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Monthly revenue collections from the goods and services tax (GST) are improving, but adjusting for refunds, the mop-up is not very comforting. And the recent concessions are likely to exert more pressure on tax collections, pushing the fiscal deficit higher.  Last week, the GST Council cleared a proposal to incentivize digital transactions on a pilot basis via Rupay cards, B HIM a pp and the UP I system. Customers making payments through these platforms would get cashback of 20% of the total GST amount, subject to a maximum limit of Rs.100. While the intention is to promote a cashless economy, the timing may be wrong, especially because GSTcollections are still short of the required monthly run-rate of  Rs. 1 trillion.  Going by the estimate of the group of ministers under Bihar deputy chief minister Sushil Modi, the revenue loss on account of this movewould be  Rs. 1,000 crore annually.  Although compliance has improved after the e-way bill implementation in May, contrary to expec

Following Basel III norms would free up about Rs. 60,000 crore of capital for lenders The government will hold talks with the Reserve Bank of India (RBI) on relaxing capital norms for banks and bringing them in line with less stringent Basel III guidelines, said a senior government official. Such a move would free up an estimated Rs.60,000 crore of capital at state-owned lenders, allowing them to step up lending to fuel the reviving economy, bolster weaker banks and reduce pressure on the government to provide capital. This follows discussions by the finance ministry with Niti Aayog and other stakeholders. The minimum common equity (CET) Tier-I ratio as prescribed by RBI — money that banks need to set aside — stands at 5.5% of riskweighted assets against 4.5% under Basel III norms. There is a need to lower this to the level stipulated by the Basel Committee on Banking Supervision, said the official cited above. By freeing up capital, around Rs.6 lakh crore of lending can be achie

Auto component industry on Monday sought uniform 18 per cent GST across the sector stating that low taxation would lead to better compliance and larger tax base. The industry, which reported a growth of 18.3 per cent to Rs. 3.45 trillion in 2017-18, said the lower tax levy would also help in curtailing flourishing of grey operations in the aftermarket. "One of the key demands of the industry has been a uniform 18 per cent GST rate across the auto componet sector.  Currently 60 per cent of the components attract 18 per cent GST rate, while the rest 40 per cent, majority of which are two-wheelers, and tractor components attract 28 per cent, "ACMA President Nirmal Minda told reporters here. The Business Standard, 07th August 2018

Tourism Minister K J Alphons also said the government has launched the 'Incredible India 2.0' campaign, marking a shift from generic promotions to market-specific promotional plans Seeking to promote tourism, the government has extended e-visa facility for citizens of 165 countries at 25 airports and five seaports, the Lok Sabha was informed on Monday.  Tourism Minister K J Alphons also said the government has launched the 'Incredible India 2.0' campaign, marking a shift from generic promotions to market-specific promotional plans.  A 24X7 toll free multi-lingual tourist helpline has also been put in place as part of the efforts. To promote tourism in India, events such as 'paryatan parv' (tourism festival), International Buddhist Conclave and International Tourism Mart too have been organised.  He said while development and promotion of tourism is primarily the responsibility of state government, the Union Tourism Ministry provides central financial assis

The committee stated that RBI should have engaged more in consultations with stakeholders on the matter before resorting to discontinuation of LoU/LoC A parliamentary panel on Monday asked RBI to restore Letters of Undertaking (LoUs) -- banned after their misuse in the Rs 140 billion PNB scam -- at the earliest with proper safeguards in order to increase the availability of credit for traders.  The Parliamentary Standing Committee on Commerce said in its report that the ban of LoU/LoC has resulted in rise in the cost of credit by 2 to 2.5 per cent.  It said the move would certainly affect the cost competitiveness of country's trade and industry and have a cascading effect on jobs and the loss of jobs is something the country can ill-afford. The committee stated that RBI should have engaged more in consultations with stakeholders on the matter before resorting to discontinuation of LoU/LoC.  "It is of the considered opinion that LoU/LoC should be restored at the earliest

Markets regulator Sebi has decided to appoint auditors for conducting forensic audits of financial statements of listed companies to check frauds.  The move comes amid Sebi ordering forensic audit of a slew of companies including Fortis Healthcare.  Of late, there have been concerns voiced over certain auditors for being negligent while examining books of listed firms with various inconsistencies in financial statements being ignored.   Sebi has now invited applications from eligible CA firms "for empanelment to take up assignments relating to forensic audit of financial statements of listed companies. Spelling out the eligibility criteria, Sebi said that the applicant should have minimum 10 years of experience in the field of audit or forensic audit; should have at least 5 partners or directors involved in forensic audit related work, the regulator said in a public notice.  "Application shall not be considered where disciplinary action or proceedings have been initiated

The constraints which any regulatory agency has in fixing the goods and services tax (GST) rates in a country include the fact that it should be low enough to ensure compliance as well as not cause inflation, and high enough to generate revenue for the government. The concerns which led the GST Council to initially prescribe multiple rates was primarily to generate the same revenue as before, and in that light, keep the effective indirect tax rate on the commodity as close as in the previous jurisdiction. Rate rationalizations over a period of time have tried to bring down the rates in sectors to boost economic activity and move from a high rate of 28% to 18% for most commodities. In the most recent rate rationalization, the highest tax bracket of 28% has been rationalized further with rates on daily-use items like perfumes, cosmetics, toiletries, hair dryers, shavers, mixer grinder, vacuum cleaners and lithium-ion batteries, being lowered to 18%. For a number of consumer durables