ECONOMY

Monthly Archives: JUNE 2017


Developers Need Not Worry; News Highly Misleading and Mischievous: Sidhu
30.06.17 - team pt
Developers Need Not Worry; News Highly Misleading and Mischievous: Sidhu



WHILE REACTING TO The Tribune news story, ‘Punjab to resume ‘surplus’ land with developers’ filed by Ruchika M Khanna, regarding resumption of surplus land from the developers, Financial Commissioner (Revenue) KBS Sidhu today clarified about misgivings arising out of the circular published by the State Revenue Department on May 3, 2017 related to the implementation of Surplus Area/Ceiling Laws in State, he also stated that the news was highly misleading and mischievous.
 
Sidhu, who is also Special Chief Secretary (Revenue), categorically stated that the news item had placed selective contents of the circular out of context and misinterpreted it, while quoting unauthorized sources. Sidhu further said that the position of law as codified under the Punjab Land Reforms Act, 1972 continued to be the same. As such, the provisions pertaining to the Surplus Area were attracted only in respect of "agricultural land or land used for purposes of subservient thereto”.

Clarifying the issue, Financial Commissioner (Revenue) revealed that neither any amendment had been effected nor was any move on the anvil to change this basic position. In any case, land used for non-agricultural purposes like industrial use, development of residential/industrial colonies and townships and educational institutions continued to be out of the purview of this enactment, if permission for the change of land use had been obtained from the Competent Authority, even if the quantum of area held in the name of any single legal entity exceeded the permissible area stipulated under the law for agricultural purposes.

Sidhu further stated that the implication in the news that the Government was keen to retrieve land from promoters who had failed to implement mega-projects was highly misleading and mischievous. He emphasized that circular merely reiterated the enabling provision effected through an amendment in the year 2011, under which any person who acquired agricultural land in excess of the permissible area but intended to be put it for non-agricultural use, such as residential, commercial or institutional, had a one-year window to get such change of land use effected, without attracting provisions of the Punjab Land Reforms Act, 1972.




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GST: Indian businessmen worried – may prove Demonetisaton 2.0
29.06.17 -
GST: Indian businessmen worried – may prove Demonetisaton 2.0



Businessman Pankaj Jain is so worried about the impending launch of a new sales tax in India that he is thinking of shutting down his tiny textile factory for a month to give himself time to adjust.

Jain is one of millions of small business owners who face wrenching change from India's biggest tax reform since independence that will unify the country's $2 trillion economy and 1.3 billion people into a common market.
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The note ban caused severe disruption to India's cash-driven economy and slammed the brakes on growth, which slowed to a two-year low in the quarter to March.
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But he is simply not ready for a regime that from July 1 will for the first time tax the bed linen his 10 workers make, and require him to file his taxes every month online.

On the desk in his tiny office in Meerut, two hours drive northeast of New Delhi, lay two calculators. Turning to open a metal cabinet, he pulled out a hand-written ledger to show how he keeps his books.
"We will have to hire an accountant - and get a computer,” the thickset 52-year-old told Reuters, as a dozen ancient power looms clattered away in the ramshackle workshop next door.

Prime Minister Narendra Modi's government says that by replacing several federal and state taxes, the new Goods and Services Tax (GST) will make life simpler for business.

To drive home the point, Bollywood superstar Amitabh Bachchan has appeared in a promotional video in which he weaves a cat's cradle between the fingers of his hands - symbolising India's thicket of old taxes.

With a flourish, the tangle is gone and Bachchan proclaims: "One nation, one tax, one market!”

Not so simple

By tearing down barriers between India's 29 states, the GST should deliver efficiency gains to larger businesses. HSBC estimates the reform could add 0.4 percent to economic growth.

Yet at the local chapter of the Indian Industries Association, which groups 6,500 smaller enterprises nationwide, the talk is about how to cope in the aftermath of the GST rollout.

"In the initial months, there may be utter confusion,” said chairman Ashok Malhotra, who runs one firm that manufactures voltage stabilisers and a second that makes timing equipment for boxing contests.
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By tearing down barriers between India's 29 states, the GST should deliver efficiency gains to larger businesses.
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A big concern is the Indian GST's sheer complexity - with rates of 5, 12, 18 and 28 percent, and myriad exceptions, it contrasts with simpler, flatter and broader sales taxes in other countries. 

The official schedule of GST rates runs to 213 pages and has undergone repeated last-minute changes. "Rubber goods are taxed at 12 percent; sporting goods at 18 percent.

I make rubber sporting goods so what tax am I supposed to pay?” asks Anurag Agarwal, the local IIA secretary.

Grace period?

The top government official responsible for coordinating the GST rollout rebuts complaints from bosses that the tax is too complex, adding that the IT back-end that will drive it - crunching up to 5 billion invoices a month - is robust. 

"It is a technological marvel, as well as a fiscal marvel,” Revenue Secretary Hasmukh Adhia told Reuters in an interview.

The government will, however, allow firms to file simplified returns for July and August.

From September they must file a total of 37 online returns annually - three each month and one at the year's end - for each state they operate in.

One particular concern is how a new feature of the GST, the input tax credit, will work. This allows a company to claim refunds on its inputs and means it should only pay tax on the value it adds.

The structure will encourage companies to buy from suppliers that are GST-compliant, so that tax credits can flow down a supply chain.

That spells bad news for small firms hesitating to shift into the formal economy.

The government estimates smaller companies account for 45 percent of manufacturing and employ more than 117 million people.

Adhia played down the risk of job losses, however, saying this would be offset by new service sector jobs. 
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A big concern is the Indian GST's sheer complexity - with rates of 5, 12, 18 and 28 percent, and myriad exceptions, it contrasts with simpler, flatter and broader sales taxes in other countries.
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Demonetisation 2.0

The prospect of disruption is drawing comparisons with Modi's decision last November to scrap high-value bank notes that made up 86 percent of the cash in circulation, in a bid to purge illicit "black money” from the system.

The note ban caused severe disruption to India's cash-driven economy and slammed the brakes on growth, which slowed to a two-year low in the quarter to March.

"It could throw the business out of gear - it can affect your volumes by at least 30 percent,” said the head of one large cement company in the Delhi region.

Back in Meerut, Pankaj Jain worries that hiring an accountant and charging 5 percent GST on his bedsheets could eat up to two-thirds of his annual profits of 400,000-500,000 rupees ($6,210-$7,760).

"I know my costs will go up, but I don't know about my income,” he said. "I might even have to shut up shop completely and go into trading.” (Reuter)




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Notification soon, No need to repay loans whose debts waived off, Capt assures farmers
29.06.17 - team pt
Notification soon, No need to repay loans whose debts waived off, Capt assures farmers



PUNJAB CHIEF Minister Captain Amarinder Singh on Thursday announced that the farmers whose loans had been waived off stood immediately exempt from repayment of their debts.
 
Addressing a meeting of various farmers’ organisations here, the Chief Minister said that the notification in this regard will be issued soon. He also assured that his government would continue to pressurize the Centre for implementation of the recommendations of the Swaminathan Commission, on which all the kisan unions had expressed total consensus as the only real long-term solution to the problems of the farming community.
 
The meeting was informed that the process of loan waiver, as announced in the budget, would start within two months.
 
A cabinet sub-committee had already been formed to speak to the arthiyas to resolve the issue of non-institutional loans, the Chief Minister further said, responding to concerns expressed on this count.
 
With all the organisations urging the state government to push the central government into implementation of the Swaminathan Commission report without further delay, the Chief Minister assured them that this was high on his agenda and he would do everything in his power to alleviate the sufferings of the farmers.
 
The Chief Minister, who assured the farmers’ organisations that his government would engage with them in continuous dialogue to resolve the crises facing the farming community, said his government was committed to waiving off the loans of the farmers, even though the state’s debt burden had turned out to be much higher than anticipated.  Captain Amarinder asserted that his government would fulfill each of the 49-point agenda for farmers in the poll manifesto to make agriculture profitable.
 
The Chief Minister once again reiterated Punjab’s inability to share river water with other states, pointing out that if SYL comes up then a whopping 10,000 acres of southern part of the state would go dry. He advocated continuous  dialogue to resolve the festering issue and said Punjab’s water would not be allowed to be diverted to other states and a committee under the Finance Minister was working continuously to solve the problem.
 
Besides waiver of loans, other issues discussed by the kisan unions who participated in the meeting included fixation of price of crops on recommendations of Dr. Swaminathan Commission report (MSP should be at least 50% more than the weighted average cost of production), as well as compensation of Rs 10 lacs to farmers who committed suicide due to debt, job to one dependent member of family, besides their debt waiver which the government has already announced.
 
Ownership rights to cultivators who have been cultivating Panchyati/Shamlat land since long, proper arrangements for stray animals as they cause damage to crops and a stop to acquisition of land without the consent of farmers were among the other key demands of the farmers’ organisations. The Chief Minister heard these sympathetically and assured of all possible steps to address the same.
 
There was a suggestion that the Vidhan Sabha should pass a resolution for implementation of the Swaminathan commission report, and also for declaring Punjab a special agricultural zone.
 
While BKU (Lakhowal) called for lowering of prices of pesticides and insecticides, the Pagri Sabhal Jatta Lehar spoke of fixing of sugarcane price at a minimum of Rs. 375 per quintal as well as other issues related to sugarcane production. The organisations demanded demanded timely clearance of sugarcane arrears besides declaring Gurdaspur and Hoshiarpur as sugarcane zone, as it was a major catchment area for the supply of sugarcane to the nearby mills.
 
To safeguard the interests of the farmers as a result of distressed selling of crops for want of adequate marketing support, these associations demanded bringing the crops of potatoes, maize and basmati within the MSP regime for ensuring remunerative prices of their produce. 
 
BKU (Sidhupur) wanted direct payment to the farmers rather than through procurement agencies and change in transformers as per load. BKU (Mann) demanded grant of pensions to farmers above the age of 60.
 
The union representatives hailed the meeting as a vital step to resolve agriculture related issues in the state. They thanked the Chief Minister for making  good beginning with the loan waiver of small and marginal farmers. The issue of grant of excess loans by banks was also raised and the government requested to ensure that this practice is stopped.
 
There was a consensus on crop diversification as a means of increasing the incomes of the beleaguered farming community, which is currently caught in the non-remunerative paddy-wheat cycle.
 
A suggestion to open up the Attari border for export of vegetables was also discussed during the meeting, which was the first of its kind, with virtually all the state’s farmers’ organisations participating in it.
 
PPCC president Sunil Jakhar urged the state government to take up the issue of exclusion of agriculture from GST with the central government. He also proposed the creation of an MSP Fund from the money saved by the centre from the lowering of the fuel import cost. Jakhar suggested norms to regulate lending by private agents and lenders, who charge arbitrary interest rates.

The meeting was attended by Cabinet Ministers Manpreet Singh Badal and Tript Rajinder Singh Bajwa, Chairman Punjab Mandi Board Lal Singh and senior bureaucrats of the state.
 
The farmers’ organisations that participated in the meeting were represented by Sukhdev Singh Khokari BKU Ugrahan, Surjit Singh Phool BKU Krantikari (Phool group), Shinder Singh Lakhewal BKU Krantikari (Shinder), Datar Singh Kirti Kisan Union, Kawalpreet Singh Pannu Kisan Sangharsh Committee (Pannu Group), Randheer Singh Azad Kisan Sangarash Committee, Ruldu Singh Mansa Punjab Kisan Union (Ruldu group), Kamalpreet Singh Kaki Pagri Sabhal Jatta Lehar, Harinder Singh Lakhowal BKU (Lakhowal), Balbir Singh Rajewal BKU (Rajewal), Kaka Singh Phool BKU (Sidhupur), Bhupinder Singh Mann BKU (Mann), Buta Singh BKU Dakonda and Harmeet Singh Qadian BKU (Qadian)




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Aadhaar-PAN linking must for income tax return filing from 1 July, Govt notifies rules
27.06.17 - TEAM PT
Aadhaar-PAN linking must for income tax return filing from 1 July, Govt notifies rules



THE GOVERNMENT has made it mandatory for taxpayers to link existing Aadhaar numbers with PAN cards with effect from July 1.

Amending income tax rules and notifying the same, the government has made quoting of the 12-digit biometric Aadhaar or the enrolment ID a must at the time of application of permanent account number (PAN).

Finance minister Arun Jaitley through an amendment to tax proposals in the Finance Bill for 2017-18 had made Aadhaar mandatory for filing income tax returns and provided for linking of PAN with Aadhaar to check tax evasion through use of multiple PAN cards.

According to a PTI report, the revenue department said "every person who has been allotted PAN as on July 1, 2017, and who in accordance with the provisions of sub-section (2) of section 139AA is required to intimate his Aadhaar number, shall intimate his Aadhaar number to the principal director general of income tax (systems) or DGIT (systems)".

Besides, it entrusted principal DGIT (systems) or DGIT (systems) with specifying the formats and standards along with procedure for verification of documents filed with PAN application or intimation of Aadhaar number.

The rules will come into force from July 1, 2017, the revenue department said while amending Rule 114 of the I-T Act, which deals in application for allotment of PAN.

As many as 2.07 crore taxpayers have already linked their Aadhaar with PAN.
 
Earlier this month, the Supreme Court had upheld the validity of an I-T Act provision making Aadhaar mandatory for allotment of PAN cards and ITR filing, but had put a partial stay on its implementation till a Constitution bench addressed the issue of right to privacy.
 
Pursuant to this, the Central Board of Direct Taxes (CBDT) had said the linking of Aadhaar and PAN will be a "must" for filing of income tax returns (ITR) and obtaining PAN from July 1.

While Aadhaar is a biometric authentication issued by the UIDAI, PAN is a 10-digit alphanumeric number alloted by the I-T department to individuals and entities.





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Don’t Trust Locker; RBI says Banks not liable for loss of contents
26.06.17 - team pt
Don’t Trust Locker; RBI says Banks not liable for loss of contents



If you thought that bank lockers are the safest place for your valuables, then think again. Do not expect any compensation for theft or burglary of valuables in safe deposit boxes of public sector banks as the locker hiring agreement absolves them of all liability.

This bitter truth was disclosed in an RTI response by the Reserve Bank of India (RBI) and 19 PSU banks.
 
According to a PTI report, stung by the revelation, the lawyer who had sought information under the transparency law has now moved the Competition Commission of India (CCI) alleging "cartelisation" and "anti-competitive practices" by the banks in respect of the locker service.

He has informed the CCI that the RTI response from the RBI has said it has not issued any specific direction in this regard or prescribed any parameters to assess the loss suffered by a customer.

Even under the RTI response, all public sectors banks have washed their hands of any responsibility.
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This bitter truth was disclosed in an RTI response by the Reserve Bank of India (RBI) and 19 PSU banks.
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According to the information availed by the lawyer, the unanimous reason given by the 19 banks, including Bank of India, Oriental Bank of Commerce, Punjab National Bank, UCO and Canara, among others, is that "the relationship they have with customers with regard to lockers is that of lessee (landlord) and lessor (tenant)".

The banks have contended that in such a relationship, the lessor is responsible for his or her valuables kept in the locker which is owned by the bank.

Some banks, in their locker hiring agreements, have made it clear that any item stored in the locker is at the customer's own risk and he or she may, in their own interest, insure the valuables.

The common feature of all locker hiring agreements states, "As per safe deposit memorandum of hiring locker, the bank will not be responsible for any loss or damage of the contents kept in the safe deposit vault as a result of any act of war or civil disorder or theft or burglary and the contents will be kept by the hirer at his or her sole risk and responsibility.

"While the bank will exercise all such normal precautions, it does not accept any liability or responsibility for any loss or damage whatsoever sustained to items deposited with it. Accordingly, hirers are advised in their own interest to insure any item of value deposited in a safe deposit locker in the bank," they have said.

Aggrieved by the responses, the lawyer -- Kush Kalra -- raised questions before the CCI -- why not just keep the valuables at home after insuring them, instead of paying rent to the bank for a locker when it is not going to take any responsibility for the contents.

He alleged that all these banks, also including State Bank of India, Indian Overseas Bank, Syndicate Bank, Allahabad Bank and others, have formed a "cartel" to indulge in such "anti-competitive" practices.

He further alleged that the bank by forming an association or cartel are "trying to limit the improvement of services which is directly affecting the competition in the market and interests of the consumer".

The lawyer has sought a probe under the Competition Act into the allegation of cartelisation by the banks in respect of the locker service.




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