NEWS HOUR 7th Nov– 13h Nov 2017
Weekly News Magazine
ITEMS IN GST BRACKET COME DOWN TO 50 FROM 277 Report by - Divyansh Singh
GST council on Friday remodeled GST tax structure slashing tax rates on some of the consumer items such as chewing gum, chocolates, deodorant, shampoo, detergents, shoe polish, nutrition drinks, marble, and cosmetics. These rates will come into effect from November 15. On the sidelines of the ongoing meeting in Guwahati, Bihar chief minister Sushil Modi told the reporters that from 15 November, only 50 items would face 28% GST. Cess on goods such as white goods, sin, and luxury has been retained at 28%. Eating out has become more affordable. For ac as well as non-AC hotels and restaurants, the Council has fixed tax rate at flat 5%, while outdoor catering has been fixed at 18% and rate for hotels below 7,500 per room has been fixed at 5%. Earlier there were 277 items in the 28% slab. Although the fitment came up with a plan of pruning it to 62 items but the GST council pruned it to more items. Now all types of preparation for women cosmetics, shaving and aftershave items, granite and marble, deodorants, washing powder, chewing gums and chocolates have been put in the 18% category. Paints, cement, luxury goods such as washing machines and air conditioners have been retained at 28% whereas tax rates on mattress, stove, blade, watches, fire extinguisher has been reduced to 18% from 28%. GST rate on pasta, jute and cotton hand bags has been cut to 12%from 18% while rate on fly ash and fly ash bricks has been reduced to 15%. This decision taken by the Council will have revenue implication of around 20,000 crore rupees. There is a concord that gradually 28% slab should be completely remodeled into 18% slab but itis bound to take time as it has huge revenue implications. Meanwhile, according to the reports, it has been found out that the aggregate loss of
This rejig in the GST structure will have revenue implication of around Rs. 20000 crore
In This Issue
Major change in GST structure proposed by GST Council
Only 50 items remaining in the 28% tax slab
DEMONITIZATION ANNIVERSARY: BOUQUETS AND BRICKBATS
Some key points
The unprecedented and bold move has attracted many controversies since 8th November 2016
Digital payment industry witnessed a growth of more than 50% due to digitization campaign
9 million taxpayers added in the tax net
Income tax returns filed shot up 25.3%
Major changes in investment patterns across the nation
Report by - Rajesh Khanna
In a historic move, the prime minister Narendra Modi announced demonetization of Rs.500 and Rs.1000 banknotes with several positive motives in mind on November 08, 2016. The attempt is mainly aimed to clamp down black money and push the economy towards digital payments among other rationale but received a mixed reaction from different sectors of the economy. Soon after the bold move, Country came to a standstill, and the hullabaloo created by the disruption is still remembered by every citizen of India on its first anniversary. The effects started from slowing down the economic growth of the country across sectors to giving people nightmares of standing in a long queue for changing a petty amount and the inability to spend the liquid cash freely and save it for emergency purposes. Being an ex-banker, I directly realized the pain caused by the move to both public and banks where the cash gets drained within 3 hours, and the scuffle between public and branch officials continues till the end of the day. It also pummeled the profit of every bank in the country, and share prices of banks faced a steep decline as the move literally stopped every day-to-day process of the banks including disbursement of new loans, ATM operations (most of the ATMs were closed) and even NPA recovery. The GDP growth was halted tremendously by hitting a three year low to 5.7% in April-June. Though the hardships faced were comparatively large, there are certain positive outcomes emerged from the move. The government took the opportunity to realize its vision of cashless economy as the Digital payments industry witnessed a growth in the range of 50-70% and the volume of digital transactions for October 2017 alone stood around Rs.50000 crore. It also pushed the excess cash circulation into banks which have, in turn, enabled banks to pass on the interest rate cut by RBI to its borrowers which empowered the business activities and development The number of Income tax returns filed by individuals shot up 25.3%, and more than 9 million tax payers have been added to tax net. It also helped in recognizing individuals in tax evasion as nearly 17.92 lakh individuals were identified for review since their Income tax profiles did not concur with cash deposits they made during the window. Terrorist activities have been reportedly decreased as they mostly preferred to have cash transactions to carry out their illegal activities. As bank deposits offered nominal returns, investors began to explore attractive avenues such as Equities and Mutual funds. MFs witnessed a massive increase towards equity funds as about Rs 1.46 trillion of net flow been amassed in 2017 till now with around Rs.5000 crore worth of SIPs swelling every month. Correspondingly, life insurance sector witnessed a surge of 113% in premium collection. Retail investors have started investing their surplus cash into viable stock investments by seeking suggestions from financial experts. The above reforms led to marginalize the informal economy which in turn reciprocates as one of the reasons for the growth of the stock market in India.
Source: Web
Some Key Points
This directive will guide foreign investor on where and how to invest along with complete procedure
Provision of late submission fees in case of late submission
Indian economy is estimated to grow to $7 trillion by 2028
Source : Web
FEMA NORMS EASED BY RBI TO INCREASE FOREIGN INVESTMENT Contact Us Give us a call for more information about our services and products FIC Publishing FI Club (Publishing Div.) IIM Rohtak (+91) 94250-79893 fi@iimrohtak.ac.in Visit us on the web at www.iimrohtak.ac.in
Report by - Ruchit Chaudhary
RBI (Reserve Bank of India) has issued a directive for combining all the 93 amendments of FEMA (Foreign Exchange Management Act), 1999 into a single notification, a move that will ease the norms for foreign investment. It includes the combination of FEMA 20, which is related to investments in an Indian company or partnership, and FEMA 24, which is related to investments in a partnership firm, in the notification. This directive, issued by RBI, will help foreign investors in making informed choices on investments as it will guide them on where and how to invest along with the complete procedure and relevant authority related to the reporting of these investments. Other provisions that have been added include provision for late submission fees in case of late reporting, which make up for 60% to 70% of contravention cases registered with the RBI, and transfer of investments from non-resident Indians to any nonresidents being brought under the automatic route, subject to proper reporting..
Background on FEMA:
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FEMA is an Act of Parliament that was enacted to monitor and regulate the foreign exchange market in India while keeping in view the economic development of the country. It replaced the earlier FERA (Foreign Exchange Regulation Act), 1973 and brought about some changes in light of the LPG programme and India’s accession to WTO. It brings about changes in India’s foreign exchange policy making it a little less rigid than it was under FERA and making it comparable to international standards prescribed by WTO. It has also made all foreign exchange violations to be civil offenses, unlike FERA which had made all foreign exchange violations to be criminal offenses. This led to better regulation of foreign exchange with better compliance with norms and also provided the groundwork for Prevention of Money Laundering Act, 2002. Economists say that by 2028, India will likely surpass Germany and Japan to become the third largest economy in nominal dollar and this transition will be even quicker on PPP (purchasing power parity) basis. And for this demographics and macro stability have been stated as the backing strength for the country. It estimates that in 2028 India will be a $7 trillion economy as against $6 trillion for Japan and $5 tril-