RBI liberalises norms to boost forex inflows, shore up falling Rupee

Jul 07, 2022

The Reserve Bank of India on Wednesday announced measures to diversify and expand the sources of forex funding with an aim to mitigate volatility and dampen global spillovers, including letting foreign investors invest in short-term corporate debt and allowing the purchase of more government securities under the fully accessible route.

The measures taken by the central bank come against the backdrop of the Rupee depreciating by 4.1% against the US dollar during the current financial year so far (up to July 5) amid the ongoing geopolitical tensions.

“The global outlook is clouded by recession risks. Consequently, high risk aversion has gripped financial markets, producing surges of volatility, sell-offs of risk assets and large spillovers, including flights to safety and safe haven demand for the US dollar. As a result, emerging market economies are facing retrenchment of portfolio flows and persistent downward pressures on their currencies," the RBI said while announcing the new measures to boost forex inflows.

Corporate Laws

Jun 14, 2022

RBI’s Regulations Review Authority has suggested all regulations of the central bank should underline the rationale and be reviewed periodically to align them with evolving industry practices and financial landscape.

Regulations Review Authority (RRA 2.0) was set-up by the Reserve Bank of India in April last year with the objective of reducing the compliance burden on Regulated Entities (REs) by streamlining the regulatory instructions and rationalising reporting requirements.

Corporate Laws

RBI hikes repo rate by 50 bps as inflationary pressures intensify; retains GDP forecast

Jun 08, 2022

The Reserve Bank of India (RBI) Governor on Wednesday announced that the Monetary Policy Committee voted unanimously to hike the benchmark interest rate by 50 bps with immediate effect. The RBI also left its FY23 GDP growth forecast unchanged at 7.2%.

The policy repo rate now stands at 4.90%, still below its pre-pandemic level. Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) rates have been raised by 50 bps. SDF rate stands adjusted to 4.65%, MSF rate adjusted to 5.15%.

On the inflation front, the RBI revised its projection to 6.7% from the earlier estimate of 5.7% as the protracted nature of the Russia-Ukraine war puts pressure on commodity prices globally.

Corporate Laws

Appellate tribunals, a few rate revisions on GST Council agenda

Feb 16, 2023

After a gap of over seven months, the Goods and Services Tax (GST) Council is scheduled to hold an in-person meeting on February 18, where it is likely to pave the way for the setting up appellate tribunals for the comprehensive indirect tax.
According to sources close to the development, the GST Council, chaired by the Union finance minister Nirmala Sitharaman, is expected to consider two key reports, including one on the setting up GST Appellate Tribunals and another report on plugging revenue leakages in evasion prone sectors like pan masala in the coming meet

GST

If states agree, petroleum and gas can be brought under the GST ambit: FM Sitharaman

Feb 16, 2023

Finance Minister Nirmala Sitharaman on Wednesday said that should the states agree, petroleum and gas under the ambit of Goods and Services Tax (GST). "Once the states agree, we will have petroleum products in the GST," she said.
Speaking at the Post-Budget interactive session with the members of the industry chamber PHDCCI, the union minister said that the central government is completely aligning itself with the fiscal consolidation roadmap.
On the Budget, she said that the idea was to ensure that growth momentum should not be relaxed or diluted.

GST

Will use property tax data, electricity bill to increase GST base: CBIC Chairman

Feb 15, 2023

The Central Board of Indirect Taxes and Customs (CBIC) will use the data of electric meters and property tax to increase the base of goods and services tax (GST), said Vivek Johri, CBIC Chairman.
When GST was implemented, there was a GST tax base of Rs 45-50 lakh, which has now increased to Rs 1.4 crore, said Johri. The CBIC Chairman added, "We feel that there is a good scope for increasing the tax base. We will take the help of power distribution companies, take the data of electric meters and will also use the property tax data to increase the tax base of GST."
In an exclusive interview with ANI, the CBIC Chairman said the board's strategy regarding GST is that collecting revenue is its target, along with that it is also necessary to increase the tax base.

GST

Vouchers not goods or services, exempted from GST, says Karnataka high court

Feb 15, 2023

Vouchers are exempted from GST, the Karnataka high court ruled in a recent judgment, asserting that these don't carry any value and they're not goods or services either.
"The definition of 'vouchers' under the CGST Act makes it clear that vouchers are mere instrumentsaccepted as consideration for supply of goods or services. They have no inherent value of their own," a division bench headed by Justice PS Dinesh Kumar said.
"As vouchers are considered 'instruments', they would fall under the definition of 'money'..." as defined by the law, which also "excludes 'money' from the definition of goods and service" and therefore no tax can be levied on it, the HC said.

GST

Feb 15, 2023

The GST audits undertaken by the indirect tax administration in the current financial year have led to the detection of ?22,000-crore tax evasion from nearly 48,000 cases so far, Central Board of Indirect Taxes and Customs (CBIC) chairman Vivek Johri said in an interview. The indirect tax authority is now working on analyzing the corporate tax returns filed by businesses with the Income Tax department and the GST registration data to identify businesses and traders who ought to take GST registration but have not done so. This is part of a drive to widen the tax base. Johri also said there is no proposal to roll back the Finance Bill clarification that input tax credit will not be available on CSR spending by companies. The budget proposals on customs duty changes will help several industries achieve self-reliance, Johri said, citing several examples.

GST