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HIGH ON GROWTH, LOW ON CASH While the central bank maintained its neutral stance and held policy rates, it revamped merchant discount inapush foralesscash economy Liquidity to remain comfortable: RBI The Reserve Bank of India (RBI) has permitted overseas branches and subsidiaries of Indian banks to refinance the existing external commercial borrowings (ECBs), giving them a level playing field visàvis their global counterparts.They can refinance ECBs of AAA rated companies as well as Navratna and Maharatna public sector undertakings, by raising fresh ECBs, the RBI said in a statement on developmental and regulatory policie "The decision in allowing subsidiaries of Indian banks abroad to refinance AAArated corporates will provide a fair and just opportunity to Indian banks to book and retain good quality assets," State Bank of India Chairman Rajnish Kumar said.Currently, Indian corporates are permitted to refinance their existing ECBs atalower all in cost. The oversea

Importers of food cosmetics to get refund on excess GST Unsold inventory of imported chocolates, confectionery and cosmetics, which attracted 28% Integrated Goods & Services Tax (GST) during inbound shipments but are now retailing with an 18% levy, can claim refunds on the excess tax paid. “We have told importers that if they have imported goods at 28% and are selling them at 18%, they can claim a refund,” a senior official at the Central Board of Excise and Customs (CBEC) said. “They will, however, have to submit proof. We understand they have issues related to stickers.” All imports face customs duty and IGST (CGST+SGST), unless specifically exempted. Last month, the GST Council had slashed tax slabs on 178 products, including chocolates, confectionery, deodorants and shampoo, from 28% to 18%. Almost all Indian firms have dropped prices in relevant categories after the cut. “The reduction in GST rates for products imported at a higher rate may have some shortterm workin

No change in norms RBI defends inspection regim The Reserve Bank of India defended its inspection regime and said that the divergence between the actual numbers reported by the banks and its assessment of bad loans is nothing extraordinary, and it is not moving the goal post. The only difference now, the central bank asserted, is that banks are disclosing these numbers, unlike in the past. Speaking for the first time on the issue of banks reporting huge divergences at the end of the September quarter earnings, the Reserve Bank of India on Wednesday said that the banks had not followed RBI’s asset classifications rules to the tee. “I want to make it very clear that there has been no change in the goal post, the rules haven’t changed,” said NS Vishwanathan, deputy governor, RBI. “We have assessed the banks classification on rules as they are today. We have found that in some cases, they have not applied those criteria.” The RBI’s scrutiny of non-performing assets has raised sever

More incentives for exports focus on ease of trading Revised Foreign Trade Policy calls for move away from subsidies Commerce Minister Suresh Prabhu on unveiled more incentives to boost labourand employment oriented merchandise and services exports while releasing the much awaited mid term review of the Foreign Trade Policy 201520. The annual incentive increased by 33.8 per cent or Rs 8,450 crore This financial year (FY18), it will be an additional incentive of Rs 2,816 crore.This will benefit leather, handicraft, carpets, sports goods, agriculture, marine, electronic components, and project exports in merchandise, and legal, accounting, architecture, and education in services. Exporters demanded the incentives be extended to other products as well since they were facing challenging times because of demonetisation last year and the goods and services tax (GST) rollout this year.The policy, however, cautioned exporters that the current WTO rules as well as those under negotiatio

RBI policy meet begins decision on key rate today Reserve Bank of India Governor Urjit Patel headed Monetary Policy Committee (MPC) started two day deliberations on Tuesday amid several experts saying that the central banki s unlikely to lower the key interest rate and will stay focused on controlling inflation The MP Cmeeting out come on Wednesday is being keenly awaited by all stakeholders, including the industry and stock markets. In its October review, the MPC had kept the benchmark interest rate unchanged on fear so frising inflation, while lowering growth forecast to 6.7 percent for FY18. The Business Standard, New Delhi, 6th December 2017

Services PMI contracts as GST hits demand Services, the biggest sector of the Indian economy, contracted in November because of the goods and service tax (GST) affecting demand, shows the widely tracked Nikkei purchasing managers´ index (PMI). The PMI fell to 48.5 points in November from 51.7 in the previous month.The November reading is the lowest since August A reading above 50 points denotes expansion and one below that is contraction.This implies that the country´s growth story will take time to pick up significantly after economic expansion did rise to 6.3 per cent in the second quarter, from 5.7 per cent in the first one. Even then, the Reserve Bank of India might not cut its policy rate on Wednesday because input prices are rising.However, the employment situation gave relief as jobs rose in the services sector.“Business under performance emanated from the GST, which contributed to sluggish demand andalower customer turnout, according to an ecdotal evidence,” said Aashna

GST data may be used to track income tax evaders The government may be looking to use data obtained from Goods and Services Tax (GST) filings to track those who are escaping income-tax, two people close to the development said.The government is setting up a mechanism wherein data obtained through GST reporting could be correlated with the income-tax filings. While the project is still in the initial stage, the government wants to create a database whereby income of companies and their promoters could be matched with that of the tax returns filed, said a person in the know.It is still unclear whether the government would use this data to dig out tax evasions in the earlier years or whether this will only be for prospective tax scrutiny. Unlike the earlier tax regime, GST leaves a trail, especially for the business of size, and it becomes hard to underreport income or exaggerate expenses.Industry trackers said tax officers don’t have to go through the sea of data to make sense as