How blockchain will fundamentally change our lives in future

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Blockchain has the potential and can be implemented across diverse sectors such as banking, education, and health.

The use of the internet has undergone rapid evolution in a matter of a few decades.

In the 1990s, the internet was described as “a wide-area hypermedia information retrieval initiative aiming to give universal access to a large universe of documents” or simply put, ‘The Internet of Information’ which was primarily used to access data resources and services administered on the web browsers.

Back then, no one would have thought how it would fundamentally change our daily lives in the future. It has rapidly evolved from a platform to gather information to a space where we can shop, bank and communicate. The digital revolution has made the world realise the value of the internet and its implementations.

So, today we are gradually moving towards what Canadian strategist Don Tapscott calls ‘The Internet of Value’; that is the fountainhead of digital assets. Blockchain, which allows us to enable the exchange of any asset across the globe in real-time, ranging from stocks and bonds to music and art, is the next inevitable step in the global progress towards ‘The Internet of Value’.

Various applications of the internet have been made possible which are efficient like peer-to-peer money transfer, because internet reduces the transactional and communication cost to a bare minimum. This is the same force driving the new platforms that have emerged to deliver goods and services at levels of efficiency previously unimaginable, and blockchain is leading the revolution in redefining the new-age internet.

Like a traditional ledger, blockchain is essentially a record of transactions. These transactions can be any movement of money, goods or secure data — for example, a purchase at a supermarket, or the assignment of an Aadhar number. It works in three basic steps. First, it gathers data that the user has provided in forms of smart contracts, transactions IDs. Second, it orders the received data into blocks and finally chains them together securely using cryptography making it decentralised and accessible via any computer/mobile device across the network.

Now the question here is why do we need it? What is it that will change the way groceries are bought, stocks are purchased, money is transferred, bills are paid, and land deeds are made? The answer possibly can be the demand for trust and security emerging from both people and enterprises alike. Blockchain best serves these purposes as the trust factor is native to the medium. For example, if you are transferring money online to your friend, then your medium becomes the internet and to secure your transfer, a clever programming code is written. The same concept is applied by blockchain, but the security is made more secure by cryptography.

Blockchain has the potential and can be implemented across diverse sectors such as banking, education, and health. For instance, we keep our savings, assets and cash with banks because they are trustworthy and secure. However, their data is centralised, making them quite prone to cybercriminals that can bring the entire banking system to a halt. Now consider a person working abroad who wants to send a remittance to his family back home but has to encounter multiple clearances before his family receives it. With blockchain technology, the concept of crypto currency comes into picture, thus resulting in an open-access registry of monetary flows which makes the intermediation of financial institutions unnecessary and even costs less.

Second, in the field of healthcare, while big data analytics and artificial intelligence are simplifying healthcare delivery by smartly diagnosing the diseases from the patterns of numerous plugged-in electrocardiograms, blockchain is turning out to be a perfect platform for recording the medical attention of a patient and identifying a trend from the data recorded. Consider health card: A database which can be perceived as your health identity as it carries your entire medical history. Such technologies can find effective application in reducing information asymmetries within the healthcare and insurance markets by providing the most accurate data on patients.

Finally, blockchain can reorient the education system by delivering academic transparency. It can build an e-portfolio of academic credentials which has your test scores since the day you entered school. Paying for school fee in crypto currency — which is decentralised — from anywhere around the world on a secured network is commendable. Hence, this multi-trillion-dollar industry of education is indeed revolutionising.

Also, if implemented in government operations, blockchain will help break down barriers built from bureaucracy and corruption by providing a means to bypass existing power structures. It could be used to transform the way charities are created and regulated. By implementing a transparent system of transactions that include deposits of cash, transfers of donation and expenses spending will bring about a paradigm shift on how rules are enforced for these organisations.

Moreover, this technology has the competence to revamp the present system by automating manual processes, eradicating frauds and controlling the issues for authorisation. Its implementation across diverse sectors can be a solution to the most foundational problems of mankind. Hence, blockchain could be the perfect platform to transform a knowledge-driven economy into a digital-inclusive society.

GSTR-3B may be extended till June, simplified return forms on cards

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The last date for filing initial GSTR-3B returns for a month is the 20th of the subsequent month.

The GST Council in its meeting on Saturday is likely to extend the deadline for filing of simplified sales return GSTR-3B by three months till June.

The Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, is also expected to finalise a simplified return filing procedure for businesses registered under Goods and Services Tax (GST) regime.

“The new return filing system, if agreed upon by the Council, would take about 3 months to be implemented. Till then GSTR-3B could continue,” an official told PTI.

The 26th GST Council meet is slated on March 10.

Simplified sales return GSTR-3B was introduced in July, the month of GST roll out, to help businesses to file returns easily in the initial months of GST roll out. This was to be followed with filing of final returns — GSTR – 1, 2 and 3.

With businesses complaining of difficulty in invoice matching while filing final returns as well as complications in GSTN systems, the GST Council in November last year extended GSTR-3B filing requirement till end of March, 2018, and did away with filing of purchase return GSTR-2 and final return 3.

“GSTR-3B filing system has stabilised and businesses are comfortable. So, businesses can continue to pay taxes by filing 3B till the time new return filing system is put in place,” the official added.

The last date for filing initial GSTR-3B returns for a month is the 20th of the subsequent month.

The GST Council had in January entrusted Bihar Deputy Chief Minister Sushil Kumar Modi led GoM to work out a simplified return filing process so that businesses can fill up only a single form to file returns under GST.

The group of ministers met last month to work out a simplified return form, but the meeting remained inconclusive.

In the GoM meet, the Centre and state officials presented their model for return simplification, while Nandan Nilekani also made his presentation. The idea is GST return form should be simplified, it should ideally be one return every month, Modi had said.

About 8 crore GST returns have been filed so far on GST Network portal since implementation of GST on July 1.

In absence of anti-evasion measures and invoice matching, the GST collections have declined since July.

As per official data available, in January 57.78 lakh GSTR-3B returns were filed, which fetched Rs 86,318 crore revenue to the exchequer.

For December 56.30 lakh GSTR-3B were filed which fetched Rs 86,703 crore revenue to the exchequer, while in November 53.06 lakh returns were filed with total revenue of Rs 80,808 crore.

Collections topped Rs 95,000 crore in the initial month of July.

Source: The Economic Times

EPFO makes online claims mandatory for PF withdrawals above Rs 1 mn

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Under the pension scheme, there is a provision of part withdrawal of pension, commonly known as commutation of pension money

Retirement fund body EPFO has made it mandatory to file online claims for provident fund withdrawals above Rs 1 million, taking another step towards becoming a paperless organisation.

The Employees Provident Fund Organisation (EPFO) has also made it mandatory to file online claims for withdrawals of above Rs 0.5 million under the Employees Pension Scheme 1995.

Under the pension scheme, there is a provision of part withdrawal of pension, commonly known as commutation of pension money.

At present, EPFO subscribers have the option of filing online as well as manual claims for provident fund withdrawal as also for a pension.

The decision was taken at a meeting chaired by Central Provident Fund Commissioner on January 17, 2018, an official said.

The official said the field offices have been directed that the claims must be accepted online in case the amount of provident fund withdrawal is above Rs 1 million.

Similarly, the claims must be online in case the amount is above Rs 0.5 million under employees’ pension scheme, the official added.

The bank account of the subscriber has to be seeded and verified in the system before the online claims can be settled.

Moreover, the subscriber should have been issued a universal account number and same must be activated.

The official said that all claims exceeding the said limits would not be accepted in the physical form now onwards.

The EPFO has over 60 million subscribers and manages a corpus of Rs 10 trillion.

 

Source: Business Standard

 

Private equity investors bring in deals worth $983 mn in January: Thornton

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January was dominated by investments in start-ups which contributed to 52% of total investment volumes

Private equity (PE) investors announced deals worth $983 million in January, a 23 per cent rise in value terms over last year, driven by big ticket transactions, says a Grant Thornton report.

According to the assurance, tax and advisory firm, in January, there were 84 PE deals worth $983 million, against 81 such transactions worth $796 million in January 2017.

“Private equity deals recorded 4 per cent increase in deal volumes and 23 per cent increase in deal value in January 2018 as compared to January 2017,” said Pankaj Chopda Director at Grant Thornton India LLP.

January was dominated by investments in start-ups which contributed to 52 per cent of total investment volumes. On the other hand, energy & natural resources and real estate sectors witnessed big-ticket PE investment over $100 million together capturing 39 per cent of total PE deal values.

Altico Capital’s investment of $195 million across five realty projects in Hyderabad and Pune was the top PE deal in January.

Other major transactions include Canada Pension Plan Investment Board’s 6 per cent stake acquisition in ReNew Power Ventures for $144 million and Warburg Pincus and SAIF Partners’ $50 million investment in Rivigo Services.

Going forward, the PE deal outlook looks bullish especially for the start-up sector.

“Increasing customer penetration in online transactions and increasing solutions to simplify online transactions offered by start-ups will attract interest in start-ups engaged in retail, fintech, foodtech, on demand services and travel and logistics,” Chopda said.

“Government reforms such as RERA, focus on cleantech and on increasing digital financial transactions will drive the momentum in banking and financial, real estate and energy and natural resources.

India-specific strategies by global and already present PE firms and funds raised by new players will act as catalyst for PE transactions,” he added.

Source: Business Standard

 

Jewellery Export Council may cancel Firestar, Gitanjali Gems’ membership

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The Mumbai-based council said earlier that the Nirav Modi/Gitanjali Gems incident is of concern to the industry and had condemned any sort of unlawful action.

The Gems & Jewellery Export Promotion Council may cancel the membership of Nirav Modi, Gitanjali Gems and related companies after Punjab National Bank named them in a complaint of alleged fraud.

“Their companies are registered with us. Nothing is known as of now but if something comes out, we will take disciplinary action against them,” said Praveenshankar Pandya, immediate past Chairman of the council. Firestar Diamond, owned by Nirav Modi, and Gitanjali Gems, which belongs to his uncle Mehul Choksi, are members of the council, the apex body of the gems and jewellery industry that represents almost 6,000 exporters.

According to a council official, cancellation of membership can cause problems for exporters as banks and suppliers often ask for certificates and membership details. “Our cancellation will reflect poorly on them in the global market,” the official said. The council hasn’t cancelled a membership in at least a decade, he said.

The Mumbai-based council said earlier that the Nirav Modi/Gitanjali Gems incident is of concern to the industry and had condemned any sort of unlawful action. “The council strongly believes that this incident will not have any contagion effect on the gems and jewellery export industry,” it said in a statement on February 17. Pandya sought an investigation into alleged irregularities by the two companies in their bank dealings. He said small exporters were now facing difficulty in securing loans worth Rs 20-30 crore from banks.

“There is a shortage of finance for small and medium diamond exporters. They are made to run from pillar to post, asked for collateral and other details like credit ratings by the banks,” Pandya said. India’s diamond exports stand at $23 billion with value addition in excess of $7 billion.

 

Source: The Economic Times

 

 

PNB fraud fallout: RBI tells banks to link SWIFT with CBS by 30 April

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The PNB fraud, which happened via SWIFT, went undetected since it was not linked to core banking solutions (CBS) and because checks failed at several levels
RBI has announced the setting up of a panel under the chairmanship of Y.H. Malegam to study rising cases of bank fraud and set out a blueprint to curb them.

The Reserve Bank of India (RBI) has set 30 April as the deadline for banks to integrate SWIFT (Society for Worldwide Interbank Financial Telecommunication) with core banking solutions (CBS) as it looks to strengthen internal controls in banks following the Rs11,400 crore PNB fraud.

“That (30 April) could be a deadline but it is an outer limit. Today, the urgency is such that everyone wants this project to be on fast track,” Usha Ananthasubramanian, managing director and chief executive officer of Allahabad Bank, and chairman of the Indian Banks’ Association (IBA), said on the sidelines of an IBA event on Friday.

“There is already a mandate from RBI that you need to comply with this straight through processing and combining SWIFT with CBS… Everybody has started…” she added.

The PNB fraud revolves around SWIFT. Branch officials of the lender fraudulently issued letters of undertaking, basically guarantees, to jeweller Nirav Modi-linked companies without getting proper approvals and without making entries in CBS, the software used to support a bank’s most common transactions.

The scam that happened via SWIFT went undetected since it was not linked to CBS and because checks failed at several levels, say experts.

RBI announced the setting up of a panel under the chairmanship of Y.H. Malegam, a former member of its central board of directors, to study rising cases of bank fraud and set out a blueprint to curb them.

In a letter to banks, RBI also reiterated that they must strictly comply with the principle of “four eyes”—that each SWIFT message must be processed by four bank officials: a maker, a checker, a verifier and an authorizer—two people who have seen the letter said on condition of anonymity.

“Apart from talking about maker-checker concept, RBI has asked banks to maintain a Chinese wall between officials dealing with SWIFT and CBS,” said a senior official at Mumbai-based bank, one of the two people cited above.

Source:  The Economic Times

IGST payout: Govt refunds Rs 4,000 crore to exporters; asks them to clear mismatch issues

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Even as the government grapples with incomplete details and mismatch errors in refund claims by exporters, it has refunded Rs 4,000 crore out of verified claims of Rs 5,000-6,000 crore on account of payment of Integrated GST (IGST) on exports under the goods and services tax (GST) regime. Incomplete details in refund claims and mismatch errors by exporters are creating a hurdle in processing the remaining refund amount, Central Board of Excise and Customs (CBEC) Chairman Vanaja N Sarna said, adding that the exporters should come forward to rectify the errors as officials are working overtime to ensure a smooth payout of the refunds. “There are mismatch issues for which exporters should come forward and sort out. They are being requested to come forward through SMS/emails to sort out issues which are remaining. We are working 24×7 to allow refunds to exporters. They have to come and rectify their mistakes to get the refund,” Sarna told The Indian Express.

Government officials said that the total refund claims received by GST Network (GSTN) are approximately of Rs 13,000 crore, out of which claims worth only Rs 5,000-6,000 crore have been verified so far and forwarded to CBEC for facilitating disbursement of refunds. Separately, the government has also refunded Rs 2,000 crore as input tax credit to exporters, Sarna said.

Under GST, exporters are required to pay IGST on exports and then claim refunds. The second type of refunds to exporters under GST involve refund of GST paid on purchase of inputs.

For refund of IGST paid on exports, the exporters are required to file GSTR 3 B and table 6A of GSTR 1 on the GSTN portal and shipping bills on the customs EDI (electronic data interchange) system. For refund of the unutilised input tax credit on inputs used in making exports, the exporters are required to file Form GST RFD- 01A on the GST portal. In instructions issued to Customs authorities by CBEC on October 9, the CBEC had said that filing of correct EGM is a must for treating shipping bill or bill of export as a refund claim.

Explaining the errors filed in the refund claims, Sarna said that in some instances, exporters have filled metric tonne (weight) of exported goods instead of the refund amount. Or, in some cases, the shipping bill has a number in place of an alphabet. “Some things are missing, there are some blank spaces, the system won’t accept until that gets corrected. That rectification has to be done by the exporters,” she said.

Similarly, there are EGM (Export General Manifest) mismatches or invoice mismatches in the refund claims by exporters. “I have been asking CBEC officials to reach out to exporters. I recently visited Hyderabad, there we have started sending e-mails to exporters that this is the flaw, please come forward and repair it, so that we can give the refund. CBEC officials are calling people and asking them to come and rectify their mistake,” Sarna said.

As per a CBEC release dated November 29, the quantum of IGST refund claims as filed through shipping bills during July to October 2017, was approximately Rs 6,500 crore and the quantum of refund of unutilised credit on inputs or input services filed on GSTN portal, was about Rs 30 crore. The refund claims have subsequently been revised upwards to around Rs 13,000 crore, but only about half of them have complete details to facilitate complete verification, officials said.

A study as part of RBI’s Mint Street Memos series had earlier this month had stated that the implementation and refund delays under the new indirect tax regime of GST seem to have led to working capital constraints for firms, which in turn might have hurt their exports in October 2017. However, the subsequent initiatives taken by the government since then appear to have significantly alleviated exporters’ concerns which got reflected in the exports growth pick up in November and December 2017, it had said.

The study had indicated that a short-term liquidity shock impacted firms in the export sector, with the firms with high working capital/sales ratio such as such as, petroleum and gems and jewellery sectors hit the most due to the liquidity constraints.

Source: Indian Express