CA Online

GST revenues: Growing uncertainty Sluggish GST revenues would mean higher government borrowing and consequently a worsening fiscal deficit position A delayed implementation of the e-way bill will allow more preparation time to businesses already fed up with the government’s ad hoc decisions on the subject. On the other hand, it leaves one wondering how long it will take for GST (goods and services tax) revenue collections to finally stabilize. Wary of declining GST revenue collections, the GST Council in December last year advanced e-way bill implementation from its originally scheduled date of 1 April to 1 February 2018. Trial runs that began on 15 January were fairly successful, say tax experts, who were hopeful that unlike GST returns filing, history would not repeat itself with the e-way bill website. But the e-way bill portal failed the litmus test and yet again, the roll-out had to be deferred. Last week, the group of ministers overseeing GST-related developments recomm

Govt to ease FPI rules in bid to attract foreign investment The government will reduce time required for FPIs to register in India, introduce a single-window clearance for them and allow foreign banks to trade on behalf of their clients without registeringThe government plans to cut red tape and ease rules for foreign portfolio investors (FPI), as it seeks to attract more investments into Asia’s third-largest economy, three people with direct knowledge of the matter said. As part of the plan, the government will reduce the time required for FPIs to register in India, introduce a single-window clearance for them and allow foreign banks to trade on behalf of their clients without registering, the people said, requesting anonymity.The steps come at a time when Indian exchanges have decided to stop sharing market data feeds with overseas exchanges to prevent a flight of liquidity from the country. That decision has been criticized by market participants, including index provider MS

UPI-based system mulled for retail investors in IPOs The securities and Exchange Board of India (Sebi) is considering introducing a UPI-based payment system for retail investors in initial public offerings (IPOs), a move that will help do away with cheque payments and reduce the time taken between the closing of an IPO and listing of the security to just three days. Sources in the know said Sebi and National Payments Corporation of India (NPCI), which manages the UPI (unified payments interface) protocol, were studying the feasibility of the proposal. Initial feedback received by the market regulator from stakeholders was that the project could be executed with a few tweaks to teh current payment framework, said a source The UPI system developed  to promote digital payments in the country . enables instant and seamless payments frome one bank account to another through a mobile-based application. The platform is rapidly gaining acceptance, with over 70 banks being empanelled. A

Individual angels may get tax relief too The government is considering exempting investments made by individuals in certain startups from the so-called angel tax to provide a level playing field with other angel investors and to nudge high net worth individuals to back innovation.The Department of Industrial Policy & Promotion is working with the finance ministry on the details of the proposed exemption. The department has held several meetings with angel investor networks and startups to finalise the new framework. “We felt that investments by individuals who may not be part of the angel network also deserve to get the tax benefit since they are also playing a role in building the startup ecosystem in the country,” a senior government official told ET. Angel tax of about 30% is levied on the amount that exceeds the fair market value of shares issued by unlisted companies, which is treated as income from other sources. However, the levy has startups concerned over the possi

CIC raps GSTN for lack of order, seeks clarity on info disclosure Goods and Services Tax Network (GSTN), the IT backbone of the new tax regime, has attracted the ire of Central Information Commission (CIC), which has directed the company to set its house in order and update information in public domain. CIC has taken a grim view of the functioning of GSTN, a company with 1,200 employees managing the entire network.Hearing an appeal filed by applicant R K Jain, who had sought information under the Right to Information Act (RTI) on GSTN’s HR policy and voluntary disclosure of information, Information Commissioner Bimal Julka said, “It is appalling to learn that an important, significant and critical area concerning the implementation of GST Network still required streamlining and consolidation, which needs to be attended to forthwith in the larger public interest”. The commissioner’s observation follows facts that emerged during hearing of the case. Jain had put forward documents

Government borrowing cost likely to fall, thanks to EPFO Borrowing costs for the Centre and the states may reduce in FY19 after India allowed the country’s biggest buyer of organized debt to buy less of corporate bonds and increase instead the allocations toward sovereign paper. The Employees’ Provident Fund Organisation (EPFO), which manages more than Rs 10 lakh crore in superannuation funds and is India’s largest domestic buyer of debt, now needs to allocate a minimum of 20 per cent of its portfolio to corporate bonds. That threshold, earlier set at 35 per cent, has been reduced because of the lack of availability of quality corporate paper in the country. “Based on the rates, we will take prudent and meritorious investment decision in the interest of stakeholders,” said VP Joy, the central provident fund commissioner. “We have larger limits now for government bond investments.”Two weeks ago, ET reported that the EPFO requested the Centre to alter investment guidelines applic

Taxmen asked to step up collections to meet higher target Faced with a daunting target of Rs 10.05 lakh crore, the apex decision-making body for direct taxes, CBDT, has asked its field officers to step up efforts and put more focus on better performing zones. In the 2018-19 Budget, the government hiked the direct tax, which includes personal income tax and corporate tax, collection target to Rs 10.05 lakh crore from Rs 9.80 lakh crore budgeted initially.In a review meeting earlier this month, the Central Board of Direct Taxes (CBDT) set higher target for zones which are performing well. “We are looking at better advance tax collection for January-March quarter. If the trend of October-December quarter continues, we will be able to achieve the landmark Rs 10 lakh crore target,” an official said. The focus areas of the department for stepping up tax collection will be to follow up with entities which are currently giving taxes on the basis of self-assessment. “We will check if th