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FDI inflows in the servicesNSE -0.38 % sector declined by about 23 per cent to  USD  6.7 billion in 2017-18, according to the Department of Industrial Policy and Promotion (DIPP).  The sector had attracted FDI worth $8.68 billion in 2016-17. The services sector includes finance NSE 0.63 %, banking, insurance, outsourcing, R&D, courier, tech testing and analysis.  As far as overall FDI inflows are concerned, the growth rate recorded a five-year low of 3 per cent at  USD  44.85 billion in 2017-18.  According to Anis Chakravarty, Lead Economist and Partner, Deloitte India, the slowdown in FDI could be because of re-routing of investments to economies like the US which witnessed an increase in interest rates together with a stronger dollar.  "Expectations of further rate hikes by Fed, along with the tariff issues, this year can be expected to result in a further slowdown in foreign inflows.  "The declining growth rate of FDI is more of an exogenous effect and the policy m

FOCUS ON SERIOUS CASES UNDER COMPANIES ACT Committee will look at decriminalising certain offences & resolving most cases without approaching courts The government is looking to decriminalise some of the offences in the Companies Act of 2013 so that courts are freed of these cases to focus on more important ones.  The ministry of corporate affairs (MCA) has set up a 10-member committee to review the penal provisions in the Act.  The committee, to be headed by the MCA secretary, may propose decriminalisation and suggest ways in which to replace the provisions with an in-house mechanism, where a penalty could be levied in instances of default. “This would also allow the trial courts to pay more attention on offences of serious nature,” MCA said in a statement. The committee, which has Uday Kotak, Shardul S Shroff, Sidharth Birla and Bankruptcy Law Reforms Committee chairman TK Vishwanathan among its members, will submit its report with recommendations within 30 days to the go

The GST amendments will be tabled in the upcoming monsoon session of Parliament beginning 18 July The government is likely to retrospectively amend laws governing the goods and services tax (GST) to deny transitional credit to taxpayers against cesses levied in the earlier indirect tax regime.  If it goes through with its plan, the Narendra Modi government will be going back on its promise of not making retrospective amendments to tax laws that have an adverse impact on taxpayers. The proposed amendment to the GST law seeks to explicitly exclude cesses levied in a pre-GST regime from allowable transitional credit that can be claimed by companies. Under the transitional credit provision, companies were allowed to claim tax credit against levies such as value added tax and service tax on stock purchased before implementation of GST for a limited period.  Many companies availed the transitional credit facility seeking input tax credit also for cesses such as the Krishi Kalyan cess p

Financial institutions and banks have introduced various modes of electronic payment facility Sebi on Thursday barred stock brokers from directly accepting cash from their clients as it looks to promote digital payments. Besides, stock brokers are not permitted to receive cash deposits in their bank accounts from clients. "In view of the various modes of payment through electronic means available today, it is directed that stock brokers shall not accept cash from their clients either directly or by way of cash deposit to the bank account of stock broker," the regulator said in a circular. According to Sebi, all payments would be received or made by stock brokers from/ to the clients strictly by account payee crossed cheques or demand drafts or by way of direct credit into the bank account through electronic fund transfer, or any other mode permitted by the Reserve Bank of India (RBI).  GST: Ministerial panel favours deferment of sops for digital payments "The sto

The central government wants to impose the levy; many states are opposed - at least, to the Centre doing so  Is it legally permissible to impose the goods and services tax (GST) on extra-neutral alcohol (ENA), an input in liquor making?  No one is quite sure at the moment. For, alcohol for human consumption or potable alcohol is outside GST. While, industrial alcohol is within it. The central government wants to impose the levy; many states are opposed – at least, to the Centre doing so. They see this as their own prerogative; – they currently levy value-added tax (VAT) and sales tax on ENA. There is, however, counter-pressure from businesses. The pharmaceutical industry, for one, has been demanding inclusion of ENA within GST – if this happens, they can get input tax credit. Advance ruling in GST: Classification-related disputes top the list One company, Madhucon Sugar and Power, went to the Authority on Advance Rulings (AAR), an official body which is empowered to render an o

A slowdown in demand from developed countries; Indian exporters urge the government to sign  India’s apparel exports are estimated to have declined by 17 per cent in the first quarter of FY19 due to a slowdown in demand from developed countries following weak economic activity there. Data compiled by the apex industry body, the Clothing Manufacturers’ Association of India (CMAI), showed India’s apparel exports at Dollar 1.35 billion and $1.34 billion in April and May 2018, a decline of 23 per cent and 17 per cent respectively. During FY18, apparel exports from India fell by 4 per cent to Dollar 16.72 billion. Starting in June 2017, after the goods and services tax (GST) was implemented, and resulted in the blockage of working capital due to delay in refund of state levies and other mandatory refundable taxes, the slowdown in overseas pick continued till the first quarter of the current fiscal. “India’s overall apparel exports are estimated to have declined by 17 per cent in t

The recommendations of the ministerial panels will be placed before the GST Council, chaired by the Union Finance Minister and comprising his state counterparts, during its next meeting on July 21 The Sushil Modi-led ministerial panel will recommend to the GST Council to defer by a year the proposal to incentivise digital payments under the goods and services tax (GST), citing revenue implications of doling out the concessional tax rate. At its meeting on Sunday, the panel has decided to wait for stabilisation of revenues under GST and the new return filing systems in the current financial year, before considering differential GST rates for people making payments using the digital mode. Besides, another ministerial panel under Modi, on reverse charge mechanism (RCM), has decided to recommend powers to the GST Council to notify the registered persons who would come under the purview of the RCM. Advance ruling in GST: Classification-related disputes top the list The recommendatio