Archive for January, 2010

RBI has increased cash reserve ratio by 75 bps to 5.75 Percent , the hike would happen in two stages, the first stage of hike of 50 bps will be effective from February 13 and the next 25 bps from February 27. RBI has not touched the the reverse repo rate which is at 3.25 percent and repo rate which is at 4.75 percent. CRR hike would suck out Rs 36,000 crore liquidity from the system. Full Article

It is official. The much-anticipated Goods and Services Tax (GST), which will replace most of the indirect taxes levied by the Centre and states, will not be introduced from the targeted date of April 1. The Bills pertaining to the introduction of a new law and amendment to the Constitution will not be tabled in the coming Budget session of Parliament. Finance Minister Pranab Mukherjee and state finance ministers will meet in April to decide a new date for the GST rollou.. Full Article

Department of Revenue has agreed to most of the recommendations put forward by Empowered committee in FDP on GST relating to harmonious structure of rate, taxation base, exemptions, chargeability, definition of taxable event, taxable person, valuation, classification etc.However, there are certain areas where Department of Revenue has suggested changes or deviated from FDP. The said areas of differences are discussed below: Full Article

In a ruling that will provide great relief to corporates planning to restructure their businesses, the Authority for Advance Ruling (AAR) held that restructuring of businesses cannot be construed as an exercise for avoiding tax in India. AAR, a quasi judicial body for settling tax disputes involving foreign entities, in an order last week on an application filed by the Star Group companies, held that any tax benefit resulting from the restructuring of businesses cannot b.. Full Article

An attempt by the state government to regulate non-banking financial companies (NBFCs) operating in the state failed when justice Jayant Patel of the Gujarat high court ruled that NBFCs can’t be put under the purview of the Money laundering act (ML Act). The judgment is significant in the present scenario as scores of NBFCs in the state and thousands of people are getting advances through such companies regularly. The NBFCs were irked when the registrars of the co-oper.. Full Article

Interest rates may remain soft even if the central bank were to withdraw its accommodating stance and tighten monetary policy, which will be reviewed on Friday. The good news for home loan borrowers is that retail loans are the only form of credit showing some decent growth and bankers are unlikely to jeopardise this demand by raising rates. Corporates, who in any case have not been big borrowers, may also not see an increase in rates as banks have said they are unlikely.. Full Article

The government is likely to extend the 2 per cent interest subsidy given to exporters on rupee export credit from March 31 to December 2010. The announcement is expected in the upcoming Budget. Although India's exports have started growing again after several months of decline, commerce ministry sources told that the extension is being considered to sustain growth and stabilise it at 15 to 20 per cent. Full Article

Please find enclosed a copy of the corrigendum received from Government of India (Ministry of External Affairs) as forwarded by the Chairman of UN Security Council's 1267 Committee regarding a technical error in the Arabic script of one of names referred to in the note dated January 19, 2010 {Al-Qaida in the Arabian Peninsula ( AQAP) (QE.A.129.10)} for information and necessary action. Full Article