QBiz: Council Clears Model GST Law; Tighter Rules for E-Payments
Catch the latest business news from across the country on QBiz.
1. GST Council Clears Model Tax Law, but Some Hurdles Remain
In a significant breakthrough, that augurs well for the implementation of the Goods and Services Tax (GST), both states and the centre cleared the model GST law on Thursday in the seventh GST council meeting chaired by Finance Minister Arun Jaitley.
All eyes will now be on the contentious issue of cross-empowerment to scrutinise assesses to be taken up on Friday. A lack of consensus on the issue would make it impossible for the government to implement the ambitious indirect tax reform from its target date of 1 April 2017.
Friday’s meeting will be crucial as the GST council will discuss the integrated GST Bill under which it will take up the matter regarding dual control of assesses, a government official said, requesting anonymity.
Also Read: Get GST Going, Improve It Later
2. Govt Plans Tighter Privacy Rules for E-Payments
Laws to protect the privacy and financial details of people using electronic payments are on the cards, a top government official said.
The government is working on a legal framework that will define the liabilities and obligations of payment companies, Aruna Sundararajan, secretary in the ministry of electronics and information technology, said in an interview.
The framework will cover e-wallets, payment gateways, prepaid cards and other payment platforms. It will also cover services of banks and the use of credit cards for online transactions.
3. Company Law Tribunal Rejects Mistry's Plea to Dissolve Tata Sons Board
The National Company Law Tribunal did not give any interim relief to Cyrus Mistry in the petition filed by his family-controlled firms against Tata Sons.
The tribunal has asked Mistry to file a rejoinder within seven days to prove his allegations against the Tatas.
A Division Bench of the NCLT, comprising BSV Prasad Kumar (Member-Judicial) and V Nallasenapathy (Member-Technical), decided to hear the petition filed by Cyrus Investments Pvt Ltd and Sterling Investments Corporation, on 31 January, saying it would not consider granting interim relief now or entertain interim proceedings.
The two investment companies, which own 18.3 percent stake in Tata Sons, had moved the NCLT under Sections 241 and 242 of the Companies Act to protect Tata Sons from “oppression and mismanagement”.
4. Reality Check: Indian Economy Is Not Larger Than That of the UK
The claim that the Indian economy has overtaken the UK economy in terms of absolute size, as made by a contributor to Forbes magazine and carried by sections of the Indian media, is not backed by data, an analysis has revealed.
The Hindu analysed GDP data from the International Monetary Fund (IMF) and the Government of India, and currency data from the central banks of the two countries to arrive at the conclusion.
The Forbes report, authored by a former McKinsey consultant and current student at Tsinghua University, says that the UK’s GDP in 2016 was £1.87 trillion which, given the 20 percent decline in the value of the pound over the course of 2016, translated to $2.29 trillion. The report cites India’s 2016 GDP as being Rs 153 trillion, which converts to $2.30 trillion at an exchange rate of Rs 66.6 a dollar.
While the GDP figure cited for the UK is corroborated by data from the IMF and the currency rate of 0.81 pounds to the dollar used in the calculations is backed by data from the Bank of England, the data for India does not match up.
5. Plunging Exports May Force Govt to Cut $900-Billion Target for 2020
India’s dismal export performance in the last two years, owing to lacklustre global demand, has forced the government to consider pruning the goods and services export target of $900 billion fixed for 2020.
The mid-term review of the five-year foreign trade policy, to be announced in 2017, is likely to set a much lower target, which will be determined after sectoral consultations.
“The original plan was to double goods and services exports from about $450 billion in 2015 to $900 billion in 2020,” a Commerce Ministry official told Business Line.
6. Social Outlay May Go up 10-12% in Budget
As part of a post-demonetisation gift, the government could increase spending for the coming financial year in health, education, women & child development and related social sector schemes by 10-12 percent, Business Standard has learnt.
This would run concurrently with the increased layout on the social sector by state governments, after the Fourteenth Finance Commission (FFC) recommended the latter spend more on schemes in health, education and similar segments. Most of these areas are state subjects.
The FFC had increased the devolution of taxes to states from the divisible pool, from 32 percent to 42 percent. However, it had reduced non-tax transfers.
(Source: Business Standard)
7. Central Staff May Get to Choose NPS Fund Manager, Decide Allocation
Decks have been cleared for nearly 2.8 million central government employees, who are subscribers of the National Pension System (NPS), to choose their Pension Fund Managers (PFM) and also decide on their investment allocation.
The Department of Personnel & Training (DoPT) in the Ministry of Personnel, Public Grievances and Pensions has given its nod for providing flexibility to central government employees who are subscribers of the NPS, a top PFRDA official said.
As of end-November 2016, the total assets under management of NPS contributions of central government employees stood at ₹63,000 crore.
8. Modify Personal Income Tax Rate Slabs in Budget 2017, Says CII
The Confederation of Indian Industry (CII) has recommended that the corporate tax rate be brought down to 18 percent in the upcoming Budget and that personal income tax rates be modified, according to the Budget demands submitted to the Ministry of Finance.
The industry body has also called for status quo on excise and customs duties.
According to the country’s premier trade lobby, Budget 2017 should introduce a new personal income tax structure wherein income up to Rs 3 lakh a year would be exempt from income tax, between Rs 3 lakh and Rs 10 lakh would attract a tax rate of 10 percent, income between Rs 10 lakh and Rs 20 lakh would be taxed at 20 percent, and income above Rs 20 lakh a year would be taxed at 30 percent.
9. Tata Motors Acknowledges Its Not So ‘Nano’ Problem
The Nano may have turned out to be a huge drag on Tata Motors’ balance sheet, but not all the investment made in the world’s cheapest car project has gone to waste, said Subodh Bhargava, who was chairing the company’s extraordinary general meeting on Thursday.
The meeting, which had been convened to seek shareholders’ approval to remove independent director Nusli Wadia from the board, saw Bhargava try to address some of the concerns raised by Wadia.
Bhargava said the company is already using the Tata Nano’s Sanand plant to also build its highest-selling car, the Tata Tiago.
He added that majority of the development cost and investment made to build the Nano had already been written off, as per accounting standards.
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