Demonetisation, GST will bring long-term benefits for Indian economy: IMF on Narendra Modi’s one-off policy moves

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The disruptive impact of demonetisation announced last year is a temporary phenomenon and the scrapping of the high-value currency would bring “permanent and substantial benefits”, according to the International Monetary Fund (IMF).

In an interview to CNBC TV18, IMF Economic Counsellor and Director of Research Maurice Obstfeld said that although demonetisation, as well as implementation of the Goods and Services tax (GST) caused short-term disruptions, both measures would bring long-term benefits.

“The costs of demonetisation are largely temporary and we see permanent and substantial benefits accruing from the move,” Obstfeld said.

Demonetisation caused long queues outside banks.

Demonetisation caused long queues outside banks.

“Both demonetisation and the GST introduction will bring long-term benefits, though these caused short-term disruption,” he said.

The IMF Chief Economist described GST as a “work in progress” to which the Indian economy is “gradually adjusting”.

With businesses going into a “destocking” mode on inventories in anticipation of the GST rollout from July 1, sluggish manufacturing growth, among other factors, pulled down growth in the Indian economy during the first quarter of this fiscal to 5.7 percent, clocking the lowest GDP growth rate under the Narendra Modi dispensation.

Breaking a five-quarter slump, however, a rise in manufacturing sector output pushed the growth rate higher to 6.3 percent during the second quarter (July-September) of 2017-18.

Obstfeld also listed some of the reforms being undertaken by the Indian government that have impressed the multilateral agencies.

“The government has taken important first steps like bringing in the Insolvency and Bankruptcy Code, which helped India improve its position substantially in the World Bank’s ‘Ease of Doing Business’ rankings,” he said.

He also mentioned the recent recapitalisation plan for state-run banks announced by the government and the Asset Quality Review of commercial banks earlier ordered by the Reserve Bank of India (RBI).

Both measures are designed to address the issue of massive non-performing assets (NPAs), or bad loans, accumulated in the Indian banking system that have crossed a staggering Rs 8.5 lakh crore.

In a report released in Washington on Thursday, the IMF cautioned that the high volume of NPAs and the slow pace of mending corporate balance sheets are holding back investment and growth in India even though structural reforms have helped the nation record stronger growth.

The IMF’s Financial System Stability Assessment (FSSA) for India said that overall “India’s key banks appear resilient, but the system is subject to considerable vulnerabilities”.

“The financial sector is facing considerable challenges, and economic growth has recently slowed down,” the report said.

“High non-performing assets and slow deleveraging and repair of corporate balance sheets are testing the resilience of the banking system, and holding back investment and growth.”

“Stress tests show that… a group of public sector banks are highly vulnerable to further declines in asset quality and higher provisioning needs,” it added.

Source: FirstPost

117 companies raise Rs 62k cr via IPOs in Apr-Nov FY18, highest in 5 years

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As many as 117 companies have garnered a staggering Rs 62,736 crore through IPOs in the first eight months of Financial Year 2017-18, much higher than the cumulative amount raised in the last five fiscals, Parliament was informed on Friday.

These 117 initial public offers (IPOs) include 28 main- board public offers and the remaining for small and medium enterprises (SMEs), Minister of State for Finance Pon Radhakrishnan said in a written reply to Lok Sabha.


During April-November of 2017-18 fiscal, a total of 117 companies raised Rs 62,736 crore through IPO route. This was much more than the cumulative amount of Rs 62,147 crore garnered in the last five financial years.

Besides, the ongoing fiscal has witnessed the highest IPO activity since 2007-08, when companies had mopped up Rs 52,219 crore through the route.

The IPO chart in this fiscal is led by General Insurance Corporation of India (GIC) that garnered over Rs 11,176 crore. This was the largest public float by any firm after the October 2010 offer by Coal India which raised Rs 15,000 crore.

GIC is followed by New India Assurance Company that raised Rs 9,467 crore, HDFC Standard Life Insurance Company (Rs 8,695 crore) SBI Life Insurance Company (Rs 8,386 crore) and ICICI Lombard General Insurance (Rs 5,700 crore).

Individually, a total of 106 firms had garnered Rs 29,104 crore in the entire 2016-17, while 74 companies had raised Rs 14,185 crore in 2015-16.

Further, 46 firms had mopped up Rs 3,039 crore in 2014- 15, 40 companies had raised Rs 8,692 crore in 2013-14 and 33 firms had raked in Rs 6,497 crore in 2012-13.

 

Source: Business Standard

MCA introduces Condonation of Delay Scheme 2018 for defaulting companies

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MCA introduces Condonation of Delay Scheme 2018 (CODS-2018) for defaulting companies to file its overdue returns/documents due for filing till 30.06.2017 by temporarily activating DIN of disqualified directors

 

 

 

General Circular No………./2017

File No. 02/04//2017

 

Ministry of Corporate Affairs

5thFloor,‘A’ Wing, Shastri Bhawan

Dr.Rajendra Prasad Road,

NewDelhi-110001.

 

To

 

All Regional Directors,

All Registrar of Companies,

All Stakeholders.

 

Sir,

 

Subject: Condonation of Delay Scheme 2018

Whereas,companies registered under the Companies Act,2013 (or its predecessor Act) are inter-alia required to file their Annual Financial statements and Annual Returns with the Registrar of Companies and non-filing of such reports is an offence under the said Act.

 

Whereas, section 164(2) of the Act read with section 167 of the Companies Act, 2013 [the Act], which provisions were commenced with effect from 01.04.2014, provide for disqualification of a director on account of default by a company in filing an annual return or a financial statement for a continuous period of three years.

 

Whereas, Rule 14 of the Companies (Appointment and Qualification of Directors) Rules, 2014 further prescribes that every director shall inform to the company concerned about his disqualification, if any, under section 164(2), in form DIR-8.

 

Whereas, consequent upon notification of provisions of section 164(2), Ministry of Corporate Affairs (MCA) had launched a Company Law Settlement Scheme 2014 providing an opportunity to the defaulting companies to clear their defaults within the time period specified therein and following the due process as notified.

 

 

Whereas, MCA in September 2017, identified 3,09,614 directors associated with the companies that had failed to file financial statements or annual returns in the MCA21 online registry for a continuous period of three financial years 2013-14 to 2015-16 in terms of provisions of section 164(2) r/w 167(1)(a) of the Act and they were barred from accessing the online registry and a list of such directors was published on the website of MCA.

 

Whereas, as a result of above action, there have been a spate of representations from industry, defaulting companies and their directors seeking an opportunity for the defaulting companies to become compliant and normalize operations.

 

Whereas, certain affected persons have also filed writ petitions before various High Courts seeking relief from the disqualification.

 

Whereas, with a view to giving an opportunity for the non-compliant, defaulting companies to rectify the default, in exercise of its powers conferred under sections 403, 459 and 460 of the Companies Act, 2013, the Central Government has decided to introduce a Scheme namely “Condonation of Delay Scheme 2018” [CODS-2018] as follows.

 

  1. The scheme shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018

 

  1. Definitions – In this scheme, unless the context otherwise requires, –

 

(i) “Act” means the Companies Act, 2013 and Companies Act, 1956 (where ever applicable);

 

(ii) ‘overdue documents’ means the financial statements or the annual returns or other associated documents, as applicable, in the case of a defaulting company and refer to documents mentioned in paragraph 5 of the scheme.

 

(iii) “Company” means a company as defined in clause of 20 of section 2 of the Companies Act, 2013;

 

(iv)  “Defaulting company” means a company which has not filed its financial statements or annual return as required under the Companies Act, 1956 or Companies Act, 2013, as the case may be, and the Rules made thereunder for a continuous period of three yea

 

(v) “Designated authority” means the Registrar of Companies having jurisdiction over the registered office of the company.

 

  1. Applicability: – This scheme is applicable to all defaulting companies (other than the companies which have been stuck off/whose names have been removed from the register of companies under section 248(5) of the Act). A defaulting company is permitted to file its overdue documents which were due for filing till 30.06.2017 in accordance with the provisions of this Scheme.

 

  1. Procedure to be followed for the purposes of the scheme:– (1) In the case of defaulting companies whose names have not been removed from register of companies,-

 

(i) The DINs of the disqualified directors de-activated at present shall be temporarily activated during the validity of the scheme to enable them to file the overdue documents.

 

(ii) The defaulting company shall file the overdue documents in the respective prescribed eForms paying the statutory filing fee and additional fee payable as per section 403 of the Act read with Companies (Registration Offices and fee) Rules, 2014 for filing these overdue documents.

 

(iii) The defaulting company after filing documents under this scheme, shall seek condonation of delay by filing form e-CODS 2018 attached to this scheme along with a fee of 30,000/- (Rs. Thirty Thousand only) as prescribed under the Companies (Registration Offices and Fee) Rules, 2014 well before the last date of the scheme.

 

(iv) The DINs of the Directors associated with the defaulting companies that have not filed their overdue documents and the eform CODS, and these are not taken on record in the MCA21 registry and are still found to be disqualified on the conclusion of the scheme in terms of section 164(2)(a) r/w 167(1)(a) of the Act shall be liable to be deactivated on expiry of the scheme period.

 

(2) In the event of defaulting companies whose names have been removed from the register of companies under section 248 of the Act and which have filed applications for revival under section 252 of the Act up to the date of this scheme, the Director’s DIN shall be re-activated only NCLT order of revival subject to the company having filing of all overdue documents.

 

  1. Scheme not to apply for certain documents – This scheme shall not apply to the filing of documents other than the following overdue documents:

(i) Form Number 20B/MGT-7- Form for filing Annual return by a company having share capital.

(ii) Form 21A/MGT-7- Particulars of Annual return for the company not having share capital.

(iii) Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC-4, AOC-4(CFS), AOC (XBRL)    and     AOC-4(non-XBRL)   –     Forms     for     filing     Balance Sheet/Financial Statement and profit and loss account.

(iv) Form 66-  Form  for  submission  of  Compliance  Certificate  with  the Registrar.

(v) Form 23B/ADT-1- Form for intimation for Appointment of Auditors.

 

  1. The Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s) for all documents filed under the scheme. However, this scheme is without prejudice to action under section 167(2) of the Act or civil and criminal liabilities, if any, of such disqualified directors during the period they remained disqualified.

 

  1. At the conclusion of the Scheme, the Registrar shall take all necessary actions under the Companies Act, 1956/ 2013 against the companies who have not availed themselves of this Scheme and continue to be in default in filing the overdue documents

 

Yours faithfully,

 

(KMS. Narayanan)

 

Assistant Director (Policy)

MCA-CODs-2018.

I-T notices to 4-5 lakh individuals trading in bitcoins across the country

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I-T department is set to issue notices to 4 to 5 lakh high networth individuals across the country who were trading in bitcoins on exchanges. Last week, the department had conducted surveys across major cities

Widening its probe into bitcoin investments and trade, the Income Tax (I-T) department is set to issue notices to 4 to 5 lakh high networth individuals (HNI) across the country who were trading on the exchanges of this unregulated virtual currency.

The taxman had conducted surveys at nine such exchanges last week to check instances of tax evasion.

The department, official sources said, found that out of the estimated 20 lakh entities registered on these exchanges, about 4 to 5 lakh were “operational” and indulging in transactions and investments.

Sources told PTI that the Bengaluru investigation wing of the tax department, which supervised last week’s operations, has now dispatched the information of the individuals and entities found on these databases to eight other such wings across the country for a detailed probe.

“Those individuals and entities whose records were recovered by the department are now being probed under tax evasion charges. Notices are being issued and they will have to pay capital gains tax on the bitcoin investments and trade,” a senior official privy to the operation said.

About 4-5 lakh HNIs and their businesses are being issued notices which will first seek their relevant financial details and subsequently establish the tax demand, if any, he said.

As the bitcoins or the virtual currencies (VCs) are illegal and unregulated in the country as of now, the IT department has taken action as per the existing provisions, they said.

The survey operations conducted last week, under section 133 A of the Income Tax Act, were undertaken for “gathering evidence for establishing the identity of investors and traders, the transaction undertaken by them, identity of counter-parties, related bank accounts used, among others,” they said.

A survey action under the IT law pertains to the tax officials making a surprise visit to the business premises of the party under action but not their residential ones. The trigger for the action is understood to be the huge spike being registered in the value of bitcoins and other virtual currencies in the recent past.

Suspected black money being converted into white, post demonetisation, through the use of bitcoins was also under the department’s scanner, officials said. Earlier this month, there was a spurt in the value of a bitcoin. It rose from under $10,000 at the start of the year to close to $20,000, before a sharp 20 per cent plunge within hours.

Bitcoin, a virtual currency, is not regulated in the country and its circulation has been a cause for concern among central bankers the world over for quite a while now.

 The Reserve Bank of India (RBI) has also cautioned users, holders and traders of virtual currencies. The government has also said that it does not recognise ‘crypto-currency’ as legal tender in India. In March, the Union finance ministry constituted an Inter-Disciplinary Committee to take stock of the present status of virtual currencies both in India and globally and suggest measures for dealing with them.

The committee has submitted its report which is being examined.

The RBI has cleared its stand on cryptocurrencies since long. “There is no underlying or backing of any asset for VCs. As such, their value seems to be a matter of speculation. Huge volatility in the value of VCs has been noticed in the recent past. Thus, the users are exposed to potential losses on account of such volatility in value,” the central bank had said in a December 24, 2013 note.

GST Council makes inter-state e-way bill compulsory from February 1, 2018

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The rules for implementation of nationwide e-way bill system for inter-state movement of goods on a compulsory basis will be notified with effect from February 1, 2018. This will bring uniformity across states for seamless inter-state movement of goods,” the finance ministry said in a statement.

Ferrying goods across states may get quicker as the GST Council today decided to make rollout of all India electronic-way bill compulsory from February 1, two months ahead of the earlier plan.

 

“The rules for implementation of nationwide e-way bill system for inter-state movement of goods on a compulsory basis will be notified with effect from February 1, 2018. This will bring uniformity across states for seamless inter-state movement of goods,” the finance ministry said in a statement.

 

The decision comes after the Council, headed by finance minister Arun Jaitley, met earlier during the day via video conference, to decide upon the advancement of the implementation of e-way bill under the Goods and Services Tax (GST).

 

Under GST rules, ferrying goods worth more than Rs 50,000 within or outside a state will require securing an electronic-way or e-way bill by prior online registration of the consignment.

To generate an e-way bill, the supplier and transporter will have to upload details on the GST Network portal, after which a unique e-way bill number (EBN) will be made available to the supplier, the recipient and the transporter on the common portal.

 

The Council had decided that till such time as the national e-way Bill is ready, the states were authorised to continue their own separate e-way bill systems. The finance minister had said that system will be introduced in a staggered manner, with effect from January 1, 2018, adding that the document will be made applicable on an all-India basis from April 1.

 

“It was represented by the trade and transporters that this (lack of national e-way bill) is causing undue hardship in the inter-state movement of goods and therefore, bringing in an early all India system of e-way Bill has become a necessity,” the ministry said.

 

As a nationwide e-way bill system will be ready for implementation on a trial basis by January 16, transporters can start using this system on a voluntary basis from the same date, it said.

 

While the system for both inter and intra-State e-way bill generation will be ready next month, the Council decided that states may choose their own timings for implementation of the document for intra-state movement of goods on any date before 1st June, 2018.

 

“There are certain States which are already having system of e-way bill for intra-state as well as inter-state movement and some of those states can be early adopters of national e-way Bill system for intra-state movement also. But in any case, the uniform system of e-way bill for inter-state as well as intra-State movement will be implemented across the country by 1st June, 2018,” the statement said.

 

According to Abhishek A Rastogi, Partner, Khaitan & Co, the government should check the system thoroughly so that there is no disruption in movement of goods.

 

“The fair balance for mandatory inter-state e-way bill compliance from February 1 will have to be maintained. This compliance will reduce tax evasions but may pose some problems for businesses in movement of goods…while compulsory intra-state e-way bill compliance will happen from June 1, the government should be clear whether these provisions will be applicable for supplies which are out of the GST net,” Rastogi said.

 

Another expert said that the immediate call to advance the implementation of e-way bill reflects that some serious gaps in the system have been noticed by the government.

“The downfall in the revenue on account of GST, goods crossing the state borders unaccountable by few taxpayers, etc. could be the reasons for the early implementation of e-waybill as this form will forcefully make the taxpayer accountable in the absence of matching of invoices which is currently postponed,” Ansh Bhargava, Head Growth & Strategy, Taxmann said.

 

Source: MoneyControl.com

Modi government set to issue notices to GST defaulters

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Due to postponement of measures under the GST such as matching returns, the e-way bill, and the reverse change mechanism, assesses have found a way to avoid paying taxes.

The government it seems is in no mood to lower its guard on the tax collection front as it looks to send notices to GST defaulters.

 

According to a report in Business Standard, the government is set to issue notices who have failed to file returns.

 

Due to postponement of measures under the GST such as matching returns, the e-way bill, and the reverse change mechanism, assessees have found a way to avoid paying taxes. This has prompted a hardening stand on revenue leakages, as per a government official.

 

In July, the Central Board of Excise and Customs (CBEC) had asked its officers to go easy on taxpayers till GST’s teething problems were solved. But CBEC Chairperson Vanaja Sarna in a letter to his officers has said “sending out notices to those assessees under your jurisdiction who have failed to file returns may be considered.”

 

GST collections slowed to their lowest at Rs 83,346 crore in October as the integrated GST was used as credit and rates were revised downward, the report said.

 

The government official further said that reduction in the GST rates for more than 200 items last month might also affect collections. Fearing a slump in revenue collections, the GST Council on Saturday decided to implement the nationwide roll-out of the electronic way bill on interstate movements of goods from February 1 and for interstate carriage from June 1.

 

Source: MoneyControl.com