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While rolling out the goods and service tax (GST) from the central hall of Parliament at midnight of 30 June 2017, Prime Minister Narendra Modi told the nation that the new indirect tax system will unify its divergent state economies with ‘one nation, one tax’ right from  Leh to Lakshadweep. About 18 months later, the biggest tax reform since India’s independence is still in a fluid state of continuous change as businesses, especially the small ones, struggle to cope with the rigours of a technology-driven and transparent tax system that has cast its net far and wide to bring at least 3.4 million new indirect taxpayers. Some of the concessions to small businesses announced earlier this month by federal indirect tax body, the GST Council, ahead of parliamentary polls due by April-May, raise fears about sacrificing some of the basic design advantages of GST over the previous regime— simplicity and uniformity. The changes imply that policymakers are still struggling to make the reform a

Mint Road appears to be going the extra mile to help strengthen India’s derivative platform that covers interest rate risks, seeking to make overseas participation in the local Overnight Interest Rate Swap (OIS) market operationally easier and viable.  “The central bank has asked offshore investors to write their views on the OIS. It is seeking suggestions to bring in operational ease,” one of the two people aware of the move told ET.  OIS volumes in India have been traditionally low, with a limited number of domestic banks, bond and fund houses using the platform for occasional hedges or trades. Operational complexities are reportedly blamed for the pronounced absence of offshore investors, and low trading volumes. An email query sent to the RBI remained unanswered until the publication of this report.  In India, OIS trading volumes averaged ?25,938 crore in November, compared with ?22,724 crore in March, showing an increase of 14%, data from the Clearing Corporation of India show

The income-tax department has drawn up a list of individuals who carried out high-value transactions in financial year 2017-18 but did not file income tax returns. “Analysis was carried out to identify non-filers about whom specific information was available in the database of the department,” the Central Board of Direct Taxes (CBDT) said in a statement on Tuesday. “The sources of information include statement of financial transactions (SFT), tax deduction at source (TDS), tax collection at source (TCS), foreign remittances, exports and imports,” it said.  The Non-filers Monitoring System (NMS) aims to identify and keep a watch on people who enter into high-value transactions and have potential tax liabilities but have not filed their tax returns, it said. “Data analysis has identified several potential non-filers who have carried out high-value transactions in financial year 2017-18 but have still not filed income tax return for assessment year 2018-19 (relating to FY2017-18),” th

Data shows improvement in the performance of agriculture and manufacturing sectors India’s GDP grew at 7.2% in 2018-19, according to the first advanced estimates released by the Central Statistical Office on Monday, the fastest rate of growth since 2016-17, marking a recovery in economic activity from the twin disruptions of demonetisation and Goods and Services Tax.  To be sure, these figures are forecasts, as the first advanced estimate figures are based on about two quarters of actual economic data. While the 2018-19 growth is 55 basis points more than the 2017-18 figure, it is 20 basis points less than the RBI’s forecast of 7.4% and 7 basis points less than the International Monetary Fund’s forecast of 7.3% for the current year. One basis point is one hundredth of a percentage point. India continues to be the fastest growing major economy in the world according to the latest figures.  These figures also show that India’s economic growth under the Narendra Modi government has

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Monday dealing with issues of liquidity was one of the central bank’s biggest priorities. However, any infusion would be strictly based on the need to ensure that it was not seen as “easy money” by the markets. This comes a day before Das meets the representatives of non-banking financial companies (NBFCs) in Mumbai. Addressing a media briefing, Das did not rule out the central bank paying interim dividend to the Centre, but said no decision had been taken yet on the amount to be given. “The situation is something the RBI is constantly monitoring and will take steps whenever a liquidity deficit is noticed. The RBI will not like a situation where liquidity becomes a kind of loose money. Any infusion of liquidity will have to be carefully considered and has to be need-based,” Das said. “Therefore, caution and care have to be exercised by the RBI so that excess liquidity, which sometimes has adverse consequences, is not crea

Current norms in conflict with domestic laws of several countries The Securities and Exchange Board of India (Sebi) is working on new data privacy norms for foreign portfolio investors (FPIs). The move comes as the regulations are said to be in conflict with the domestic laws of several countries, especially European nations and Canada, which together account for 40% of total FPI flows into India. The concerns of FPIs relate mostly to the compatibility of Sebi’s new know-your-customer (KYC) requirements with data localisation norms applicable in their home countries. Exemptions for publicly pooled funds along with the creation of a high-end encrypted platform for data exchange and storage are some of the key measures under the regulator’s consideration, said two people aware of the development. The process assumes significance as Sebi had set a March 2019 deadline for FPIs to submit KYC documentation as per the revised rules. The Economic Times, 8th January 2019

Says liquidity infusion should be need-based, idle cash in the system won’t be encouraged Reserve Bank of India (RBI) governor Shaktikanta Das struck a note of caution on farm loan waivers, saying open-ended forgiveness would affect credit culture and the behaviour of borrowers. He also said the central bank is open to taking more steps to infuse liquidity if the need arises but it doesn’t want too much cash sloshing around in the banking system.  “Liquidity needs of the economy are regularly monitored and whatever steps are required will be taken,” Das said at a press briefing in Delhi. “RBI would not like a situation where liquidity becomes a kind of loose money.” Any infusion of liquidity will have to be based on requirements. Das met representatives of micro, small and medium enterprises (MSMEs) in the capital on Monday and will meet executives of nonbanking finance companies (NBFCs) in Mumbai on Tuesday to get a perspective on liquidity needs. He said MSME representatives ma