CA Online

The government on Friday notified changes to the Banking Regulation Act, giving the RBI broad powers to deal with specific bad-loan cases as it tries to speed up resolution of Rs 9.64 trillion of stressed assets clogging the Indian banking system.Experts cautioned that this was just the first step in the process of putting the onus on the central bank to reduce the mountain of bad loans.The move could pose potential conflict-of-interest issues for the regulator,they said. The ordinance, which was approved by the President late on Thursday, also gives the government powers to authorise RBI to invoke the insolvency and Bankruptcy Code against defaulters. Separately, it also empowered the central banks on its own to settle bad loans with defaulters, and to form oversight commitees deal with the issue. The new rules are applicable with immediate effect and the centre has already issue a "general instruction" to RBI to take action, finance minister Arun Jaitley said. Business

The revenue department on Friday proposed to levy capital gains tax on unquoted shares at “fair market value” in place of the current practice of charging it on the basis value entered in the books of a firm.The Finance Act, 2017, passed by the Parliament has insertedanew section in the Income Tax Act (effective from April next year) for valuation of unquoted shares on fair market value for computing capital gains tax. Unquoted shares are those which are not traded on recognised stock exchanges.In pursuance of the amendment in the Finance Act, the Central Board of Direct Taxes (CBDT) on Friday released draft rules and invited comments from the stakeholders by May 19. "The valuation norms for unquoted shares is proposed to be changed radically," said Abhishek Goenka, partner and leader at tax consultancy firm PwC. Business Standard New Delhi, 06th May 2017

´ State-level check posts, which collect taxes on movement of goods, will not be required under the goods and services tax (GST) regime that will take effect from . July 1, although excise collection points may remain as they relate to taxation on alcohol, Revenue Secretary Hasmukh Adhia said on Friday.The rates will be common under GST and for the movement of goods in or outside a state, there is no need to check whether goods have moved physically out of the state or not, he said. Petroleum and alcohol products are not to be covered under the new indirect tax regime until the GST Council decides to imposearate on them. Business Standard New Delhi, 06th May 2017

The Indian economy will grow eight per cent in the next financial year as the full year impact of the goods and service tax (GST) will be seen by that time, Economic Affairs Secretary Shaktikanta Das (pictured) said. The eight per cent growth rate in FY19 will compare to a projected 7.5 per cent gross domestic product expansion in the current financial year and 7.1 per cent of 201617. Speaking on the sidelines of the Asian Development Bank´s 50th annual meeting, Das said, while the government continues to step up on reform measures, the country´s largest ever demonetisation of currency notes led to widening of the tax base and curbing of a parallel shadow economy."Impact of demonetisation was very very transient and has not spilled over to the current financial year...After demonetisation, the rates have come down, there is scope for further transmission of rates.I would expect that to happen.We see signs of revival in credit cycle," he added.The rupee has been Asia´s bes

The Reserve Bank of India (RBI) has issued new guidelines to quicken stressed asset resolutions through the joint lender forums (JLFs) comprising creditors to borrowers who are in default. RBI said it was exercising new powers conferred on it by the Banking Regulation Ordinance that was passed on Friday. The central bank slashed the minimum votes required in a JLF to reach a decision. It said decisions agreed to by 60% of creditors by value and 50% by number would be the basis for deciding a corrective action plan. Earlier, JLF decisions required the assent of 60% by number of creditors and 75% by value to achieve resolution. The JLF framework was introduced in 2014 to resolve stressed assets quickly. The large composition of the committees acted as an impediment because lenders found it difficult to arrive at a consensus. There have also been instances of a few banks striking private deals with borrowers even as they participated in a JLF. Despite disincentives such as a

The National Steel Policy approved by the Cabinet on Wednesday accords preference to locally manufactured steel in infrastructure projects but this can only work if there is an increase in the component of steel used in such projects. Steel comprises just 10 per cent infrastructure projects in India though internationally the figure is 40-45 per cent. According to experts, demand for steel in the country has plateaued and can be pushed up by infrastructure development. The policy will focus on increasing the country’s annual steel production to 300 million tonnes by 2025, involving an investment of Rs 10 lakh crore by 2030-31. This will encourage capacity addition, cost-efficient production and facilitate foreign investment. Steel Minister Chaudhary Birender Singh on Thursday  said the government was hopeful of attracting foreign direct investment through this initiative. “The focus on infrastructure-led growth will not only support the demand for steel but will also help us achi

After strongly contested arguments amid a raging public debate, the Supreme Court on Thursday reserved its verdict on the constitutional validity of a law making it mandatory for citizens to link their Permanent Account Number with Aadhaar unique identity.A bench of Justices A K Sikri and Ashok Bhushan will decide on the validity of Section 139AA of the Income Tax Act which provides for compulsory quoting of Aadhaar for filing income tax returns and application for allotment of PAN from July 1.Though the court’s verdict will be confined to the validity of Section 139AA, the judgment will have wider implications as government authorities are expanding the ambit of Aadhaar by linking it to various other schemes.Justifying the law, the Centre termed Aadhaar an effective and fool proof tool to check tax evasion. However, civil society members challenged the provision and said it was a “draconian” law which will take away people’s right of privacy and allow the government to monitor the