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Taxman plans to match GST invoices to plug leakage Move in response to falling GST revenue collection The GST Council may move the sales and purchase invoice matching system to the back end. It will do so to keep tabs on missing transactions and check over-claim of input tax credits in the goods and services tax (GST). At present, assessees claim input credits themselves by filing summary input- output returns, and the tax authorities do not have any clue whether the claims are correct or not. The process of invoice matching was supposed to be done by the assessees, though it was deferred till March. However, slowing GST revenues have now prompted the government to design an alternative mechanism, under which tax officials will do the matching themselves. “Instead of asking taxpayers to match invoices, we may do it ourselves at the back end. We may follow a risk-based approach; when the gross level of transactions does not match, we may match invoices,” an official said, addi

Govt seeks nod for Rs  800 bn PSB recap through bonds Expects to issue these before end of fiscal year The Finance Ministry sought Parliament´s approval to spend Rs 800 billion extra this fiscal year to recapitalise state owned through bonds. Thursday´s move kick starts the Rs 1.35 trillion bank recapitalisation bond programme announced by Finance Minister Arun Jaitley in October to help public sector banks come out of the spiralling nonperforming asset mess.The Rs 800 billion infusion would take place before March 31, officials said. “These bonds will have nonSLR (statutory liquidity ratio) status, and will be non tradable,” an official said on condition of anonymity The SLR isaportion of deposits that banks need to invest in government securities.The SLR status to any instrument provides a traceability option and they can be traded in the secondary market.“The intention is to ensure that banks´ ability to support growth is not diminished Reckless lending by state owned ba

Lenders plan Aircel, GTL Infra merger Look at March 31 as the proposed deadline to initiate the process Lenders to Aircel and GTL Infrastructure have come up with a solution to clear the combined debt of the firms. They are looking at the option to merge the firms so that the new entity gets a stable earning. The lenders are looking at March 31 as the deadline to initiate the merger. This comes after a proposed merger of Aircel with Reliance Communications (RCom) was called off, and banks are left with deteriorating financial health of the company as the Aircel’s shares are pledged with them.The lenders have also asked Maxis, the Malaysian promoter of Aircel, to bring in fresh equity worth at least Rs 40 billion into its Indian arm. Part of the proceeds would be used for the GTL Infrastructure merger and to repay debt. The lenders are staring at huge provisioning as Aircel has failed to repay its debt on time and telecom tower firm, GTL Infrastructure, is in the final stages

RBI may maintain status quo on rates for entire 2018: Experts The Reserve Bank of India (RBI) is likely to keep the key policy rates unchanged in 2018, despite bond yields rising sharply in the past three months.A rate hike might not come in the entire calendar year, economists and bond dealers said, adding a rate cut was not a possibility either The sharp upward movement in yields started in October last year, when the 10 year bond yields stood at around 6.65 per cent.The yields are now at 7.33 per cent. In the same period, the one year overnight index swap (OIS), an instrument used to hedge rates, rose from 6.09 per cent to 6.46 per cent. In a theoretical sense,arise in the OIS rate might indicate rate hikes, but this time the OIS movement was directly influenced by the rise in yields “It is very difficult for the OIS to remain undisturbed when the yields are rising so much.Base case suggests there would be no hike in 2018.The rise in (bond) yields is more about supply and th

Services sector growth improves in December Combined services, manufacturing PMI fastest since demonetisation. India´s economy has a reason to cheer in the New Year with its biggest sector —services —rebounding to growth in December from contraction in November, though the expansion is moderate, according to a widely tracked Nikkei Purchasing Managers´ Index (PMI). With manufacturing sector posting five year high growth in December, the combined expansion in the two sectors was the fastest since October 2016, the month of demonetisation.Higher activities in services led to increased hiring by firms with jobs growth quickening to the fastest since September, the PMI survey of 400 private sector firms showed. However, effects of the goods and services tax (GST) still persist, since a large chunk of the improvement in PMI account delayed payments from previous months, and cash shortage still not abated.PMI for services grew from 48.5 in November to 50.9 in December. APMI above 5

CBI failed to challenge 2015 excess spectrum order: Public prosecutor The public prosecutor in the 2G spectrum case, Anand Grover, told the Supreme Court that the Central Bureau of Investigation (CBI) had not followed his recommendation to challenge a 2015 special court order acquitting all the accused in the excess spectrum case. Grover made the complaint even as the top court bench monitoring telecom cases demanded a status report from the CBI and the Enforcement Directorate on their investigations into alleged irregularities related to the Aircel-Maxis deal.The public prosecutor had faced the special court's flak last month when it acquitted all the accused, including former telecom minister and DMK leader A Raja and his party colleague and MP Kanimozhi, in the 2G case. An appeal against the December 22, 2017, judgement is expected to be filed in the Delhi High Court, challenging the acquittal and also seeking expunging of the adverse remarks  the special court made agai

Sebi proposal on distributors, advisors can trip mutual funds Business from banks will be adversely impacted, advisors likely to go out of trade The Securities and Exchange Board of India’s (Sebi’s) renewed push to split the role of an investment adviser and distributor is causing a lot of heart burn in the Rs 22 trillion mutual fund industry. The industry, which has been riding high due to robust inflows of Rs 50 billion a month from the systematic investment plan route could suddenly find itself in a situation when one of the prime contributors to the assets under management, banks, will be completely out of action. “If the proposals are implemented, around 40 per cent of inflows will be impacted as wealth management arms of banks will no longer be able to give advice on mutual funds,” said the CEO of a fund house. “The latest proposals will also drive the bulk of the business towards the distribution side,” said Dhirendra Kumar, CEO, Value Research. Distribution per se is