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First Collection Nos Show GST Off to a Smooth Start

Integrated GST collection on imports in line with expectation, crosses 4,000 cr in first 10 days

The first set of numbers after the rollout of the goods and services tax should calm any jitters about its prospects. Integrated goods and services tax (IGST) collections on imports in the first 10 days of the new regime crossed .? 4,000 crore, in line with expectation and suggests that the rollout has been largely smooth.

“Collections would have crossed ? 4,000 crore... Data is pouring in and final tabulations will be available in some time,” a senior government official told ET.

These collections exclude levies on petroleum and natural gas products, which aren’t covered by GST in any case. Besides, the final numbers will include collections from manual filings. GST came into effect July 1.

In July 2016, total customs collections amounted to .? 16,625 crore, which on average yields ? 5,360 crore for the 10 days, but that includes basic customs duty.
The go up when manual filings are also adde…

Sebi expresses concern over high derivatives to cash turnover

The Securities and Exchange Board of India (Sebi) has expressed concern over high equity derivatives turnover visàvis cash turnover.For every one rupee of cash turnover, Rs 15.6(notional value) of derivatives is traded.

The derivatives to cash turnover in India is the world´s second highest, after South Korea, where it is 24 times.Australia, Japan and Spain have a derivatives to cash ratio of less than five.

The markets regulator has also raised concern overalot of individual investors dealing in the derivatives space without understanding the risks.Sebi on Wednesday
issued a discussion paper on ´Growth and development of the equity derivatives market in India´.

“Orderly growth, development and alignment of both cash and derivatives markets is important,” it has said. “The discussion paper has been prepared to undertake an assessment of the derivatives market in India, to evaluate whether there isaneed to further strengthen the regulatory framework.” Sebi has given market participants ti…

Selling old jewellery or bullion will attract 3% GST

So, if old jewellery worth Rs 1 lakh is sold, a GST of Rs 3,000 will be deducted

Selling of old jewellery or bullion will attract a 3 per cent GST on the value realised, Revenue Secretary Hasmukh Adhia said on Wednesday.

But, if the jewellery is sold and new one bought through the proceeds, the 3 per cent tax paid will be deducted from the goods and services tax (GST) payable on buying new jewellery.

“Supposing I am a jeweller. Somebody comes to me with old jewellery, it is as good as buying gold. You can later claim input tax credit,” he said at the GST Master Class.

Explaining further Adhia said a jeweller buying old jewellery from someone will charge 3 per cent GST under reverse charge. So, if old jewellery worth Rs 1 lakh is sold, a GST of Rs 3,000 will be deducted. If the proceeds from the old jewellery is used for buying new jewellery, the tax paid on sale will be adjusted against GST on the purchase, he said.

However, if an old jewellery is given to the jeweller for some modificati…

GST clouds over FMCG may get darker in september quarter

The prospect of a tougher September quarter looms large for fast-moving consumer goods (FMCG) companies, as the full impact of the transition to the goods and services tax (GST) is likely to be felt during this period. While the June quarter saw trade destocking in the last 10 to 15 days of the period, companies and analysts Business Standard spoke to said the problem would persist for a longer duration in the three months to September 30. “GST is a huge reform and transition will take time. While our internal systems are ready, transition (within wholesale) will take another 30 days (to be completed),” Sunil Kataria, business head, India and South Asian Association for Regional Cooperation, Godrej Consumer Products, said.

"GST is a huge reform and transition will take time. While our internal systems are ready transition (within wholesale) will take another 30 days (to be completed)," Sunil Kataria, business head, India and South Asian Association for Regional Cooperation, …

Restriction likely on import of items that hit local companies

India is looking to impose restrictions and standards on products where imports have replaced domestic production, an attempt to give a push to 'Make in India' programme and reduce the widening trade gap.  The commerce department has instructed various ministries to analyse data and compile lists of products which are being produced domestically but losing market share to imports.  The Bureau of Indian Standards (BIS) has been assigned the task of setting standards that will have to be met by imported goods as well as goods manufactured in the country. "We need to do an analysis of the deficit before putting any technical restrictions because there are certain areas where we do not have domestic production," said an official aware of the development.  Medical devices, solar cells, ceramics, plastic wares and toys, among other products, may be subjected to manda ..  Most line ministries, especially those which have a regulatory role such as textiles and health, along with…

No GST on free food supplied by religious institutions

The government on Tuesday said free food supplied in anna kshetras (food areas) run by religious institutions have been kept out of the goods and services tax (GST) ambit.Besides, prasadam distributed by religious places of worship like temples, mosques, churches, gurdwaras and dargahs, would not attract any GST.Clarifying on media reports which suggested that the GST would be levied on free food supplied in anna kshetras run by religious institutions,afinance ministry statement said “this is completely untrue.No GST is applicable on such food supplied for free”.However, some of the inputs and input services required for making prasadam would be subject to the GST. These include sugar, vegetable edible oils, ghee, butter, service for transportation of these goods, among others.

Business Standard, New Delhi, 12th July 2017

GST launch should pave way for repo rate cut

The RBI could wait for CPI inflation to settle and then reduce the repo rates. Or it could take a calculated risk by cutting the rates immediately

In the meeting held on June 7, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) decided not to cut the repo rate. The lone dissenting voice was that of IIMA professor Ravindra Dholakia, who wanted the repo rate to be reduced by at least 50 basis points from the present 6.25 per cent. The RBI, too, has reasons to abstain from a repo rate cut. After signing the new Monetary Policy Framework Agreement with the Union government in February 2015, the responsibility of maintaining Consumer Price Index (CPI) inflation becomes the only factor in deciding the repo rate.

As per the agreement, it is mandatory for the RBI to maintain CPI inflation at four per cent, plus or minus two per cent, from FY 2017-18 onwards. However, the track record of the Indian economy shows that in the last 20 years average CPI inflation was about 6.7 …