoid the high tax levy. Asaresult, they have some additional stocks. Rahul Mehta, president, Clothing Manufacturers Association of India, said, “Weak consumer sentiment, sharply falling

Consumer Auto Cos Take Rural Road to Growth FMCG, appliances and auto cos report healthy sales in Jul-Sept, much ahead of urban areas Purchases of consumer products and automobiles in rural India picked up pace during July-September, outstripping the rate in cities, as a good monsoon lifted farm income Rural sales of FMCG products by both value and volume — the number of products sold — increased 13% during the quarter from a year earlier, according to Kantar Worldpanel, the consumer insights arm of WPP, the world’s biggest advertising company. It was the fastest pace of growth in over three years. In contrast, the urban market expanded 4% by value and 1% by volume during this period, the researcher said This is the second consecutive quarter of double-digit growth in the rural FMCG market, which helped to boost volumes in the overall fast-moving consumer goods sector by 7% compared with about 4% a year earlier. The rural market accounts for more than a third of all consumer

PSU banks line up to raise funds after recapitalisation plan Moody s rating upgrade After the govt announced the bank recapitalisation plan on 24 October, PSU banks have announced plans to raise more than Rs13,000 crore through QIPs as against a total of Rs8,419 crore raised in the last four year Public sector banks are queueing up to raise funds from the equity market, especially through qualified institutional placements (QIPs) against the back drop of improved investor sentiment on account of the government’s bank recapitalisation plan and a recent upgrade of India’s sovereign rating by Moody’s Investors Service. After the government announced the Rs2.11 trillion bank recapitalisation plan in October, PSU banks have announced plans to raise more than Rs13,000 crore through QIPs since 24 October as against a total of Rs8,419 crore raised in the last four years. On Tuesday, Bank of Baroda’s board approved fund raising up to Rs6,000 crore through QIP or rights issue, the bank

FMCG firms lower prices after GST rate cut ITC, Dabur, HUL and Marico have reduced prices of various products already in stores to pass on the benefits of GST rate cut to consumers Packaged goods companies have started lowering the prices of products that are already in retail stores to pass on benefits they received from the GST rate cut.New Delhi-based Dabur India Ltd on Tuesday said in a statement that the company had reduced prices of its existing stocks by 9% across categories like shampoo, skin care and home care products. “The company is passing on the benefits on existing stocks by providing primary discount of 9% to its trade partners,” Lalit Malik, chief financial officer of Dabur India, said. “In accordance with the GST laws, we had last week communicated to all our business and trade associates directing them to start charging the revised lower GST rates, wherever applicable, on all existing stocks. We have also directed them to pass on the GST benefit to the end co

CBEC chief tells firms, restaurants to lower prices Central Board of Excise and Customs (CBEC) Chariman Vanaja Sarna has written to 100 major companies including ColgatePalmolive, Dabur, Nestle, and Hindustan Unilever, and 15 restaurants including McDonald´s, Café Coffee Day, and MTR, to pass on the benefit of reduction in goods and services tax (GST) rates to consumers. The move comes amid instances of companies and restaurants persisting with high rates, raising profiteering concerns.In a letter to company heads and associations, Sarna asked them to go for a commensurate reduction in the prices of products and give it wide publicity.“While it is a legal requirement, you will agree that for all citizens this is an important social responsibility. It would be most helpful if the reduced prices are also given wide publicity,” the letter reads.The letter was sent a week after the GST Council went for a massive trimming of items in the 28 per cent bracket, besides reducing rates o

CBEC Chief  Missive to FMCGs Pass on Benefits Post GST Tweak Letters sent to over 100 companies; move follows warning by finance secretary Hasmukh Adhia Keeping up the pressure on the consumer goods sector, the Central Board of Excise and Customs (CBEC) chairman has written to the biggest companies to ensure that cuts in the goods and services tax (GST) are passed on to customers. The GST Council has cut rates on 178 products including chocolates, detergent, toothpaste, shampoo, air freshener and shaving cream to 18% from 28% and the government is keen that this translate into lower prices for buyers. “We have reached out to over 100 companies,” CBEC chairman Vanaja Sarna told ET. “This is essentially an appeal asking them to pass on the tax cuts to consumers.” India’s biggest fast-moving consumer goods companies include Hindustan Unilever, ITC, Nestle, Dabur, Godrej Consumer Products, Amul, Perfetti Van Melle, L’Oréal and Mondelez. A top executive at a large diversified cons