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Relief for MSMEs hit by GST The Reserve Bank of India (RBI) has announced two relief measures for micro, small and medium enterprises (MSMEs) by providing them additional time to repay banks, and removing the credit limit on MSMEs in the services sector, which falls under the priority sector. The central bank has instructed banks and nonbanking financial companies (NBFCs) to allow MSMEs registered under the goods and services tax (GST) to repay their dues occurring between September 1, 2017, and January 31, 2018, within 180 days of their due date. This extension is applicable only to MSMEs, which were standard as of August 31, 2017, and for which the aggregate exposure does not exceed Rs 250 million as of January 31. “The formalisation of business through registration under the GST adversely impacted cash flows of the smaller entities during the transition phase, with consequent difficulties in meeting their repayment obligations to banks and nonbanking financial companies,” th

RBI signals long pause, flags inflation risks Five MPC members vote in favour of status quo; one votes for 0.25% rise The Reserve Bank of India (RBI) kept policy rates unchanged for the third consecutive time. Governor Urjit Patel indicated that the recent rise in bond yields was beyond the control of the central bank and a result of fiscal profligacy by the government and the rise in rates in advanced economies. Patel’s post-policy statement assumes significance for interest rates in the economy; particularly when his deputy Viral Acharya said RBI was not there to provide liquidity to manage bond prices. According to bond dealers, the statements indicate the RBI was not interested in yield management anymore and the government will have to heed the market. This could mean a yield push up, which will eventually feed into the bank lending rate at a time when the RBI is working on linking the lending rate to a more market-driven external benchmark. “Now the RBI has made it clea

Regulator tweaks insolvency rules to raise bid value The insolvency regulator has amended rules to prevent low bidding for stressed assets being restructured through the National Company Law Tribunal (NCLT). Through a notification, the Insolvency and Bankruptcy Board of India also virtually shortened the period for resolution professionals to present a resolution plan to NCLT from the present 270 days to 255 days. To prevent low bids, the regulator said two valuers will determine the liquidation value and the fair value of a company being restructured.Earlier, in one of the resolution cases, it was found that the valuation done by the valuer was incorrect.As a result, the resolution professional was changed and he appointed a new valuer Also, now neither the fair value nor the liquidation value will be known to bidders.The rationale is that bidders were making offers around the liquidation value as it was known to them.Liquidation value is usually less than fair value and is ar

Rs 57-mn GST evasion unearthed in 16 cases in five months of FY18 The minister further said tax department takes appropriate action in suitable cases for evading taxesThe government has unearthed goods and services tax (GST) evasion to the tune of Rs 57 million in 16 cases in just five months of the ongoing financial year. GST was introduced on July 1, 2017. It subsumed over a dozen central as well as local taxes, including excise and service tax, taking the country to one-nation, one-tax regime. As per the inputs provided by the finance ministry, the government has detected GST evasion to the tune of Rs 57 million in 16 cases during July-November 2017-18, Minister of State for Corporate Affairs P P Chaudhary said in a written reply to Rajya Sabha. In addition, it has found service tax evasion of Rs 96.6 billion in a total of 2,938 cases during April-December of 2017 -18. Further, the government has discovered evasion of central excise to the tune of Rs 72.4 billion in 614 case

Centre looks at phased roll out of e way bill The central government is looking at backup options to introduce the electronic way (eway) bill inaphased manner.It was to be implemented from February 1, but the Centre had to defer it indefinitely as businesses faced disruptions after the portal crashed.The bill, said sources, can now be introduced after safeguard options are installed for the portal´s smooth working. In January, the Goods and Services Tax Council decided to advance the introduction of the bill from February 1 for interstate movement of goods valued above Rs 50,000 from the earlier April 1. It gave freedom to states to introduce the bill for intrastate movement of goods beyond 10 km by July 1. However, 13 states had volunteered to implement the bill for intrastate movement of goods from February 1 itself.Given the wide applicability of the eway bill system, ClearTax Chief Executive Officer Archit Gupta said its stability and performance are critical to its complia

CBDT No notice to taxpayers in case of minor I-T return filing mismatch The tax man will no tissue demand notice to tax payers incase there is a minor  mismatch between their income tax return and the corresponding tax credit data. The measure, introduced in  the Financial Bill, is aimed at providing relief to salaried tax payers and ease issues of discrepancies that crop up between the information on Form 16(provided by the employer) andForm26AS (taxcredit statement received by the tax department). The Business Standard, New Delhi, 07th February 2018

Centre´s GST relief to states at Rs  900 billion The Narendra Modi government has budgeted for Rs 900 billion to be paid as compensation to states to make good their losses on account of the goods and services tax (GST) in 201819.This represents a 47 percent increase over the Rs 613 billion it plans to distribute in 2017-18. The compensation comes to 3.6 per cent of the 201819 Budget size of Rs 24.4 trillion. According to the mediumterm fiscal policy statement (part of the Budget documents), the Centre has also projected a compensation cess outlay of Rs 900 billion each for 2019-20 and 2020-21. These however, are provisional projections and will be subject to change in future Budget The compensation cess is levied on high value items like luxury cars and demerit goods such as tobacco.By law, the Centre has to provide compensation to states for their revenue losses on account of the GST for five years.The Budget documents also make it clear that the amount earmarked for the comp