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RBI relaxes equity holding norm for asset reconstruction companies Move to encourage foreign funds scouting for bad assets to tie up more with domestically incorporated ARC The Reserve Bank of India (RBI) on Thursday allowed asset reconstruction companies (ARCs) with a minimum net owned fund of Rs 100 crore to convert debt into equity worth more than 26 per cent. This gives ARCs greater control in a distressed asset and would encourage foreign funds scouting for bad assets to tie up even more with domestically incorporated ARCs, said an executive with an asset reconstruction company.ARCs typically convert their acquired debt into equity in case they find the company can be nursed back to health. The central bank had so far put a cap of 26 per cent of equity holding in such companies. The RBI also put additional conditions on such ARCs, such as at least half of the board of the directors of such firms should be independent, and any policy on debt to equity conversion should be

High GST may hit Make-in-India electronics goal Prime Minister Modi’s flagship Make In India plan could be hurt by the GST rates that have been set for electronics as some rates make it cheaper to import goods, industry players have said, possibly putting a damper on the government’s goal to achieve zero imports in electronics by 2020. The Manufacturers’ Association for Information Technology (MAIT), the apex body representing India’s IT hardware sectors and certain manufacturers, expressed concern over tax slabs under  GST regime related to printers, monitors and data cables. Speaking to ET, Anwar Shirpurwala, Executive Director, MAIT said that although GST has reduced the number of taxes, the rates in some cases make it cheaper for importers than for smaller companies manufacturing in the country. For example, the pre-assembled desktops are charged at 18% but standalone monitors that are mostly manufactured in the country are charged at 28%. “All IT products should be in one

Defaulting promoters set to lose their companies Wilful defaulters and borrowers with NPAs for a year or more cannot bid NOT ELIGIBLE FOR BIDDING An ordinance amending the and Bankruptcy Code (IBC) barred promoters of undergoing the resolution process for their own companies when auctioned as part of bankruptcy proceedings.Besides, sister concerns and corporate will also not be eligible to these companies. The ordinance, promulgated Thursday, added Section 29A to “Aperson shall not be eligible to resolution plan if such person, or person acting jointly with such any person who isapromoter or control of such person, insolvent.” This prohibits promoters or sister of companies with non performing more than a year from bidding for these companies In order to bid, promoters will have to make the NPAs standard assets by paying the principal and interest.However, even this is not allowed once the National Company Law Tribunal (NCLT) has accepted an insolvency petition. None of the

GST Council revises rates for 66 items India's most comprehensive indirect tax reform — the goods and services tax (GST) — is inching towards a July 1 rollout with the GST Council cutting the rate on household goods and other essential items, raising the threshold for the scheme that requires lesser compliance and approving another key set of rules relating to audit and accounts. At its meeting on Sunday in the Capital, the council revised rates on 66 items such as pickles, sauces, fruit preserves, insulin,  cashew nuts, insulin, school bags, colouring books, notebooks, printers, cutlery, agarbattis and cinema tickets, following representations from industry. Restaurants, manufacturers and traders having a turnover of up to Rs 75 lakh can avail of the composition scheme with lower rates of 5%, 2% and 1%, respectively, with lower compliance, against Rs 50 lakh previously. A GST rate of 5% will be applicable on outsourcing of manufacturing or job work in textiles and the gems

Private sector may get government funding to promote tourism The government plans to partly finance private sector expenditure on promoting tourism in India and may offer leading hotels, travel agencies, online travel portals and airlines as much as 50 per cent of their annual marketing budget as a fixed contribution, based on their credibility The proposal, which will be a winwin proposition for stakeholders, is aimed at pushing government initiatives such as development of tourist circuits and zones, islands and beaches. It will add to  It will add to the country's foreign exchange earnings and create much-needed jobs. Private ventures will have more funds for promotion, with a sustained contribution from the government. The government is discussing the idea with stakeholders and assessing the annual cost of the initiative, a senior government official told ET."The amount of financing to private players will depend on the star-rating and size of hotels as well as tra

GST rate cut Restaurant body to meet govt over pricing The National Restaurant Association of India (NRAI) is likely to make a representation to the government over the next two days regarding the passing on of benefits of the lower goods and services tax (GST) rates to consumers.NRAI has the country´s top fast food chains, among others, as its members. The government on November 10 had slashed the GST on AC and nonAC restaurants —excluding fivestar hotels —to 5 per cent from the earlier 18 per cent and 12 per cent, respectively.But the input tax credit was withdrawn with the rate revision, prompting restaurant chains, including McDonald´s, to with hold passing the full benefit of the tax cut. Their argument was that the non availability of input tax credit pushed up costs by 1012 per cent, implying that the 13 per cent GST cut was taxneutral.“While we welcome the move by the government to cut GST, it may have to relook the issue pertaining to input tax credit,” said NRAI Preside

Trigger in Banking Regulation RBI and public sector bank’s failure triggers the Banking Regulation Amendment Bill Common consumers, farmers, small traders and educated unemployed youths need credit facilities and banks are expected to provide them as per the Union and State Government schemes and policy. But while corporate giants who have tremendous influence on the banking sector are getting ample credit facilities and concessions in recovery of dues, the very principle of equity is crushed. Both the RBI and banks failed to maintain the balance with the result that they are almost compelled by the new Amendment to recover the dues by way of liquidation of the assets of the big and willful defaulters. While the Amendment in the Banking Regulation Act that went through Parliament in Monsoon Session, the ordinance was issued first on 4th May when the Parliament was not in session. The said ordinance and now the bill while stressing the need for the amendment points out that th