Loans
07:29
Showing posts with label GST. Show all posts
Showing posts with label GST. Show all posts
Thursday, 18 January 2018
Monday, 18 September 2017
State Bank of India
07:55
State Bank Of India reviewing minimum balance charges for savings accounts
State Bank Of India reviewing minimum balance charges for savings accounts
In rural areas, the monthly average balance requirement has been kept at Rs 1,000. Any shortfall in maintaining minimum balance in rural areas can attract penalty in the range of Rs 20 to Rs 50 plus GST
State Bank of India (SBI) said it is reviewing charges for certain categories of accounts for non-maintenance of monthly average balance (MAB) after receiving feedback from customers. In April this year, the country’s largest lender reintroduced charges on non-maintenance of monthly average balance (MAB) after a gap of five years. “We have received feedback from our customers on the issue and we are reviewing those. The bank will take into account those and make an informed decision,” the banks managing director (national banking group) Rajnish Kumar told PTI.
“We will internally debate whether any moderation for certain categories of customers like senior citizens and students needs to be done anywhere. The charges are never cast in iron.” As per the list of revised charges of SBI, failure to maintain monthly average balance in accounts will attract penalty of up to Rs 100 plus goods and services tax (GST). In metropolitan areas, there will be a charge of Rs 100 plus GST, if the balance falls below 75 per cent of the MAB of Rs 5,000. If the shortfall is 50 per cent or less of the MAB, then the bank will charge Rs 50 plus GST.
In rural areas, the monthly average balance requirement has been kept at Rs 1,000. Any shortfall in maintaining minimum balance in rural areas can attract penalty in the range of Rs 20 to Rs 50 plus GST. Kumar said the bank has over 40 crore savings bank accounts, which includes 13 crore of Basic Savings Bank Deposit (BSBD) and Pradhan Mantri Jan-Dhan Yojana (PMJDY) accounts. The bank has exempted BSBD and PMJDY accounts from maintaining the minimum balance requirement. Out of the 27 crore normal savings bank accounts, nearly 15-20 per cent are those where customers are not maintaining monthly average balance.
Source:Indian Express
Friday, 30 June 2017
ministry of Finance
07:44
GST: Bank and Insurance Companies
GST: Bank and Insurance Companies
From insurance premium to ATM transaction, banking will be expensive under GST
Ahead of the July 1 roll out of the Goods and Services Tax (GST), the government has repeatedly stated that the tax incidence on most goods and services will remain the same even if it does not come down. However, various sectors have raised concerns contrary to this claim.
One such area is of the financial services offered by banks and insurance companies, which are expected to pinch your pockets more under GST. Financial service charges include service charges on ATM transactions and Credit and Debit Cards, insurance premiums, EMI (Easy Monthly Installment) etc.
Under GST, financial services have been put under the 18 per cent slab, whereas currently customers pay 15 per cent service tax for them. Thus, a straight 3 per cent hike in your bills may be expected.
For example, if your annual premium for a Rs 1 crore term plan works out to Rs 25,000, GST will result in a tax burden of Rs 4,500, compared to Rs 3,750 currently.
Similarly, State Bank of India (SBI) charges Rs 50 plus service tax (15 per cent), for each withdrawal at banks beyond four free transactions. So, currently for withdrawing Rs 10,000, you need to pay a sum of Rs 1,550 ( Rs 1,500 as service charge plus Rs 50). Under GST, this transaction will attract a service charge of Rs 1,850.
Banks and insurance companies have already started to send out messages to its customers warning about the hike. SBI Card has sent SMS to its customers alerting about the higher incidence of tax.
"Important: The Government of India proposes to implement the GST which is likely to be effective from July 1, 2017. Consequently, the existing service tax rate of 15 per cent shall be replaced by a GST rate of 18 per cent," the SMS sent by SBI read.
An SBI official confirmed the same.
Banks like Standard Chartered and HDFC are also sending messages related to GST to their customers.
ICICI Prudential Life Insurance, in email messages to its customers, said premium payable on term policy and fund management charges on a Unit Linked Insurance Policy will attract 18 per cent GST post implementation of the new indirect tax regime.
GST is touted as the single biggest tax reform since India's independence in 1947 and is expected to add 2 per cent to India's GDP (gross domestic product). It aims to subsume the various central and state taxes that are currently levied on goods and services, bringing India under a uniform tax regime.
GST is set to be launched on the midnight of June 30 and July 1 by the President Pranab Mukherjee. Prime Minister Narendra Modi, Vice President Hamid Ansari, Lok Sabha speaker Sumitra Mahajan, members of Parliament and GST councils and chief ministers of all states have also been invited. Former Prime Ministers Manmohan Singh and H D Deve Gowda are also expected to grace the occasion.
Source:Times Of India
Wednesday, 2 November 2016
World Bank to soon rank cities on ‘ease of living’
World Bank to soon rank cities on ‘ease of living’
The World Bank Group will soon bring out an “ease of living” index that will rank cities globally, even as it is looking at tweaking the methodology used in its country-wise “ease of doing” business rankings to better capture reforms being carried out in large and diverse nations such as India.
The decision comes at a time when India has launched a mission to develop over 100 smart cities.
On the World Bank Group’s Doing Business index, India had suggested that reforms undertaken across the country and not just in Mumbai and Delhi be considered.
On the proposed ‘ease of living’ index to rank cities world-wide, Junaid Ahmad, World Bank Country Director, India, said, “One of the moot questions is that as you move more into high income [category], urban centres become extremely important, [including for] accommodation and so on. For cities to actually generate growth, the ease of living there has got to be very important.”
“We [the World Bank] have been working on it [‘ease of living’ index for cities] for several years now,” Mr. Ahmad said.
He said the methodology for the city-based index could be better than the Bank’s “ease of doing” business rankings.
The index could include categories on social inclusion, cost of living, public transport, housing, education, health, environment-friendliness, crime/safety, governance and corruption.
On the criticism regarding the World Bank Doing Business Report this year ranking India a lowly 130th despite several reforms being carried out by the government, Mr. Ahmad said the rankings did not capture important reforms including the laws on the Goods and Services Tax (GST) and insolvency and bankruptcy as they did not come before the cut-off date.
Agreeing that the existing methodology could be tweaked to better capture reforms in big countries such as India, he said, “Everything is dynamic, you learn, you change, you shift. There is no one fixed approach. It is always a challenge for any bureaucracy including ours to learn and to adjust.”
Mr. Ahmad said when reforms such as the GST and those on bankruptcy and insolvency were included in next year’s rankings, India’s rank would improve vastly.
‘India’s rating will improve vastly
once GST and insolvency reforms are considered’
Source:The Hindu
Wednesday, 26 October 2016
world bank
16:38
India 130th in World Bank’s ease of doing business
India 130th in World Bank’s ease of doing business
In the 2017 rankings released on Tuesday, the only major improvement for India was seen in the area of ‘getting electricity’.
India has moved one rank up to the 130th position in the World Bank’s ‘ease of doing business’ ranking for 2017. This marginal improvement came on the back of slight improvement in four indicators — getting electricity, enforcing contracts, trading across borders and registering property.
“Over the past two years, the government has implemented a host of reforms to make it easier for businesses to start, operate and exit. It is therefore disappointing that these achievements are not covered by the report due to methodological issues. The government has engaged with the World Bank multiple times in the process, and is hopeful that they will take into account all the implemented reforms in future reports,” said a government statement. India was last year ranked on 130th among 190 economies that were assessed over ten parameters.
Ramesh Abhishek, secretary, Department of Industrial Policy and Promotion (DIPP), said on Tuesday that a dozen of important reforms like enactment of bankruptcy code, GST, introduction of single window system for building plan approvals and online ESIC (Employees’ State Insurance Corporation) and EPFO (Employees’ Provident Fund Organisation) registrations were not recognized by the World Bank this year.
The DIPP, he said, will appoint external agencies “to help departments carry forward reforms, hold stakeholders consultations, and monitor implementation of reforms”.
In the 2017 rankings released on Tuesday, the only major improvement for India was seen in the area of ‘getting electricity’. “On getting electricity, the report recognised the efforts of Tata Power in Delhi to make it faster and cheaper to obtain a connection. These efforts, combined with efforts in Mumbai last year, have allowed India to improve its rank on this indicator from 137 to 26…,” said a government statement. India was ranked 51st for ‘getting electricity’ in 2016. In the area of ‘enforcing contracts’, the country’s ranking improved from 178 in 2016 to 172 in 2017.
“Our objective is that in the next 3-4 years, India must come in the top 30 countries as far as ease of doing business is concerned,” Amitabh Kant, CEO, Niti Aayog, had said in May, 2016.
Source:Indian Express
Thursday, 14 January 2016
seventh pay commission
09:22
Budget must re-energise tax reform
Budget must re-energise tax reform
In order to expand the tax base, it is necessary to ensure that more transactions are scrutinised
As the finance ministry's consultations continue for the Union Budget, it must realise that sticking to the path of fiscal consolidation and reform is vitally necessary. And achieving that goal depends on re-energising government revenue.
The biggest and most important change to the revenue side, of course, is not dependent on the Budget itself: It is the Goods and Services Tax, or GST, which has become a casualty of political deadlock. Finance Minister Arun Jaitley has indicated that he will bank on the support of the regional political parties to help him pass the GST legislation. Whether or not the GST Constitution amendment is passed in the Budget session, two things are clear: It will eventually be passed, since all parties accept it in principle, and that tax reform extends beyond the GST and cannot wait for it.
On the direct taxes front, for example, the finance minister in this year's Budget speech made the important and progressive announcement that the corporation tax rate would be reduced gradually by five percentage points to 25 per cent over the next four years, and that this would be accompanied by the closing off of the various exemptions that lead to companies paying less than the current 30 per cent. Unfortunately, that process was not begun this year, but it will presumably begin in the coming one.
There is an urgent need for a road map for reducing the tax rates, accompanied as it should be with a timeline for phasing out exemptions. What is vitally important is that the reduction of exemptions go hand in hand with the reduction in the tax rate. Sequencing is important, otherwise, corporate lobbies will build up to retain exemptions even as the tax rate reduces. The political economy, as well as the economics, of the decision makes it of paramount importance that big loopholes allowing many companies to pay little or no tax are closed at the same time as the rate reduction process starts.
Discussion on personal income taxes also focuses on exemptions. Suggestions have been floated that the income exemption limit be raised for taxpayers, perhaps to as much as Rs 5 lakh a year. There is little justification for this at this point in time. It is true that demand is weak at the moment. But, demand stimuli equivalent to tax cuts are in any case on their way - from the granting of the one rank, one pension demand, for example, and from the recommendations of the Seventh Central Pay Commission.
On the other hand, it is an important goal of the government that the direct taxes base should not be allowed to shrink; after all, too few Indians pay direct taxes. Raising the exemption limit will in any case be regressive, since it will benefit those in the highest income brackets as well. If a pro-middle class step is considered politically feasible, then the reduction of the lowest tax rate should be considered - though the current tax rates have the virtue of simplicity and wide acceptance. It is important, in order to expand the tax base, to also ensure that more transactions are scrutinised, by making the use of PAN numbers compulsory. Recent relaxations in this requirement in some transactions were ill-advised.
When it comes to service taxes, this is perhaps the government's last opportunity to get service taxpayers ready for the advent of the GST. In other words, the rate should be raised to closer to the expected revenue-neutral rate after the introduction of the GST, in order to cushion the immediate inflationary impact of the GST's adoption. The negative list of those exempted from paying service tax must be pruned, so that the benefits of universalisation of the GST are not lost.
Finally, a clear statement about the end of "tax terrorism" and excessive demands for tax on transfer pricing transactions must be in the Budget, to reassure investors that India is turning more business-friendly.
Source :BusinessStandard
Tuesday, 8 December 2015
rajya sabha
08:35
Banking, dining out likely to get costlier on GST rollout: Experts
Banking, dining out likely to get costlier on GST rollout: Experts
Services like telephony, dining out and banking will get dearer if the recommendations made by the GST panel on the proposed nationwide uniform taxation are accepted as the tax rate will increase to 17-18 per cent from 14.5 per cent at present, experts said.
A Finance Ministry panel headed by CEA Arvind Subramanian has suggested a 'standard rate' of 17-18 per cent on bulk of the goods and services for the entire country.
According to Deloitte (India) Senior Director Saloni Roy: "Services will see rise in prices as the tax rate will suddenly increase from 14 per cent to 17-18 per cent when the GST is implemented."
The government plans to roll out Goods and Services Tax (GST) from April 1. A Constitution Amendment Bill is currently stuck in Rajya Sabha.
The Service Tax was introduced at 5 per cent in 1994 on limited number of services, she said, adding the tax rate has gradually increased to 14 per cent and now covers almost of all services with few exceptions.
In the last Budget, Finance Minister Arun Jaitley increased the Service Tax to 14 per cent from 12.36 per cent.
Presently the incidence of Service Tax is 14.5 per cent after including Swachh Bharat cess of 0.5 per cent.
There is no clarity whether the Swachh Bharat cess would be subsumed in the GST or it would be levied over and above the standard rate.
BMR & Associates Partner Malini Mallikarjun said that some sectors, like real estate, may not get impacted as they are not included in the GST.
The CEA-headed panel in its report suggested alcohol, real estate, electricity and petroleum should be included in the GST at an "early stage" in future.
Industry chamber Assocham said: "This rate structure is quite appropriate and will be anti-inflationary for indigenous goods, however the cost of services will go up including some essential services like banking, telecom and information technology (IT)."
The GST panel has suggested dropping of the 1 per cent additional tax on inter-state sales and also opposed inclusion of GST rate in the Constitution.
Describing GST a historic opportunity to 'Make in India by Making One India', the panel recommended a range for revenue-neutral rate (RNR) of 15-15.5 per cent for the Goods and Services Tax (GST), with a preference for the lower one.
It also suggested a range of 'standard' tax rate of 17-18 per cent for bulk of goods and services while recommending 12 per cent for 'low rate goods' and 40 per cent for demerit goods like luxury cars, aerated beverages, pan masala and tobacco. For precious metal, it recommended a range of 2-6 per cent.
The final GST rate would be decided by the GST Council, which will be headed by the Union Finance Minister and have state Finance Ministers as its members.
Saturday, 5 December 2015
TAXES
14:51
Recommendations of Dr Arvind Subramanian Committee for GST @17 to 18 Percent
Chief Economic Advisor Dr Arvind Subramanian led Committee has recommended standard rate for Goods and Services Tax (GST) at 17 to 18 per cent.
Chief Economic Advisor Dr Arvind Subramanian led Committee has recommended standard rate for Goods and Services Tax (GST) at 17 to 18 per cent.
The Committee has submitted its report to Union Finance Minister Arun Jaitley in New Delhi.
Recommendations of Dr Arvind Subramanian Committee
Standard GST rate of 17 to 18 per cent. It is the rate at which most products would likely be taxed. Not to specify GST rate in Constitutional Amendment Bill.
Revenue-neutral rate of 15 to 15.5 per cent. It is a single rate at which there will be no revenue loss to the centre and states in the GST regime. Eliminate all taxes on inter-state trade including one per cent inter-state tax on transfer of goods.
Two options for states: Single rate of 1 per cent or a range of 17-18 per cent. Allocation to states will depend on revenues raised by Centre and states.
Three-tier GST rate structure: Essential goods will be taxed at a lower rate of 12 per cent. Demerit goods such as luxury cars, aerated beverages, pan masala and tobacco products will be taxed at 40 percent and remaining all goods will be taxed at a standard rate of 17 to 18 per cent. Excluded real estate, electricity and alcohol and petroleum products while calculating tax rates but suggests bringing them under the ambit of GST soon.
Background Union government had set up the committee under chairmanship of CEA Dr. Subramanian in June 2015 to arrive at GST rates by factoring in the economic growth rate, taxpayer base and tax compliance levels.
Goods and Services Tax (GST) GST aims to bring uniform indirect tax regime throughout the country by subsuming central and state indirect taxes into single indirect tax.
It seeks to enhance fiscal federalism by removing indirect tax barriers across states and integrate the country into a common market, boosting government revenue and reducing business costs.
Source:Currentaffairs
Sunday, 22 November 2015
TAXES
08:11
NEED FOR GST?
NEED FOR GST?
Goods and Service Tax (GST) bill numbered to be the 122nd constitutional amendment bill, is one of the most ambitious reforms of the NDA government in order to promote ease of doing business and the flagship ‘Make in India’ program. The bill aims to collect various indirect taxes of the center as well as the state within its ambit and levy a single uniform tax on most of the goods and services. GST is levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method. As India is a federal republic, GST would be implemented concurrently by the central government and by state governments.
GST Key Features
So, what exactly does this bill do? The GST bill, if passed in the winter session of the parliament will be a single uniform tax charged on all our goods and services. Currently, we pay VAT on goods and a separate 14% service tax on services.
The features of the GST are as follows:
It will subsume various indirect taxes of the central government like:
('a) Service tax
(b) Excise duty (charged on every product that is manufactured in India)
(c) Countervailing duty
And of the state government like:
VAT
Luxury tax
Entertainment tax
Octroi tax
Entry tax
Note: However this list will be finalized by the GST council only after the bill is passed in the both the houses of the parliament.
It will have two components: CGST (Central Goods and Service Tax) and SGST (State Goods and Service tax).
The bill empowers the center to collect GST in case of inter-state trade, the proceeds of which will be divided between the center and state in accordance with the recommendation of the GST council.
The GST council will be established by the President in accordance with the article 279-A of the constitution and will be chaired by the Finance Minister. It shall have the Minister of state (Finance) and the finance and taxation ministers of all the states as its members.
The council will also decide on the final taxes to be subsumed, exemption list, the principle of distribution of the proceeds collected from inter-state trade, and for dispute settlement.
Both the state and center will have concurrent power to amend the GST. However, the power to levy IGST (Integrated Goods and Service Tax) in case of inter-state trade shall lay with the center, only.
The bill proposes an additional tax not exceeding 1% on inter-state trade in goods, to be levied and collected by the Centre to compensate the states for two years, or as recommended by the GST Council, for losses resulting from its implementation.
Alcohol for human consumption has been kept outside the ambit of the GST. It will apply to five petroleum products at a later date.
Need for GST
The main idea of coming up with such a reform is to do away with the cascading effect of various taxes that are charged at every stage of production and sale. The end result of so many taxes is that the product reaches the market at a much higher rate than it was intended to be. With the introduction of the GST, a single tax will be charged on the goods and services, bringing down the tax burden considerably. So, now when you go out to eat, you end up paying 12.5% VAT on food, 20% on beverages and above that an effective service tax of 5.6% on the total bill, after GST, you will only be paying the Goods and Service Tax and that will be all, thus, making it lighter on your pocket.
GST Pros and Cons
Just like a coin has two sides, GST too has both pros and cons. On one hand, it will cover both goods and services, reduce tax terrorism, help in business expansion and as per the finance ministry will even boost the GDP by 1-2%. On the other face of it, it is difficult to negotiate a revenue neutral rate which should neither prove to be too heavy for the consumer nor lead to losses for the state. Also, the government will have to come up with the required ICT (Information Communication Technology) to handle the logistics.
Reason for delay
Coming to the big question now: Why is the implementation being delayed? Introduction of GST in the Indian economy requires an amendment to the constitution which needs to be passed by both the houses of the parliament with at least two-third of the members voting in its favor and later has to be approved by at least fifteen state legislatures.
The bill stands passed in Lok Sabha where the NDA government is in majority but is stuck in the Rajya Sabha because it lacks the number there. The Government in July 2015 accepted the amendments suggested by the standing committee of the Rajya Sabha in order to win over the votes of TMC and BJD. The amendments approved included the decision to finalize the 1% tax over and above the GST rate to compensate the states for the losses incurred instead of the “may compensate” in the original bill. With the winter session less than ten days away, the NDA government is trying its best to get the bill through so that it can be successfully rolled out on the pre-decided date of 01.04.2016.
Source:http://exams.careerlauncher.com/goods-and-service-tax-simplified/