Employees State Insurance - ESI Limit - Threshold limit increased to Rs.15,000 per month
Gratuity - Increased the threshold limit to Rs.10 lacs from Rs.3.5 lacs.
Saturday, June 26, 2010
Latest in Central Excise
Notification 6/2010 dt.27.2.10
Provided further that if the capital goods, on which CENVAT Credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit
Notification 21/2010 dt.18.05.10
Provided further that where a manufacturer of final products has paid total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file such declaration electronically
Notification 20/2010 dt.18.05.10
Provided that where an assessee has paid total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file the said Annual Financial Information Statement electronically
Provided further that if the capital goods, on which CENVAT Credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit
Notification 21/2010 dt.18.05.10
Provided further that where a manufacturer of final products has paid total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file such declaration electronically
Notification 20/2010 dt.18.05.10
Provided that where an assessee has paid total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file the said Annual Financial Information Statement electronically
Wednesday, November 11, 2009
GST from 1.4.2010 - A quick glance
Finally Goods and Service Tax (GST) sees some light of day. A discussion paper has been released yesterday by the Government, and there is a talk of implementing GST from 1.4.2010 (5 months from now, this is a doubtful date but I am sure from 1.4.2011).
What is GST? – it is a combined tax. It means that:
From 1.4.2010 (or 1.4.2011), there will be no Excise Duty, no VAT, no service tax, no additional duty of customs and no countervailing duty in customs (however basic customs duty will stay).
All these taxes will be unified into one tax called “GST”. (Though this seems simple there are some complications like Central GST, State GST, Interstate GST, which I will not elaborate now).
This GST will have impact on raw material prices & pricing to customers.
Rates of GST & some legislation are yet to be pronounced.
What is GST? – it is a combined tax. It means that:
From 1.4.2010 (or 1.4.2011), there will be no Excise Duty, no VAT, no service tax, no additional duty of customs and no countervailing duty in customs (however basic customs duty will stay).
All these taxes will be unified into one tax called “GST”. (Though this seems simple there are some complications like Central GST, State GST, Interstate GST, which I will not elaborate now).
This GST will have impact on raw material prices & pricing to customers.
Rates of GST & some legislation are yet to be pronounced.
Monday, October 19, 2009
Interest Rate, Currency Update
Dated : 19th October, 2009
India
Bank Rate - 6.00%
Repo Rate - 4.75% (Rates at which banks borrow from RBI)
Reverse Repo Rate - 3.25% (Rates at which RBI borrow from banks)
CRR - 5.00%
SLR - 24.00%
PLR - 11% to 12%
Savings Bank Rate - 3.5%
Deposit Rates - 6.5% to 7.75%
Call Rates - 2.0% to 3.30%
182 days Treasury Bills - 4.05%
BSE Sensex - 17195
Major Exchange Rates
INR vs USD - 46.20
INR vs Euro - 68.69
INR vs GBP - 75.55
INR vs SGD - 33.18
INR vs JPY - 0.508
World Interest Rates
JPY - 0.1%
USD - 0.25%
Euro - 1.0%
GBP - 0.5%
AUD - 3.25%
NZD - 2.5%
Outlook
US recovery is seemingly round the corner, but is it true or we are seeing the effects of stimulus package. If it is as a result of the stimulus package then it would be interesting to see what happens when the money’s are being returned to the Government.
As regards US Dollar the currency is still weak and depreciating against major currencies in the world. Indian Rupee will remain strong due to higher foreign exchange reserves and higher foreign currency inflow.
India
Bank Rate - 6.00%
Repo Rate - 4.75% (Rates at which banks borrow from RBI)
Reverse Repo Rate - 3.25% (Rates at which RBI borrow from banks)
CRR - 5.00%
SLR - 24.00%
PLR - 11% to 12%
Savings Bank Rate - 3.5%
Deposit Rates - 6.5% to 7.75%
Call Rates - 2.0% to 3.30%
182 days Treasury Bills - 4.05%
BSE Sensex - 17195
Major Exchange Rates
INR vs USD - 46.20
INR vs Euro - 68.69
INR vs GBP - 75.55
INR vs SGD - 33.18
INR vs JPY - 0.508
World Interest Rates
JPY - 0.1%
USD - 0.25%
Euro - 1.0%
GBP - 0.5%
AUD - 3.25%
NZD - 2.5%
Outlook
US recovery is seemingly round the corner, but is it true or we are seeing the effects of stimulus package. If it is as a result of the stimulus package then it would be interesting to see what happens when the money’s are being returned to the Government.
As regards US Dollar the currency is still weak and depreciating against major currencies in the world. Indian Rupee will remain strong due to higher foreign exchange reserves and higher foreign currency inflow.
Tuesday, October 13, 2009
Divident Distribution Tax - Section 115O
Dividend is taxable in India under section 115O of the Income tax Act, 1961. Effective rate of Dividend Distribution tax from 1st April 2007 is 16.995% (15% basic rate + 10% surcharge + 2% education cess and 1% higher education cess). This tax cannot be avoided on payment of dividend, even if no income tax is payable by the company on its total income.
This dividend distribution tax (DDT) should be paid within 14 days of declaration of dividend or distribution of dividend or payment of dividend whichever is earlier.
This dividend distribution tax has bigger implications for attraction of foreign investments given that ultimately the effective tax rates on profits work out to 50% considering income tax of 33% and dividend tax of 16.995%. There is a strong case to reduce / remove this DDT if India has to emerge as a major destination for attracting foreign investments.
This dividend distribution tax (DDT) should be paid within 14 days of declaration of dividend or distribution of dividend or payment of dividend whichever is earlier.
This dividend distribution tax has bigger implications for attraction of foreign investments given that ultimately the effective tax rates on profits work out to 50% considering income tax of 33% and dividend tax of 16.995%. There is a strong case to reduce / remove this DDT if India has to emerge as a major destination for attracting foreign investments.
Outlook on Rupee for the Medium Term of 6 months
During the last 5 years INR has been in a range of 44-46 except for a few patches of 38 in 2008 and above 50 during beginning of 2009. Currently in October it is back again into the familiar territory of 46.
Outlook for INR vs USD looks bullish and would remain in the territory of 44-46 upto March 2010. This view is driven by the fact that India has a strong forex reserve of USD 280.3 billion (for the week ended 2nd October, 2009) and higher dollar inflows from overseas. Further IIP for August showed robust growth of 10.4% and a healthy stock market which has crossed 17,000 points also paints a rosy picture for the currency market. The above factors will weigh down the import demand for Dollars and Dollar recovery overseas due to the talk of end in economic recession in the US. Though there is talk about increase in interest rates in the US, it may not see the light of the day soon, and hence there is a strong case for rupee appreciation or staying put at levels of 44-46 upto March 2010.
Forward Premium is at 0.13% for 1 month (quoting at 46.70) and 1.48% for 6 months (quoting at 47.33) which reflects the sentiment that rupee will be in a short range and there are strong indications of the same appreciating.
Outlook for INR vs USD looks bullish and would remain in the territory of 44-46 upto March 2010. This view is driven by the fact that India has a strong forex reserve of USD 280.3 billion (for the week ended 2nd October, 2009) and higher dollar inflows from overseas. Further IIP for August showed robust growth of 10.4% and a healthy stock market which has crossed 17,000 points also paints a rosy picture for the currency market. The above factors will weigh down the import demand for Dollars and Dollar recovery overseas due to the talk of end in economic recession in the US. Though there is talk about increase in interest rates in the US, it may not see the light of the day soon, and hence there is a strong case for rupee appreciation or staying put at levels of 44-46 upto March 2010.
Forward Premium is at 0.13% for 1 month (quoting at 46.70) and 1.48% for 6 months (quoting at 47.33) which reflects the sentiment that rupee will be in a short range and there are strong indications of the same appreciating.
Monday, October 12, 2009
Major Interest Rates in India and World
Date : 12th October, 2009 - Monday
India
Bank Rate - 6.00%
Repo Rate - 4.75% (Rates at which banks borrow from RBI)
Reverse Repo Rate - 3.25% (Rates at which RBI borrow from banks)
CRR - 5.00%
SLR - 24.00%
PLR - 11% to 12%
Savings Bank Rate - 3.5%
Deposit Rates - 6.5% to 7.75%
Call Rates - 2.15% to 3.35%
182 days Treasury Bills - 3.8%
BSE Sensex - 16642
Major Exchange Rates
INR vs USD - 46.53
INR vs Euro - 68.50
INR vs GBP - 73.73
INR vs SGD - 33.36
INR vs JPY - 0.517
World Interest Rates
JPY - 0.1%
USD - 0.25%
Euro - 1.0%
GBP - 0.5%
AUD - 3.25%
NZD - 2.5%
Outlook
With the global economy showing signs of revival (or that is what being predicted), time will not be far away to see firming up of interest rates again.
India
Bank Rate - 6.00%
Repo Rate - 4.75% (Rates at which banks borrow from RBI)
Reverse Repo Rate - 3.25% (Rates at which RBI borrow from banks)
CRR - 5.00%
SLR - 24.00%
PLR - 11% to 12%
Savings Bank Rate - 3.5%
Deposit Rates - 6.5% to 7.75%
Call Rates - 2.15% to 3.35%
182 days Treasury Bills - 3.8%
BSE Sensex - 16642
Major Exchange Rates
INR vs USD - 46.53
INR vs Euro - 68.50
INR vs GBP - 73.73
INR vs SGD - 33.36
INR vs JPY - 0.517
World Interest Rates
JPY - 0.1%
USD - 0.25%
Euro - 1.0%
GBP - 0.5%
AUD - 3.25%
NZD - 2.5%
Outlook
With the global economy showing signs of revival (or that is what being predicted), time will not be far away to see firming up of interest rates again.
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