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Better rated firms moving to bond mkt, says RBI report

Better rated firms moving to bond mkt, says RBI report Better rated companies are moving to the bond market, even as bank loans continue to remain an efficient financing tool for lower rated firms, the Reserve Bank of India’s financial stability report said. Better rated companies can easily tap the bond market, and their borrowing costs are usually nearer the risk-free rate of sovereign treasury bills, rather than banks’ marginal cost of funds-based lending rate (MCLR). And, there is a significant differential, about 185 basis points between risk-free rates and the bank MCLR. One basis point is a hundredth of a percentage point If the risk-free rate (govt securities) is 6.57 per cent for five-year money, AAA-rated companies, on an average, raise their fund at 7.39 per cent from the market. The bank MCLR is 8.41 per cent for the tenure If a company with A rating has to raise funds from the market, the coupon it has to pay would be 10.2 per cent, according to the RBI. This sho

HC notice to govt on double taxation

HC notice to govt on double taxation The Delhi High Court has issued notices to the Union government, the GST Council and the Central Board of Excise and Customs (CBEC) over the issue of double taxation on imported goods sold from one Customsbonded warehouse to another. The matter would come up for hearing on March 8.Abhishek ARastogi of Khatian &Co said the issue relates toaCustoms circular that has raised fears of the government imposing integrated goods and services tax (GST) twice on these kinds of transaction. Also, the company paying the taxes will not be able to get input tax credit, he said.Suppose a company imports goods and keeps it in its Customs bonded warehouse.It then sells it to another company which keeps the goods in its own bonded warehouse.The second company will have to pay integrated GST (IGST) twice and Customs duty. Also since the first company has not paid duties, the second one will not get the credit.Petitioner Aditya Mody of Devashish Polymers said, “

Tax department amends rules on addresses

Tax department amends rules on addresses The Central Board of Direct Taxes (CBDT) has issued a notification to track taxpayers, who are not reachable on address available with tax officers through the PAN database. By this notification, CBDT has amended the relevant income tax rules and now the tax authorities can send notices to such taxpayers at any address which is mentioned and available elsewhere such as banks, post offices, insurance companies, other wings of the income tax department, any other government authority or local authority. Shailesh Kumar of Nangia &Co said the new rule will not only help the government reach taxpayers, who willfully try to avoid notices, but will also help those honest taxpayers, who inadvertently miss getting their new address updated in income tax records. The Business Standard, New Delhi, 23rd December 2017

Government introduces bill on GST compensation cess in Lok Sabha

Government introduces bill on GST compensation cess in Lok Sabha The government today introduced a bill in the Lok Sabha that would replace an ordinance wherein tax rates on various motor vehicles were hiked to a maximum of 25 per cent under the Goods and Services Tax (GST). Finance Minister Arun Jaitley introduced the GST (Compensation to States) Amendment Bill, 2017.An ordinance to hike the GST cess on a range of cars from mid-size to hybrid variants to luxury ones to 25 per cent was issued in September. The bill would replace the ordinance. Explaining the details, Jaitley in the bill's Statement of Objects and Reasons said the GST Council meeting on August 5 had recommended a 10 per cent increase in the maximum rate at which compensation cess can be collected on certain motor vehicles.The tax rate was to increase to 25 per cent from 15 per cent. In this regard, the maximum rates were to be increased immediately by amending the GST (Compensation to States) Act, 2017 bef

Govt may allow 100% FDI in telecom via automatic route

Govt may allow 100% FDI in telecom via automatic route The government is finalising a plan to allow 100 per cent FDI for telecom services through the automatic route which allows firms to attract foreign funds without its approval, sources said today. The proposal is likely to be considered by the Telecom Commission, the apex decision making body of the Department of Telecom, at its meeting scheduled for tomorrow, they said."The TC is likely to consider raising of FDI limit up to 100 per cent for all telecom services including infrastructure through automatic route," a source said. At present 100 per cent FDI is allowed, of which up to 49 per cent investment in a company can be done through the automatic route. The inflow of overseas investment beyond that requires government approval because of security reasons.The panel is also likely to discuss the relief package recommended by an inter-ministerial group (IMG) for the telecom sector which is reeling under debt of a

More changes to bankruptcy code likely in Budget

More changes to bankruptcy code likely in Budget The government will fix a few urgent problem areas in the insolvency ordinance when it is brought to Parliament in the ongoing session but is likely to make substantive changes to the law in the upcoming budget after the panel looking into the Insolvency and Bankruptcy Code (IBC) makes its recommendations. The government had last month issued an ordinance to list eligibility condition for those participating in the resolution process of insolvent companies, barring promoters of such companies from bidding for the company or its assets. The government has also set up a committee to identify areas that need to be addressed after seeing the working of the insolvency code for about a year. "Some of these changes could be brought in as part of the finance bill," a top government official told ET. As ET had reported earlier, there are two changes that the government may introduce to the law in the ongoing winter session. Th

Full I-T e-assessment from next year; CBDT forms committee

Full I-T e-assessment from next year; CBDT forms committee The government is set to roll out a pan-India "faceless and nameless" e-assessment procedure for income tax payers from 2018 with the CBDT today constituting a high-level committee to prepare a quick roadmap for the implementation of this ambitious proposal. The Central Board of Direct Taxes (CBDT), the policy- making body for the Income Tax Department, notified a nine- member committee--headed by a Principal Chief Commissioner rank officer -- and has set for it a deadline of February 28, 2018, for submitting its report. "The deadline of February end to the committee is an indication that the government and the CBDT want to usher in this new regime from the first half of the new year," a senior tax officer privy to the development said.The committee is being constituted as the "department is embarking upon the concept of a faceless and nameless e- assessment procedure", the CBDT order, issu