CA Online

The creation ofa ´bad bank´ will speed up resolution of stressed assets in the banking system, but it will also require significant capital infusion in the staterun banks to meet any shortfall, saysareport. The recent economic survey mentioned about formation ofabad bank that will purchase stressed assets and take them to resolution. “The creation ofa ´bad bank´ could accelerate the resolution of stressed assets in country´s banking sector, but it may face significant logistical difficulties and would simultaneously requireacredible bank recapitalisation programme to address the capital shortfalls at stateowned banks,” Fitch Ratings said inareport here on Friday. It said the country´s banks have significant asset quality problems that are putting pressure on profitability and capital, as well as constraining their ability to lend. It expects the stressedasset ratio to rise over the coming year from the 12.3 per cent as at endSeptember 2016, with the ratio significantly higher among

Co will establish ecosystem of partners that may include contract manufacturers and suppliers Apple has told the government that it plans to make most of its products in India and that it will establish an ecosystem of partners, which may include contract manufacturers and suppliers. The company is said to be planning a start with local production of its iPhone SE. “Apple plans to move up the value chain in their next phase, in terms of producing the entire suite of products, definitely all iPhone models, for which their entire ecosystem of partners needs to move in,“ IT secretary Aruna Sundararajan told ET. The company's main contract manufacturers Foxconn, Wistron, Pegatron and Inventec are closely watching its plans for that reason. “They (Apple) have two primary asks--one that they should be able to import the components that they need, and second that it should be cheaper for them to manufacture here than to import,“ she said. “The second question is where government has

The government can lower tax rates if people pay their dues sincerely, Union Power Minister Piyush Goyal said on Friday. “We can lower tax rates of GST, income tax and others if everybody pays taxes,” Goyal said while addressing businesses at the ‘EY Entrepreneur of the Year Awards’ in New Delhi. On the demand of businesses to lower tax rates, he said industry chambers ask for zero or five per cent tax the proposed GST regime. “I wonder what revenue neutral rate it would be, if we will put every thing in zero or low rates. Do we have to make profit at the cost of the nation?,” the minister said. Goyal also appealed to the charter accountants to suggest their clients to pay their taxes. Talking about the wind power tariff touching an all-time low of Rs 3.46 per unit without sops like accelerated depreciation, generation-based incentives and tax holidays, he said this auction was just for 1,000 MW and many more will come. He also rubbished the advisory issued by an industry body to

If you have made large cash deposits in the aftermath of demonetisation, you should brace for tougher scrutiny from the income tax department and keep documents like bank statements, passbooks, land records and sales records handy. The income tax department will soon ask you to furnish these documents to support your claims of these large cash deposits being made either from income exempt from tax like agricultural income or cash received from unidentifiable persons in the case of businesses or cash withdrawn from own bank accounts. Following the large cash deposits in bank accounts, the tax department started Operation Clean Money to scrutinize the source of all cash deposits to check if they were from legally declared income. The income tax department has data on 10.9 million accounts where deposits ranging from Rs2 lakh to Rs80 lakh were made in the period between 10 November and 30 December. Around 148,00 accounts were also identified wherein deposits of more than Rs80 lakh wer

On states' insistence, those transporting goods within or outside states will have to queue up at border for checking of e-permits The revolution the proposed goods and services tax (GST) promised might not be all that rosy because it would be hobbled by the need for an e-permit to be flashed at inter-state borders as the states insisted the old analogue practises continue. The states seem to have gotten their way and will continue with the old `permit raj' system, undermining one the biggest gains of GST. Though the paper permit may become an e-permit, those transporting goods within or outside states will still have to queue up at border checkposts where their e-permits will be checked. The centre resisted the move as its indirect tax administration moved away from the inspector raj era, but yielded to states' insistence on inclusion of this clause in the final GST law in order to build consensus and get the reform bill rolling. State tax authorities wanted this pro

The war on black money that has been raging since November, pitting income tax officials against tax offenders, is far from reachingadecisive turn. The latest battle in this war is being fought through two schemes: the Pradhan Mantri Garib Kalyan Yojana and Swachh Dhan Abhiyan. In addition,agrace period has been offered for nonresident Indians and those who were abroad from November 9 to December 30: they have time till March 31 to deposit their old currency notes with the Reserve Bank of India. According to provisional estimates, 94 per cent of the demonetised Rs.500 and Rs.1,000 notes, collectively worth Rs.15.44 lakh crore, have been deposited with the banks. If these figures are indeed the final numbers, it would mean the black money drive hasn´t achieved what the government had hoped for. Hence, income disclosure schemes have followed. While people are being encouraged to voluntarily disclose their wealth, advance analytics is also being used to catch the offenders. The first

The Securities and Exchange Board of India (Sebi) on Wednesday increased the investment ceiling of debt mutual funds in housing finance companies (HFCs). "In light of the role of HFCs, especially in affordable housing, and to further the government´s goal under Pradhan Mantri Aawas Yojana (PMAY), it has now been decided to increase additional exposure limits provided for HFCs in the financial services sector from 10 per cent to 15 per cent," said the regulator inacircular. Under the current guidelines, the sectoral exposure for debt mutual fund schemes is 25 per cent. However, for the financial sector, an additional exposure of up to 10 per cent was allowed only to HFCs. This additional exposure has been increased by five percentage points. Business Standard New Delhi,23rfd February 2017