Fiscal Policy 08 Aug 2017 by Tojo Jose

Tax filings and advance tax payments goes up on demonetisation impact

Tax filings and advance tax payments goes up on demonetisation impact

Trends on tax filings indicate they have gone up significantly during the post-demonetisation. While the tax filings increased by nearly 25%, advance tax payments increased by a whopping 42%. According to the Ministry Finance estimate, the number of income tax returns filing increased by nearly 25 % this fiscal. The ITR filing increased by 24.7% pushing the total return filings to 2.82 crores from 2.26 crores during the corresponding period in 2016-17. The number of filings by individuals reached 2.79 crores, registering an increase of 2.22 crores. “As a result of demonetisation and ‘Operation Clean Money,’ there is a substantial increase in the number of Income

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Monetary Policy 14 Jul 2017 by Tojo Jose

Slide in CPI all set to invite RBI’s rate cut

Slide in CPI all set to invite RBI’s rate cut

The Consumer Price Index’s 1.54% inflation rate recorded for June 2017 is the lowest since the start of the index in 2012. According to the CSO release, inflation rate during the month was pulled down by food prices led by vegetable items like tomatoes, pulses and potato. This is the third month in a row that food prices brought down the CPI. The index has registered an inflation rate of 2.18% in May 2017. Present slide in prices is well outside RBI’s predictions. The June 2017 monetary policy review which sets the inflation forecast for the coming year predicted a CPI inflation range of 2% to 3.5 per cent for the first half of fiscal year 2017-18. Now it reached 1.54

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Fiscal Policy 05 Jul 2017 by Tojo Jose

Government warns companies on profiteering while making price adjustment with GST

Government warns companies on profiteering while making price adjustment with GST

Government today warned the retailors and manufactures against any profiteering during the GST transition phase. Companies should reduce the price for goods where the GST rates have come down. Only goods that ware manufactured before July 1 can be sold at the GST impacted higher price according to the Revenue Secretary Hasmukh Adhia. Profiteering means retailors are not transferrin the reduced tax in the form of a reduced price to the consumers. Manipulation of prices on stocks is the route for profiteering. Government has decided to create an anti-profiteering authority during the transitional period. A five-member National Anti-Profiteering Authority, headed by a secretary-level

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Fiscal Policy 03 Jul 2017 by Tojo Jose

GST’s customization: India’s own version may test businesses’ adaptability

GST’s customization: India’s own version may test businesses’ adaptability

The GST is considered to be the ultimate tax reform in indirect taxes globally. Several countries have adopted it and those who have unitary financial structure or where there is only one central government, GST launch is rather simple. But in India’s case, the situation is much different. Merging of central and state taxes needed constitutional arrangements and political consensus. Indian conditions are also much different with the business communities consists of largely small and medium enterprises that have several hurdles to establish and manage the GST infrastructure. It doesn’t mean GST is a higher order reform given the capability of the business community. Ra

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Fiscal Policy 02 Jul 2017 by Tojo Jose

GST on the first day: biggies get ready; small firms struggles

GST on the first day: biggies get ready; small firms struggles

The first day of GST indicates difficulties for small firms as most of them report lack of idea about tax implications on inputs and components they are selling. Customers on the other hand, have started to adjust with the higher rates on some of the popular items like movie tickets where the tax rate gone to the peak 28%. Several small firms and sellers issued multiple bills to the same customer as the commodity they have bought have different tax outgo. Lack of proper idea about the exact tax implication were reflected across businesses. Bigger entities and that selling high value consumer durables like car and electronics adjusted to the new tax system quickly. Reports from va

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Fiscal Policy 30 Jun 2017 by Tojo Jose

India enters the GST era

India enters the GST era

The Goods and Services Tax (GST)’s life starts on July first as the centre and states decided to merge more than a dozen of their small and big taxes under it.  Now, nearly 70% of the country’s indirect tax revenues are covered under the GST. Importance of the event is well reflected as the Parliament is going to hold a midnight function on its launch. The rare gesture shows the pain and effort taken by the centre and the states to give away their pet taxes since independence while creating the GST. GST is rightly one of the biggest reforms since 1991 New Industrial Policy and the biggest tax reform since independence. It had the conceptual launch in 2000. But it

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Monetary Policy 23 Jun 2017 by Tojo Jose

RBI warns banks to address big NPAs or to face action on insolvency procedures

RBI warns banks to address big NPAs or to face action on insolvency procedures

The Reserve Bank of India has warned banks to address big NPAs or face procedures under the new Insolvency and Bankruptcy Code on these accounts. In a communique to banks, the RBI urged settlement of 55 high value NPA accounts within six months. Earlier, the RBI’s Internal Advisory Committee (IAC) has identified 12 big NPA accounts that need immediate action. These NPAs accounts for nearly 25% of total NPAs of the banking system. The warning by the RBI comes after the government gave it the power to direct lenders to initiate the insolvency and resolution process in the event of default. According to experts, the RBI got power to initiate actions on NPA front as per the new

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Monetary Policy 15 Jun 2017 by Tojo Jose

Insolvency regime for financial Sector: RBI’s power to come down

Insolvency regime for financial Sector: RBI’s power to come down

The Cabinet has ratified an insolvency regime for the delicate financial sector. As per the Financial Resolution and Deposit Insurance Bill 2017, financial sector entities including banks, insurance companies and other entities related to the sector will come under the regime. The proposed Resolution Corporation under the regime interestingly gets the authority over Deposit Insurance. Besides it will get power to implement decisions related to financial stability which now comes under the RBI.  After the global financial crisis, major regulators in the West have enacted resolution regime that aims to rehabilitate financial sector entities that have a potential for failure. T

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Monetary Policy 13 Jun 2017 by Tojo Jose

CPI inflation registers its lowest since 2012

CPI inflation registers its lowest since 2012

Retail inflation measured by the CPI has recorded its lowest since 2012 when the index was launched. The new low was caused by contraction of food prices. According to the CSO’s inflation statistics published on Monday, inflation during May was 2.18%. inflation figure was 2.99% during the previous month (April). The current nationwide CPI unifies was launched by the CSO in 2012. Since then, the index has become the anchor index measuring inflation surpassing the significance of the WPI. According to the CSO data, decline in food prices has brought down the price rise. The Food and Beverages category recorded a price contraction of 0.2%. In another data published along wit

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Fiscal Policy 12 Jun 2017 by Tojo Jose

GST: tax rate on 66 items reduced and relief to small enterprises enhanced

GST: tax rate on 66 items reduced and relief to small enterprises enhanced

The GST Council’s 16th meeting on Sunday has brought down tax rate on 66 items in a fine-tuning exercise. The Finance Minister after the meeting also raised the exemption limit for the concessional composition scheme from Rs 50 lakh to Rs 75 lakh. Revision of other deserved items including that on hybrid cars are expected in the next meeting Items for rate cut Finance Minister Arun Jaitely who chaired meeting revealed the 66 items whose rate has been brought down. These include insulin, cashew nuts, pickles, ketchup, agarbattis, children’s drawing books, tractor components and others etc. Tax rate on children’s books were brought down from 12% to nil. For cine

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