Government to Issue Sovereign Gold Bonds

Government of India, in consultation with Reserve Bank of India (RBI), has decided to issue Sovereign Gold Bonds. The Bonds will be issued on November 26, 2015. Applications for the bond will be accepted from November 05, 2015 to November 20, 2015. The Bonds will be sold through banks and designated post offices as may be notified. The borrowing through issuance of the Bond will form part of market borrowing programme of Government of India.


It may be recalled that the Finance Minister had announced in Union Budget 2015-16 about developing a financial asset, Sovereign Gold Bond, as an alternative to purchasing metal gold.

The major features of the Bond are given below:

• Product name- Sovereign Gold Bond
• Issuance- To be issued by Reserve Bank India on behalf of the Government of India.
• Eligibility- The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions.
• Denomination- The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
• Tenor- The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.
• Minimum size- Minimum permissible investment will be 2 units (i.e. 2 grams of gold).
• Maximum limit- The maximum amount subscribed by an entity will not be more than 500 grams per person per fiscal year (April-March). A self-declaration to this effect will be obtained.
• Joint holder- In case of joint holding, the investment limit of 500 grams will be applied to the first applicant only.
• Frequency- The Bonds will be issued in tranches. Each tranche will be kept open for a period to be notified. The issuance date will also be specified in the notification.
• Issue price- Price of Bond will be fixed in Indian Rupees on the basis of the previous week’s (Monday–Friday) simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Ltd. (IBJA).
• Payment option- Payment for the Bonds will be through electronic funds transfer/cash payment/ cheque/ demand draft.
• Issuance form- Government of India Stock under GS Act, 2006. The investors will be issued a Stock/Holding Certificate. The Bonds are eligible for conversion into demat form.
• Redemption price- The redemption price will be in Indian Rupees based on previous week’s (Monday-Friday) simple average of closing price of gold of 999 purity published by IBJA.
• Sales channel- Bonds will be sold through banks and designated Post Offices, as may be notified, either directly or through agents.
• Interest rate- The investors will be compensated at a fixed rate of 2.75 per cent per annum payable semi-annually on the initial value of investment.
• Collateral- Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
• KYC Documentation- Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.
• Tax treatment- The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961) and the capital gains tax shall also remain same as in the case of physical gold.
• Tradability- Bonds will be tradable on exchanges/NDS-OM from a date to be notified by RBI.
• SLR eligibility- The Bonds will be eligible for Statutory Liquidity Ratio.
• Commission- Commission for distribution shall be paid at the rate of 1% of the subscription amount.

IIT Delhi uses lottery system to select students who will meet Mark Zuckerberg

When Facebook founder and CEO Mark Zuckerberg interacts with students and faculty at the Indian Institute of Technology in Delhi in a town hall on Wednesday, most students will be sitting out. Almost everyone of the over 8,000­ strong student community at the IIT wants to meet and, if possible, ask a question to Zuckerberg, a role model for many of them. But the venue where the tech entrepreneur is holding the town hall is too small to accommodate all of them. Only one in nine students will get an entry to the hall and they have been selected through a lottery. The hall has a seating capacity for 1,100, but only 900 of the seats are reserved for students. The entire session is being handled by a Facebook team.

It started the process last Thursday and the response so far has been huge. When an invite was posted on the IIT website, 1,300 students filled up the application form in the first two hours. Facebook discontinued the link after it got 3,500 applications. "Town hall has always been popular, but not like this one," said a faculty at IIT Delhi. "Mark is a role model for most of the students as he is easy to identify with. Also as the focus of both the institute and students is moving towards entrepreneurship and innovation, his visit has created a lot of enthusiasm." Zuckerberg is expected to speak for 15 minutes and spend the next hour answering questions from the audience.

Arshad Nasser, one of the lucky students selected to participate in the town hall, said there would be no direct questioning, though most town hall meetings allow that. "I wonder whether my question would be read out on Wednesday." Nasser, who is in his final year of Master's in Design, said he was not sure whether it was the question he had put in the application form for Zuckerberg or the lottery that got him through. His question was: "Will FB extend itself as a physical product so that it can interact with devices at home and also connect with social circle?"

Jyoti Meena, a final year B.­Tech student, said many of her friends who could not make it to the list were upset. Still, she said the Facebook chief 's visit itself has created excitement on the campus. "Before any town hall, there are posters, banners, etc. but this time there was nothing but still the entire campus is abuzz with FB," she said. Her question for Zuckerberg is: "What was your Eureka moment that helped you decide that to pursue with FB?" Dhiritraj Das, a third ­year dual degree (Bio-Chemical engineering and Bio-­technology) student, is one of the majority who could not make it to the list of students who received invites for the town hall. Das is already an entrepreneur and is busy bringing an e-commerce venture, called All Day Sports, to life. "I wanted to ask Zuckerberg a question on the Internet.org. As I would want to know what technology support will FB provide for this so that rural and backward areas in the country get access to the Internet?"

A Facebook spokesman said the upcoming event is a rare occasion for the company to have the media invited in any country. "It is mainly because India is one of the countries with largest users outside of the US for the company," he said. Zuckerberg in his earlier speeches at the company headquarters had shared his views on India. "India is personally very important to the history of our company here. This is a story that I have not told publicly and very few people know," he had said. During his visit, Zuckerberg is likely to be mostly in Delhi, said a source.

-- CA Kasliwal Ambar

Reference -

• ET

What the Wolf Of Wall Street has to say on Indian Economy

Views of Jordan Belfort

Market is current on bumpy ride where we are seeing one day market is going up and second day market corrects. This is a very negative sign as market is highly volatile and is making new low at each trading session. Last week we had made a low of 7850 and this week we made a low of 7650. Now the whole street is taking of 7500 and 7200. But our conviction is clear that market has bottomed out and we don’t see any further pain on street. A 50-60 pts correction is possible but chances of markets getting back to 8000 levels are high. Currently global concern is resulting in shrinking on market and in compare of Global scenario Indian fundamentals are far better so every fall is a buy and this is the right time to buy. Valuations are quite cheap and long term bet is surely on India. Banking stock has been heavily hit in last 15 trading session. Bank nifty has corrected from 19000 to 16500. PSU Bank like SBI, OBC, BOI, Corporation Bank are all trading at 52 and 72 week lows. Most of the banking stocks are available at 2013 lows so we advise to buy these stocks as rebound in PSU banks is definitely around the corner. Most of the PSU bank are available at P/BV of 0.32 and lower which is surely a buying opportunity. We are once again advising you that currently the whole street is in a mood to sell and this is the best opportunity to buy as the same people will come back to buy at 8000 and 8100 levels. So don’t miss the chance. We, at CNI, are bulls on street. Currently market has been surrounded by full negativity.

No one is ready to buy. We are talking with many retailers, brokers, investors and all are afraid to invest as all have one opinion in common that nifty will touch 7000 levels. Media, Analyst, Foreign brokers all are talking negative and are bearish on stocks. Poor monsoon, failed parliament session, Bihar election and earning of companies is in the mind of the people. We believe Indian economy is in a far better state than 2013. We have strong foreign reserves to protect downside risk of our currency. Crude price is another boon for the economy. Coming to reformative action Govt. action will fail till 2016 as Rajya-Sabha fails majority and will gain majority only in 2016. So we should give the new Govt some time and wait for results. Bihar election is a strong trigger and we estimate NDA Govt. will gain majority.

-- CA Kasliwal Ambar

Update: No more Service Tax on Yoga Training

CBEC vide its Notification No. 20/2015-Service Tax dated 21-10-2015 amended Notification No. 25/2012-Service Tax, dated the 20th June, 2012 to provide following new exemptions from levy of service tax:

No More Service Tax on Yoga Training:

Now 'Yoga' gets place in Mega Exemption Notification w.e.f. 23-10-2015. Earlier the exemption was extended to only Services by an entity registered under section 12AA of the Income tax Act, 1961.

-- CA Kasliwal Ambar

Amazon Growth Story continues - Business quadrupled in 2015

Amazon Inc's India business has quadrupled in 2015 over the previous year as customers and sellers have risen more than threefold, helped by a similar surge in "fulfillment capacity" as online shopping gathers momentum across the country. "Active customer accounts are up 230 per cent year ­over ­year. We are in the middle of the Diwali season that is going really well," Brian Olsavsky, chief financial officer at Seattle based Amazon, said on an investor call on Thursday, the first time that these numbers have been made public. "The number of sellers has grown more than 250 per cent year ­over year. Sales are 4x what they were last year." The Indian unit of the world's largest consumer marketplace has been adding products at a rate of 40,000 per day this year with 90 per cent of sellers using its logistics and warehousing services. "As a result, we've tripled our fulfillment capacity       year ­over­ year. So we are very encouraged, and continue to invest there very heavily," Olsavsky said.

A month ago, the company injected Rs 1,237 crore into Amazon Seller Services Pvt, the biggest infusion of capital into its Indian flagship since entering the country in 2013. India is one of the fastest­ growing markets for the US online retail giant and Amazon's founder Jeff Bezos had pledged to invest $2 billion in local operations last year. Given the faster­ than ­expected expansion, that number may increase, an Amazon official has indicated. Amazon expects India to overtake Japan, Germany and the UK to become its largest overseas market besides becoming the quickest to reach $10 billion in gross merchandise value (GMV) in the company's history, Diego Piacentini, Senior Vice­ President for international business, told ET last week. Since India bars foreign capital in business­ to ­consumer (B2C) e-commerce, Amazon operates a marketplace for vendors to sell products to customers, as do Flipkart and Snapdeal.

The company will be looking to keep pace as investors have been pumping money into homegrown rivals such as Flipkart and Snapdeal, seeking a slice of India's burgeoning e-commerce market. This is set to rise to $60­70 billion by 2019 from $17 billion in 2014, according to a February report by The Boston Consulting Group and Retailers Association of India. Experts feel Indian Internet companies may need to chart a longer and more tortuous path to profitability though. According to a recent JP Morgan report, India will likely see consolidation among the raft of players populating particular categories as considerations of scale, better pricing power and returns intensify. This consolidation may either be natural or forced, the latter more likely facilitated by investors, it said.

"The funding spigot can spur innovation only up to a point — 'excess' capital can end up funding more expensive customer acquisition strategies, greater discounting and leading to a more elevated cost structure," Viju George wrote in the JP Morgan report. India's aggressive e-commerce companies have been trying to outdo each other in big ­ticket fundraising. In July, Flipkart raised $700 million from a clutch of foreign investors, pegging the Bengaluru ­based company's valuation at $15 billion and making it one of the hottest global start-ups in recent years.

-- CA Kasliwal Ambar

Reference -

• ET

China makes another aggressive monetary policy move

China's Central Bank cut interest rates for the sixth time since November on Friday, and it again lowered the amount of cash that banks must hold as reserves in another attempt to jump-start a slowing economy.

China's monetary policy easing is at its most aggressive since the 2008/09 global financial crisis, underscoring concerns within Beijing about the health of the world's second­ largest economy.

The People's Bank of China (PBOC) said on its website that it was lowering the one ­year benchmark bank lending rate by 25 basis points to 4.35 per cent, effective from Oct. 24. "The People's Bank has delivered another jolt of stimulus," analysts at Capital Economics said in a note to clients, but added that they were "still waiting for clear evidence of an economic turnaround". 

"We are retaining our forecast that benchmark rates and the reserve requirement ratio will both be cut once more before the end of the year, with a further move in both early in 2016." Sobering economic data in the third quarter has demonstrated the daunting challenges faced by the country's leaders, not least in attaining the 7 per cent growth target set by the government. Data released on Monday showed China's economy grew 6.9 per cent between July and September from a year earlier, dipping below 7 per cent for the first time since the global financial crisis. 

The one ­year benchmark deposit rate was lowered by 25 basis points to 1.50 per cent. The RRR will also be cut by 50 basis points for all banks, taking the ratio to 17.5 per cent for the country's biggest lenders, the PBOC said in a statement. Buoyed by China's easing, which came late in the evening in Asia, European shares turned higher and the Chinese offshore yuan fell against the US dollar. The pan-­European FTS Eurofirst 300 extended gains to trade 2.2 per cent higher at 1,493.60, with miners jumping 2.9 percent in the minutes after the move. China's offshore yuan hit a four­ week low of 6.3958 to the dollar after the decision.

-- CA Kasliwal Ambar

Reference - 

• ET

If only a chip can bring such a big change in the Rural area!

A tiny chip designed in Bengaluru, the size of a postage stamp, might hold the answer to connecting India's rural population to the Internet, an ambitious goal being chased by the likes of Google, Facebook and Microsoft.

The chip, called Pruthvi, powers a system which can use television White Space — or wasted spectrum bandwidth — to beam Internet to scores of households. This innovation by Saankhya Labs, is important in today's India, where on one hand the government is pushing its ambitious 'Digital India' programme and on the other, large technology companies are working on similar goals.
"World over regulatory authorities are using or planning to use this spectrum for their respective connectivity programmes. India can take the lead in both technology and the markets for TV White Space-based broadband delivery.

And how long can the government not push the envelope... It's got to be expedited sooner than later," said Parag Naik, CEO and Co-founder of Saankhya Labs.

Founded in 2007 by Naik, Hemant Mallapur and Vishwakumara Kayargadde, the company has developed a system called Meghdoot, powered by its Pruthvi chip, which can utilise the existing TV White Space bandwidth available in India to provide wireless broadband to remote areas. TV White Space refers to the unused spectrum between active TV channels that are traditionally used for over-the-air transmission using TV towers and rooftop antennas. In India, this mainly refers to the spectrum used by the likes of Prasar Bharti.

The Meghdoot product family consists of a base station and user-side modem that can together provide Wireless Rural Broadband using the TV White Space spectrum from 400 to 800MHz.

The technology does not require line-of-sight, thus ensuring longer range, and can serve up to a radius of 10-15 km depending on antenna tower height and transmit power. The range can also be further increased with more powerful and taller antennas.


The company is soon set to conduct field trials across the country in collaboration with IIT-Bombay, IIT-Delhi and IIT-Hyderabad. They are also in discussions with Microsoft to do trials at Srikakulam in Andhra Pradesh.

The Meghdoot product line is compliant to the Wi-FAR standard, making the device compatible for use in other countries too. The company is also engaged with partners for trials in the Philippines, the US and Singapore.

-- CA Kasliwal Ambar

Reference -

• ET

GOI makes changes in Indirect tax rates

Government of India has made the following changes in indirect tax rates, effective from 19th October, 2015:

1) In view of the continued fall in international prices of wheat and the anticipated adverse impact of increased imports during the first half of this financial year, basic customs duty on wheat has been increased from 10% to 25% for a period upto 31.03.2016. Notification No.51/2015 ­Customs, dated 19.10.2015 may be referred to in this regard.

2) Specified biodiesel is exempt from central excise duty. However, its inputs namely, RBD Palm Stearin, Methanol and Sodium Methoxide are chargeable to central excise duty leading to CENVAT credit accumulation. Central excise duty has been exempted on RBD Palm Stearin, Methanol and Sodium Methoxide used in the manufacture of such biodiesel subject to actual user condition for a period upto 31.03.2016. Notification No.42/2015­ Central Excise, dated 19.10.2015 may be referred to in this regard.

-- CA Kasliwal Ambar

CBDT working towards making AO-taxpayer communication hassle-free through email

Use of email based communication for paperless Assessment Proceedings-reg.

F. No. 225/267/2015-ITA-II
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES
NEW DELHI

Dated: October 19, 2015

To

The Principal Chief Commissioners of Income-tax, Delhi / Mumbai / Bengaluru / Ahmedabad / Chennai

Subject: Use of email based communication for paperless Assessment Proceedings-reg.

1. In order to improve the taxpayer services, enhance the efficiency and to usher in a paperless environment for carrying out the assessment proceedings, CBDT has decided to initiate the concept of using email for corresponding with taxpayers and sending through emails the questionnaires, notice etc. at the time of scrutiny proceedings and getting responses from them using the same medium on a pilot basis. This would eliminate the necessity of visiting the Income-tax Offices by the taxpayers, particularly in smaller cases, involving limited issues and where taxpayer is able to provide details required by the AO without necessitating his physical presence.
2. Steps are being taken by CBDT to devise suitable mechanism for setting up a standardized platform for making such email based communications between the taxpayer and the Income-tax Department seamless and user friendly. To start with, it has been decided to launch a pilot project in this regard in five non-corporate charges at Delhi, Mumbai, Bengaluru, Ahmedabad & Chennai stations. Initially, 100 cases for e-hearing could be identified in each of these charges and major part of assessment processing should be conducted in electronic mode. Also, the cases covered under the aforesaid pilot project should be those which have been selected for scrutiny on the basis of AIR/CIB information or non-matching with 26AS-data. Consent of taxpayers should also be obtained in the beginning and cases of only willing taxpayers be considered under the pilot project. The officers of the Department, through their official e-mail IDs, can interact with the taxpayers at their e-mail IDs as mentioned in the respective returns of income.
3. Board desires that necessary steps may accordingly be taken for initiating the pilot project on top priority.

(Rohit Garg)

Deputy Secretary to the Government of India.

- CA Kasliwal Ambar

Wal­mart suspected to have paid millions of dollars in bribes in India!

America's multinational retail corporation Wal­Mart is suspected to have paid bribes worth millions of dollars in India, according to a media report. In a major report, The Wall Street Journal said Wal­Mart's "suspected bribery" unearthed in India involves thousands of small payments to low ­level local officials to help move goods through customs or obtain real ­estate permits.

 "The vast majority of the suspicious payments were less than USD 200, and some were as low as USD 5, the people said, but when added together they totalled millions of dollars," the daily said. In 2013, Wal­Mart shelved plans to open retail stores in India by severing a joint venture with Bharti Enterprises Ltd and instead decided to become solely a wholesaler there, the report said. Walmart, who was pushing the previous UPA regime for opening of the multi-­brand retail sector was also involved in lobbying before the US Congress in this regard, Congressional disclosure reports have said in the past few years. According to the report, Wal­Mart's massive bribery efforts is unlikely to bring in any penalty on it as its Indian operation does not yield any profit under the provisions of the Foreign Corrupt Practices Act (FCPA) of the United States. "Because penalties under the FCPA are often connected to the amount of profit the alleged misconduct generated, the payments in India wouldn't be likely to result in any sizable penalty, since Wal­Mart's operations there haven't been particularly profitable, said people familiar with the matter," the daily reported. There was no immediate response from Wal­Mart's corporate headquarters here on the Wall Street Journal's report on its bribery in India. According to The Wall Street Journal, federal investigators "found evidence of bribery in India, centering on widespread but relatively small payments made to local officials there," during the course of its "high ­profile federal probe" into allegations of widespread corruption at Wal­Mart Stores Inc's operations in Mexico. The investigations though have found little in the way of major offenses in Mexico, and is likely to result in a much smaller case than investigators first expected, the daily said.

- CA Kasliwal Ambar

Reference -

• ET

ED unearths another money laundering case

The enforcement directorate has unearthed yet another trade-based money laundering case worth over Rs 550 crore perpetrated by allegedly using banking channels of nine major national and international banks, with illegal remittances being sent to Hong Kong and China.

The agency has also arrested a Ghaziabad-based foreign exchange operator for sending these illegal remittances to these foreign locations.

The case was busted after the agency got leads from an accused in the Bank of Baroda money laundering case, where suspicious remittances of an estimated Rs 6,000 crore came to light recently and which is being probed by multiple agencies including CBI, SFIO, Income Tax department and the ED.

A fresh FIR has been lodged in connection with this case registered under the Prevention of Money Laundering Act (PMLA).

The ED has arrested Manish Jain, operating a forex firm in Ghaziabad, Uttar Pradesh, last night for allegedly depositing and remitting Rs 505 crore between 2006 and 2010 from the Rajpur branch of Oriental Bank of Commerce (OBC) in an illegal manner against imports that “never took place.”

These remittances made through 66 accounts in the said OBC branch, the ED said, were subsequently sent to an HSBC bank branch in Hong Kong and then to China in return for settling dues of various importers in India with Chinese suppliers.

On the agency’s trade-based money laundering radar, where accused traders evade customs duties and taxes to generate slush funds, are seven other banks in the national capital region like ING Vysya, ICICI, Kotak Mahindra, Indusind, Dhanlaxmi bank, YES bank and DCB bank which the agency believes have been “misused” by Jain and others to perpetrate this fraud.

Sources said Jain runs two firms dealing in foreign exchange in Hong Kong and he used at least 11 “bogus firms” to send out a total of Rs 557 crore during the said period.

The ED suspects that Jain used these “unaccounted” funds to create tainted assets for himself and his associates by using fake or dummy identities and documents thereby misusing the Indian banking channels and RBI guidelines.

“The latest case bears resemblance to the Bank of Baroda case and the agency got leads about Jain and his operations on the basis of the questioning of Sanjay Aggarwal who is already under arrest in the BoB case,” ED sources said.

In the BoB case, the agency had arrested Kamal Kalra, working with the foreign exchange division of HDFC bank, Chandan Bhatia, Gurucharan Singh Dhawan and Sanjay Aggarwal. The ED had alleged that these accused, acting as middlemen for these illegal acts, worked for at least 15 fake companies out of the total 59 which were involved in the crime also being probed by the CBI.

The agency said Jain used to run the Ghaziabad-based forex firm between 2006 and 2014 which was later operated by Aggarwal between 2014-15.

-- CA Kasliwal Ambar

Reference -

1. http://www.livemint.com/Politics/FXL8lnX8Qm9ht9MHW4I75L/ED-unearths-another-BoBlike-case-involving-8-banks-HSBC-HK.html

Aadhar linked cellphone and IRIS are going to revolutionize India

PREPARE YOURSELF FOR A REVOLUTION

IN FINANCIAL MARKET

WHICH NEVER HAPPENED IN THE HISTORY OF MANKIND

Recently, Mr. Nandan Nilekani, a founder team member of Infosys and generator of the concept of Aadhar made one presentation of the impact this Aadhar linked cell phone will create and revolutionize the market in general and finance market in particular in India / world is a worth watching clip. I think the presentation of those 30 minutes will make you spell bound and speechless. How the technology is going to change the way we live in this world since the decades.... Major highlights of the presentation are as under.

1. There will be a massive disruption in financial services on back of technology revolution.

2. The telecom revolution has changed the desktop based environment to mobile interned based environment.

3. “WhatsApp movement” is the concept to understand this revolution because today 30 billion messages in a day are passed through WhatsApp in the world surpassing the SMS by large margin. This WhatsApp movement like revolution is going to take place in the world of finance making the concept of traditional banking and lending to go away.

4. We are moving from cash based society to cashless and digital society very very fast. Today India has more 900 million mobile users (More than 90 crores) which is a record in itself. The Aadhar when linked with the mobile set with IRIS authentication on will change the world we live in.

5. Today electronic clearing service NEFT-RTGS and IMPS have overtaken traditional payment system. With these 900 million mobile users, a mega trend is underway, which we are unable to apprehend. To put it in simple words, every mobile user will be an ATM.

6. When IRIS authentication (Biometric authentication linked with Aadhar server) will be on, the 900 million mobile users will be able to have online kyc, online authentication, online payment and online receipt on the basis of Unified Payment Interface (UPI). Smart phone will replace all type of debit and credit cards and Paytm like system will be fully operational. Physical cash to digital cash and digital cash to physical cash convertibility will be a game changer. Digital wallet and digital locker will revolutionize the security system. Enabling pear to pear payment system will do away many intermediaries and will be reimagining the infrastructure we have at present.

7. The whole process will lead to explosion of innovation, death of many businesses and birth of new ventures and business. India will become data scare to data rich country in five years in both, on consumer and business side. Credit process and credit appraisal will become obsolete and online loan payment will become possible. Think of 900 million people coming on one platform and remain connected!!! Almost all functions of the bank, government and taxation department will be done by Aadhar linked phones. This is even more important in the sense that IRIS authentication on cell phone is available only in India, no one has this system in the world!!!

8. Friends, this is not far away because the IRIS authentication on cell phone is practically started and will become a mass reality soon. So prepare yourself to live in the digitalized India with absolute transparency, no paper work, no bureaucratic intervention, no tax terrorism and much much more.

Watch "Disruption in Financial Services: Nandan Nilekani at TiE LeapFrog" on YouTube - https://youtu.be/aGM5TvAUF00

- CA Kasliwal Ambar

The Great Indian E-Commerce Liftoff

There's no better time for a bargain - India's three biggest online market places touted discounts of as much as 80% as they launched a festive season shopping campaign amid a blitz of advertising. But the enthusiasm of early birds was dampened somewhat -there were few eye-popping deals on the latest gadgets and fashion brands on the first day on Flipkart or Amazon India. But brands were relieved that their efforts to rein in price cuts had worked, confirming the trend of ecommerce firms moving away from extravagant discounts. Instead they are focussing on better financials. Still, deep discounts were available on online-only and ecommerce-focused products such as those made by Micromax, Onida, BPL and Motorola, and on older models of gadgets and smartphones, said industry executives. A similar trend has been seen in apparel and accessories.

This marked a sharp departure from last year, when the latest models of iPhone, Samsung Galaxy phones and Sony televisions were on sale. The ecommerce companies offered maximum discounts on their in-house apparel brands where margins are twice that of other clothing.“None of our fresh merchandise is on discount except old or last-season stock,“ said J Suresh, chief executive of Arvind Lifestyle Brands, which sells brands such as Gap, US Polo, Wrangler and Calvin Klein.

Conservative Approach

He said companies were more conservative this year, ordering about 1.2 times the normal stock for the discount period unlike last year when they were targeting to grow sales by five times. “The focus is surely on margins and profitability,“ Suresh said.

The chief of a leading shoe brand said deep discounting of 60-80%, which is usually offered during endof-season sales by the ecommerce firms, was missing on the first day.“The madness was not there and even I was expecting good deals on international brands for my person al purchase where discounts were hardly 4-10%,“ he said, requesting anonymity.

The absence of deep discounts on the hottest items is good news for brick and mortar retailers, who have been suffering on account of lower prices online.

Panasonic India managing director Manish Sharma, who is also president of the consumer electronics lobby group, said all big brands had advanced their Diwali promotional offers in the offline trade to boost consumer sentiment and offer a level playing field.

“The e-commerce marketplaces too are in a consolidation mode and have realised it may not be healthy to continue to burn money on discounts. This year's online Diwali sales is a healthy sign and will ensure both online and offline will coexist,“ Sharma said.

Haier India president Eric Braganza said the company had signed pricing agreements with ecommerce marketplaces such as Flipkart to ensures that there would be no sharp price cuts on its products.

Amazon and Flipkart started their festive season sales on Tuesday while Snapdeal kicked things off on Monday. Discounts were attractive on online-exclusive smartphone brands such as Motorola, Xiaomi, Yu Yuphoria and OnePlus 2. Price cuts were also offered on baby products, general merchandise, home décor and personal care products. The sale will carry on until the end of the week. Flipkart said there had been a surge in app downloads in anticipation of the sale.

“It's great to see 1.6 million app installs in the last two days, which is a great indicator that India has been preparing well for The Big Billion Days,“ said Mukesh Bansal, head of commerce platform at Flipkart.

The sale was off to a relatively glitch-free start. Flipkart, which was hit by glitches last year owing to heavy traffic, has staggered its apponly discounted sales over five days, across various categories such as fashion, home appliances, electronics and books.

The Big Etailing Rivalry

After Flipkart announced the October13-17 campaign, Amazon and Snapdeal announced similar exercises--a point that a company executive brought up.

“Random thought: Checked out TOI. Looks like we set the dates for when others do their festival sales :)! Go BBD!,“ Flipkart Chief Product Officer Punit Soni tweeted.

Rohit Bansal, Co-founder of Snapdeal, tweeted: “Looks like India has chosen @snapdeal as the app of their choice this festive season!“ Flipkart said it “saw 25 items sold per second.“ The company said 10 lakh products were sold in the first 10 hours with 6 million visits from across the country.

“This is pushing the limits, the volumes are much higher than last year,“ said Naman Sarawagi, Co-founder and CEO of FindYogi, a chat-based shopping assistance app. A clearer picture is likely to emerge when the sale concludes later this week.

Snapdeal said that it sold five mobile phones every second on Monday as it racked up total sales of $100 million. “Compared to last year, the infrastructure has greatly improved,“ said Sarawagi.

Amazon India claimed that the first day of the festive sales was the biggest day in its history, four times bigger than the peak of last Diwali.Traffic from mobile was over 70% and lakhs of new customers came from cities like Aurangabad, Malappuram, Dhanbad, Kannur, Tiruchirappalli, Jamshedpur and others.Small and medium sellers reported up to ten times more sales than their daily sales. Grocery & gourmet witnessed a three times growth in unit terms as compared to our previous biggest day and five times compared to the pre-sale period. “We have seen an enthusiastic and energetic response from our customers through the year and in all our promotions including the first day of our Great Indian Festive Sale today,“ an Amazon India spokesperson said.

Ambulance On Standby

Most visitors were from cities like Bengaluru, Delhi and Chennai. Ludhiana, Lucknow and Bhopal were among the top cities from non-metros, said Flipkart, where employees have been working round the clock to keep systems stable. Flipkart set up shuttle services for employees to be picked up and dropped and even put an ambulance and masseurs on standby.

"With over 20 million visits from across the country on the first day, the fashion sale has been a big hit amongst our customers. For electronics - it will be even bigger on 15th October as we have lined up a range of smartphone launches for our customers from brands like Google, Motorola, Huawei, Intex and Micromax. All these new launches will have aggressive launch and exchange offers along with exciting bank discounts," a Flipkart spokesperson said.

Nearly 1.5 million shoppers bought goods worth over $100 million from Flipkart during the sale in 2014 but the site stuttered as a large number of people sought to access the site. This year's Billion Days sale is expected to be five times in size, according to one Flipkart employee who requested anonymity.

Meanwhile, good discounts were available on older iPhones and iPads besides LED television models of LG and some apparel brands.

- CA Kasliwal Ambar

New Reward Scheme to catch Duty Evasion

The Government has framed a system of rewards for people who help in the detection of the tax evasion. The following are a few guidelines for the people who like to help detection of Central Excise Duty evasion/frauds:


Under the existing Reward Scheme, Government of India grants handsome rewards to informers who provide specific information leading to seizure of goods, currency, bullion or leads to detection of duty evasion including wrong declaration of quantity, description, value etc.

The information should contain details of modus operandi being adopted by the tax evader. Details like name & address of the firm, addresses of the key persons, place where records of clandestine clearances are secreted, details of flow of illegal funds are considered important piece of information.

Your name and identity will be kept absolutely confidential.

- CA Kasliwal Ambar

Do Last Minute Bookings help you save money?

The early birds may not get to fly cheaper any more. Airlines seem to be reducing fares closer to the travel date, an analysis of tickets on offer for travel on six key sectors showed. The fares quoted for travel on October 17 were more expensive when booked 30 days in advance than 10 days.

These select trunk routes have seen capacity addition by airlines in recent times.

"With the added capacity on the top metro routes, and lower load factors in the first half of October compared to last year, airlines have reduced fares closer in to get more people to fly," said Amit Taneja, chief revenue officer at online travel portal Cleartrip.

The lower fares benefit customers and airlines are also seeing higher overall revenue as the lower fuel prices enable them to operate profitably even at low fares, said Taneja.

About 63 flights operate from Delhi to Mumbai and vice versa. Other city pairs like Bengaluru-Mumbai and Mumbai-Hyderabad have 32 and 21 daily direct flights, respectively, and many more flights with stopovers. Pune and Chennai and Kolkata-Bengaluru have seven and 12 flights, respectively.

Airlines added about 18% seats this year, in sync with over 20% growth in passengers that the domestic market registered between January and August. In all, airlines offer about 300,000 seats on domestic sectors.
Another industry watcher said the airlines are reducing fares closer to the departure due to lower bookings. "The reason we are not seeing a lot of advance bookings is because people are spending less. Less expenditure by people is due to the economic situation, which is not in the best of health," said Ajay Prakash, former president of Travel Agents Federation of India and a travel agent.

Prakash said the demand for advance bookings is still not high despite airlines offering lower fares on the back of cheaper fuel. The airlines are also offering cheaper last-minute fares, as much as 47% lower than that last year over the recent long weekends.


When it comes to airfares, dynamic pricing seems to be an evolving concept. What's required is transparency, so that consumers know when to avail the best rates. A rule of thumb used to be to book six weeks ahead and avoid weekend schedules.

That may have run its course. One no-frills carrier wants passengers to purchase tickets three months in advance for the lowest fares. The way ahead is to better match vacant seats with demand for more attractive fares. It pays to repeatedly check and compare fares online.

-- CA Kasliwal Ambar

Avoiding complaints from your clients' may affect your firms reputation.

Dear Friends,

Research shows that as many as 66% of disgruntled clients' will most likely choose not to work with you again, for a faulty solution or experienced bad service. (Source : Google)

Here are seven ways to avoid losing clients — and save your reputation.

Tip #1 : Show that you care

Listen to what your client has to say to determine the problem and offer a quick resolution. It's important to stay professional and avoid getting emotional, but it's equally important to show your human side and demonstrate that the client is not just another number for you.

Just in case you need numbers to actually care: A 2014 study suggests that a completely satisfied client contributes 14 times as much revenue as a somewhat dissatisfied one (Source : Google)

Tip #2 : Throw away template answers

You should take a one-on-one approach for every aspect of your communication with your client. Generic copy-paste emails won’t do. Your voice and professional opinions need to be heard and, most importantly, you need to match them to your client's situation and to the solution you are providing.

Show your client a personalized approach and try to put yourself in your clients' shoes before you answer. Research suggests that more than 55% of your clients will be willing to pay more for better client service. And better means more individualized and personalized attention. (Source : Google)

Tip #3 : Avoid lengthy discussions

Try to focus on facts and don't get yourself dragged into disputes over who's right and what's right.

Proving your point will not get you any extra client love. Your clients – even those most upset – expect to be listened to, encouraged that their issue will be taken care of, and offered a resolution.

In a typical business, 42% of client service agents are unable to efficiently resolve customer issues due to disconnected systems, archaic user interfaces and age-old methods. (Source : Google)

Don’t close yourself off in a golden cage of old structures. Take the road less travelled.

Tip #4 : Offer a fast and effective solution
Unhappy clients will keep contacting you until you resolve their problem and make sure that help is coming. It's important for you to offer quick and reliable assistance. At the same time, you need to be realistic and not over-promise.

2012 research indicates that 33% of clients would recommend someone that provides a quick response, even if that response is ineffective. (Source : Google). This speaks about the need of time-efficient response to your client’s needs.

As long as you stick to the facts, you will gain clients' gratitude for responsibly handling their issues. You already have the skill set and experience to make the best possible short-term solution in a short amount of time. Be honest with your client about their options.

Tip #5 : Don't let the issue escalate

Finding a solution may take some consultations and follow-up, but remember that in the world we live in today, clients(especially those disgruntled ones) count on fast resolution. If they don't get it, they'll go on Facebook or Twitter to voice their frustration. Don't ignore any complaint; deliver what you promised and don't let the issue escalate to the point where it causes your firm, a loss of reputation.

Nowadays, your client is twice as likely to post a negative review about your client relationship as opposed to a positive one, and they are four times more likely to switch to the competition if they are dissatisfied with the service.

This is not to say you have to seal any issue that might have presented itself and never speak of it in public. When it comes to issue resolution, think fast and act faster. But don’t be afraid to give a creative apology if your client has been damaged by the issue.

Tip #6 : Train your staff so they can do their job right

This one is well-meant advice for those of you who employ more than just yourself in your client relationships. Your client service personnel are always out there on the battlefield, handling debates with unhappy clients and trying to put-out fires. Make sure they have all the support they need to assist and support others.

Share with them the company's values and guidelines so that they are never surprised by a question from a client; collect feedback from clients and try to improve your services as much as possible; show your staff what is doable and what is not doable when handling complaints; invest in brainstorming and training sessions so that they can provide top quality service. Don't be shy to include new market solutions that will save them time and effort.

Tip #7: Minimize negative reviews

Negative reviews can be very costly for your business. Show your clients you are ready to listen to their complaints before they go and rage about your service.

Resolve their problem fast and effectively by providing client service by phone, mail, skype etc. Your clients will reward you by staying with you — instead of choosing another professional.

-CA Kasliwal Ambar

E-facility to view tax and computation sheet for demand raised by AO launched

Income tax Department enables e-facility to view tax and computation sheet for demand raised by Assessing Officer (AO).

Earlier when a taxpayer submitted an objection to an Outstanding Demand appearing in his case in "My Account"on e-filing portal of Income-tax Department, he was not able to view anything further except his own objection. If the demand was raised by CPC then assessee had to verify it by comparing his filed ITR with Sec. 143(1) Intimation. However, where the demand was raised by the jurisdictional Assessing officer then he had to visit the department for getting intimation under section 143(1) in the event of not getting it at communication address. During this process assessee had to face many difficulties and it took long time.

Now the facility to view tax and computation sheet for demand raised by Assessing Officer is made available to the assessee in the e-Filing portal. Thus he can now verify his return with the computation sheet and see the variance and reply accordingly to the department.

To view computation sheet, the assessee has to simply

1. Login to the e-filing portal
2. e-file
3. Click on 'Response to Outstanding Tax Demand'
4. Click on download button next to demand amount
5. Download the details in pdf

CA Kasliwal Ambar

Maharashtra Govt. decides to hike Stamp Duty

The Maharashtra government has decided to allow a 1 per cent increase in stamp duty on property transactions, which will increase overall costs for home buyers in Mumbai, the country’s most expensive real estate market.

The Cabinet had on Tuesday approved a proposal for the increase in stamp duty on property transactions to fund major transportation projects such as the Metro and Monorail corridors. With this, the stamp duty in Mumbai will go up to 6 per cent although senior officials in the revenue department admitted that the Centre had issued guidelines urging states to cap stamp duty on property transactions at 5 per cent. The new rate will come into effect once the government issues a notification.

Senior officials also confirmed that the state government was actively considering a move to levy cess on Transferrable Development Rights (TDR) certificates as means to raise additional revenue. With increased revenue expenditure and revenue collection below par worsening the state’s overall financial position, the finance department is pushing for the move, sources confirmed.

CA Kasliwal Ambar

Lionel Messi facing up to 22 months in jail!

Lionel Messi is facing up to 22 months in jail if he is found guilty of defrauding the Spanish tax authorities.

Prosecutors had argued that the Argentina superstar had no case to answer after he and his father were accused of defrauding the Spanish authorities of nearly £3.5m between 2007 and 2009.

The prosecutors said they believed the Barca forward had no knowledge of the fraud which they alleged was carried out by his father Jorge.But the judge has now accepted the advice of the state attorney, who states that Messi should also stand trial on three counts of tax evasion.The maximum sentence for the offences is 22.5 months. Messi and his father paid the Spanish authorities a 'corrective payment' of £3.7m after they were formally charged in June 2013.

- CA Kasliwal Ambar

Property prices will be hit by tax on unsold inventory held by developers and builders

According to tax authorities, real-estate companies should have to pay tax based on Annual Letting Value (ALV) on unsold flats as they are the owners of the flats and it does not matter whether the properties are rented out or not.

In a bid to arrest hoarding of residential flats by developers and increase supply across the country, the income-tax department has decided to tax realtors on estimated annual rentals.


The tax could be anywhere between 15% and 20%. The move is as per the central action plan for 2015-16, under which the I-T department can levy tax on any unsold flat by treating it as 'income from house property' under Section 43-CA of the I-T Act, 1961.
According to tax authorities, real-estate companies should have to pay tax based on Annual Letting Value (ALV) on unsold flats as they are the owners of the flats and it does not matter whether the properties are rented out or not.

This means inventory of builders will be taxed on the basis of notional ALV -- a value on which tax has to be paid on the annual value of house property or the rent actually earned, whichever is higher.

A senior IT official said, "The builders' lobby has been creating artificial scarcity through hoarding of flats, only to sell them at higher prices later".

It has been noticed that this practice has been in vogue for over a decade and such flats or stocks are shown 'unsold' in the books of accounts while the main aim was to rig the prices upwards, said a tax official on condition of anonymity.

Taxing unsold stocks will help in two ways, according to a senior I-T official. One, this brings significant revenue, and second, it will force real-estate players to either sell their unsold flats at market-determined price. "Paying tax will further affect their bottomlines," the official, who did not wish to be named, told dna.

According to a recent report on the real-estate market in India by an international property consultant, unsold flats in six major cities hit the highest at 6.88 lakh units in the January-March quarter.

According to the report, it will take 72 months for builders to clear the inventory in Delhi-NCR and 46 months in Mumbai.

So far, unsold projects of builders were exempted from income-tax under the 'stock-in-trade' category. The I-T department believes builders would release more flats into the market, if they have to pay tax on them.

"Real-estate companies show their finished apartments as stock-in-trade and income from these are shown as business income, as in most other businesses. In a rising market, several developers hold apartments to benefit from the price appreciation that will accrue a few years after the project is complete," said a real-estate consultant.

A few years ago, when there was an attempt to tax such unsold stock, builders had moved court. However, the court gave a judgment in favour of the department in 2012.

The court had validated the I-T department's argument that builders will have to pay tax based on the ALV method, irrespective of the fact that these flats were not rented out. The department has now decided to levy this tax uniformly across the country after the proposal was cleared by the finance ministry.

- CA Kasliwal Ambar

Reliance Industries in trouble?

Reliance Industries in trouble?

Reliance Industries' corporate debt has ballooned to around Rs. 1.60 lakh crores and rising. The company borrowed tremendous amounts of money over the last few years and their debt doubled in the same period [1]

Many companies borrow to fund future growth, but Reliance ended up investing its borrowed money in oil reserves, petrochemicals and shale gas reserves. The prices of all of these have gone down significantly and thus Reliance is not generating enough revenue. Last year, for example, saw Reliance's operating revenue go down by Rs. 60,000 crores. Their debt however increased from 1.38 crores to 1.60 lakh crores [2]

Even though RIL has shown that they are making profit, it is highly suspect if they are making enough money to pay off long term debt. Companies have a habit of manipulating numbers to show profit. The revenue numbers however, don't lie.

The big question now is - if Reliance Industries defaults on its loans (high likelihood), will the Government bail them out, or will they aggressively go after their assets after forcing them to file for bankruptcy?

Keep in mind, RIL's assets include the highly controversial KG-gas basin.

The debt bomb is affecting many other Indian companies who greedily went after cheap loans and are now feeling the heat [3]

The international monetary fund has already warned that high corporate debt can destabilize our otherwise healthy economy [4]

References -

[1]http://www.dnaindia.com/money/report-reliance-s-debt-went-up-by-nearly-rs-10000-crore-even-as-it-posted-7-year-high-profit-2107935
[2]https://www.valueresearchonline.com/stocks/Finnance_Annual.asp?code=3252
[3] http://www.businesstoday.in/magazine/cover-story/massive-corporate-debt-may-slow-down-economic-recovery/story/217700.html
[4]http://www.livemint.com/Companies/z4M2jlVmUwrLMTegUZE2wM/Concentration-of-high-debt-among-some-Indian-firms-may-pose.html

Service tax levy on services provided by a Goods Transport Agency

Circular No.186/5/2015­ST

 F. No. 354 / 98 /2015­ - TRU

 Government of India

 Ministry of Finance

 Department of Revenue

 Central Board of Excise & Customs

 *****

 New Delhi, dated 5th October, 2015

To,
Principal Chief Commissioner / Chief Commissioner of Central Excise, Service Tax and Customs (All),
Director General of Service Tax
Director General of Audit
Director General of Central Excise Intelligence Principal Principal Commissioners of Service Tax (All)
Commissioners of Service Tax (All)
Commissioner (DPPR)
webmaster@cbec.gov.in

Sir/ Madam,

Subject: ­ Service tax levy on services provided by a Goods Transport Agency ­reg.

The All India Transport Welfare Association (AITWA) has represented regarding the difficulties being faced by the Goods Transport Agencies (GTAs) in respect of service tax levy on the services of goods transport. Doubts has been raised by the All India Motor Transport Congress (AIMTC) regarding treatment given to various services provided by GTAs in the course of transportation of goods by road.

2. The issue has been examined. Since July 1, 2012, service tax has shifted to a negative list regime, by which all the services except those covered in negative list as mentioned in section 66D of the Finance Act, 1994 or those exempted by notification are chargeable to service tax.

3. Goods Transport Agency (GTA) has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called. The service provided is a composite service which may include various ancillary services such as loading/ unloading, packing/unpacking, transshipment, temporary storage etc., which are provided in the course of transportation of goods by road. These ancillary services may be provided by GTA himself or may be sub-contracted by the GTA. In either case, for the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of ancillary services provided in the course of transportation of goods by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road.

4. A single composite service need not be broken into its components and considered as constituting separate services, if it is provided as such in the ordinary course of business. Thus, a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service. While taking a view, both the form and substance of the transaction are to be taken into account. The guiding principle is to identify the essential features of the transaction. The interpretation of specified descriptions of services in such cases shall be based on the principle of interpretation enumerated in section 66 F of the Finance Act, 1994. Thus, if ancillary services are provided in the course of transportation of goods by road and the charges for such services are included in the invoice issued by theGTA, and not by any other person, such services would form part of GTA service and, therefore, the abatement of 70%, presently applicable to GTA service, would be available on it.

5. It is also clarified that transportation of goods by road by a GTA, in cases where GTA undertakes to reach/deliver the goods at destination within a stipulated time, should be considered as services of goods transport agency in relation to transportation of goods for the purpose of notification No. 26/2012-ST dated 20.06.2012, serial number 7, so long as (a) the entire transportation of goods is by road; and (b) the GTA issues a consignment note, by whatever name called.

6. Pending disputes on the above issues may accordingly be decided expeditiously.

7. Trade & field formations may be informed suitably.

Yours faithfully,
(Dr. Ravindra Kumar)
Technical Officer, TRU-II

PAN Allotment will be suspended in October

‪PAN‬ allotment will remain ‪‎suspended between 05.10.2015 to 09.10.2015.

The Income Tax Department is in the process of upgrading software applications. It is for information of PAN applicants that PAN allotment by Income Tax Department will remain suspended between 05.10.2015 to 09.10.2015 due to PAN data migration activity. However, PAN applications, through on­line and off­line modes, will continue to be received by PAN service centres of M/s NSDL and M/s UTIITSL. The back log of PAN applications will be cleared within three days. Inconvenience to taxpayers is regretted. Read more at: www.incometaxindiaefiling.gov.in