Tag: gst

Things should return to normal with economy back on track: Bajaj Allianz General chief Singhel

Banking & Finance

[ad_1]

Read More/Less


Bajaj Allianz General Insurance Company Limited (BAGIC), the country’s largest private general insurer by revenue and profits, sees the company’s overall business operations returning soon to pre-pandemic level with the economy getting back on track, a top official said.

As in previous years, this 20-year old private general insurer is hopeful of outdoing overall industry growth (estimated at 12-15 per cent) even during this fiscal with the recent uptrend in business led by health insurance followed by growth in motor and property insurance, Tapan Singhel, Managing Director & Chief Executive Officer, told BusinessLine in an interview.

“I can comfortably say, with no further waves withstanding, things should return to normal with the economy getting back on track. The growth of the economy and insurance industry is directly proportional to each other. Hence the better the Indian economy does, the better the insurance industry does “, he said when asked if business operations had returned to pre-pandemic level..

As of end August this fiscal, BAGIC recorded gross direct premium of ₹ 6468 crore, up 18 per cent over ₹ 5471 crore in same period last fiscal. The overall industry stands at about 14 per cent growth for all general insurance companies.

Singhel also hoped to see government playing an even bigger role in improving the healthcare system in the coming days and noted that a “holistic” approach that covers aspects like need to reduce GST on health insurance ( from current 18 per cent to say 5 per cent) and putting in place a regulator for hospitals was the need of the hour to solve the current problem of absence of an efficient healthcare system in the country.

Asked how had Covid-19 impacted BAGIC’s business, Singhel said that the impact of Covid on general insurance industry was predominantly on health space. BAGIC too felt the heat with loss ratios going up just as it happened for the industry. “Loss ratio for health has not been very good for us and that is for the entire industry. While Covid created awareness and sales of health policies went up, claims also got created. The good part is that the industry supported Covid 19 claims. You must also understand health reinsurance was not available internationally for Covid. Industry settled nearly ₹ 30,000 crore claims on its own internal resources.

Every industry affected by Covid has asked for government relief. Did you hear insurance industry asking for any such relief from the government inspite of paying so much claims?”, Singhel asked.

Singhel asserted that it would not be right to describe 2021-22 as a “bad year” for BAGIC, noting that settling claims was part of the business.

Medical inflation

Asked about customers anxiety over increase in health insurance premiums in the current pandemic times, Singhel asserted that Covid is not the reason why health insurance premiums will go up. “People are not understanding this. There is no regulator for hospitals. Premium increase on health policies is very natural phenomena because of the dichotomy in the system. The problem is you can’t increase health premium for three years. It’s a kind of lock-in. Every premium increase has to go to regulator and IRDAI allows this only once in three years. With average medical inflation of about 12-15 per cent per annum, price rise in premium translates to cover 45 per cent medical inflation over three years. Insurance premiums is locked for three years, while medical bills are moving up every year. Premium increase will have to happen to match the previous inflation”, he said.

Singhel said that General insurance industry had already approached the insurance regulator seeking yearly adjustments to insurance premiums rather than once in three years.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Sundaram Finance presents favourable near-term outlook amid caution

Banking & Finance

[ad_1]

Read More/Less


The adverse economic impact of the Covid second wave is expected to be limited to the first quarter of this fiscal, said S Viji, Chairman, Sundaram Finance.

“The tapering of the second wave coupled with aggressive vaccination drive has brightened the near-term prospects for the economy, with the adverse economic impact expected to be limited to the first quarter of FY22,” Viji said while addressing the 68th annual general meeting of the company virtually on Monday.

“The agricultural sector has turned buoyant with a near-normal monsoon, robust procurement by the government and improved Kharif sowing,” he added.

The re-establishment of GST collections to ₹1 lakh+ crore levels, increase in fertiliser sales, improved e-way bill activity, increase in power and fuel consumption, and growth in eight core industries all point to a sequential improvement in economic activity from the disruptions induced by the Covid second wave.

Also read: Sundaram Finance posts 16 per cent rise in Q1 net profit at ₹192 crore

However, the country’s ability to mobilise vaccines at scale, maintain the pace of vaccinations, and containment of the virus spread, especially as new variants emerge, will all be determinants of consumer confidence sustaining and consequently of economic recovery,” he said.

Festival season for auto

“While the automotive sector has been facing production constraints due to the global shortage of semiconductors, the recent pandemic-driven lockdowns in East Asia are compounding the challenge. This, coupled with higher input prices on fuel and commodities, presents the risk of a dampener to the upcoming festival season”, said Viji.

Focus areas

Given the level of uncertainty and volatility, Sundaram Finance to focus on striking a judicious balance between growth, quality and profitability (GQP), the time-tested trinity that has served the company well.

“Key priorities will be to support loyal customers tide over the aftermath of the Covid crisis by deploying all measures made available by the regulator and the government, drive collections and recovery efforts with a view to maintaining the traditional asset quality levels and preserving capital, and prudently pursuing growth opportunities that emerge as economic activity resumes post second wave across the well-understood and diversified asset class base that Sundaram Finance has established.” he stated.

Emerging growth areas

As the economic activity revives, the company expects the commercial vehicle segment to bounce back strongly. “In the CV space, in addition to growth in the M & HCV space, we believe that the SCV and ICV segments will continue to offer growth opportunities. In the passenger vehicle segment, we see a long run way as the consumer market matures and grows in India,” said Rajiv Lochan, Managing Director, Sundaram Finance.

The company also sees favourable growth opportunities in construction equipment and tractor segments due to heightened activities across infrastructure and the rural and agricultural sectors on the back of government push.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , , , , , ,

IndusInd Bank gets empanelled as Agency Bank to RBI, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


IndusInd Bank on Tuesday said it has been empanelled by the Reserve Bank of India (RBI) to act as an ‘Agency Bank‘ to facilitate transactions related to government businesses. It will strengthen the bank’s presence within the government domain, IndusInd Bank said.

The announcement comes close on the heels of a recent RBI guideline that authorises scheduled private sector banks as agency banks of the regulator for the conduct of government business.

With this, IndusInd Bank joins ranks with few other private banks of the country to carry out general banking business on behalf of the central and state government, while also offering customers – the convenience of undertaking routine financial transactions through its banking platform, the bank said in a release.

“We are honoured to be appointed by the RBI to facilitate transactions pertaining to all kinds of government-led businesses.

“Given IndusInd Bank’s exclusive suite of services comprising innovative and cost-effective solutions, coupled with our state-of-the-art technology platforms, we are confident of being a ‘partner of choice’ for the government, its enterprises, as well as all other stakeholders in fulfilling their financial aspirations in the most seamless manner,” said Soumitra Sen, Head – Consumer Bank, IndusInd Bank.

As an empanelled ‘Agency Bank’, IndusInd Bank can now be authorised to handle transactions pertaining to revenue receipts under CBDT, CCBIC and GST on behalf of the state/central government.

It can also make transactions for pension payments on behalf of state/central government, work related to Small Savings Schemes (SSS), collection of stamp duty charges, and collection of stamp duty from citizens for the franking of documents.

Besides, it can also undertake the collection of state taxes such as professional tax, VAT, state excise etc. on behalf of various state governments, IndusInd Bank said.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

GST collections for July record Rs 1.16 lakh crore, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


Gross goods and service tax (GST) revenue collected in July stood at Rs 1,16,393 crore showing a revived uptrend in business activity and economy during June as states eased restrictions.

The collections crossed the Rs 1 lakh-crore mark again after dipping from the level in June due to lockdowns or restrictions imposed by states amid the Covid second wave.

“With the easing out of Covid restrictions, GST collection for July 2021 has again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace,” the finance ministry said in a statement Sunday.

“The robust GST revenues are likely to continue in the coming months too,” it added.

The revenues for the month of July are 33% higher than the GST revenues in the same month last year.

During the month, revenues from import of goods were 36% higher and the revenues from domestic transaction, including import of services, are 32% higher than the revenues from these sources during the same month last year, the ministry added.

Experts said the sharp increase in the collections for June 21 indicates the resumption of economic activities in June and will raise expectations of better collections in the coming months.

”The improvement in GST collections both on domestic transactions and imports, accompanied by the fact that major producing states have shown significant increases, would indicate that the economic activities have resumed across the country,” said MS Mani, senior director at Deloitte India.

”If the country is able to resist the third wave, the GST collections should increase from here on,” said Rajat Bose, partner at Shardul Amarchand Mangaldas & Co.

Of the GST revenue collected in July, central GST is Rs 22,197 crore, state GST is Rs 28,541 crore, integrated GST is Rs 57,864 crore, including Rs 27,900 crore collected on import of goods, and cess is Rs 7,790 crore, including Rs 815 crore collected on import of goods.

The above figure includes GST collection received from GSTR-3B returns filed between July 1and 31 as well as integrated GST and cess collected from imports for the same period.

The GST collection for the returns filed between July 1-5, of Rs 4,937 crore had also been included in the GST collection in the press note for the month of June 2021 since taxpayers were given various relief measures in the form of waiver or reduction in interest on delayed return filing for 15 days for the return filing month June for the taxpayers with the aggregate turnover upto Rs 5 crore in the wake of Covid pandemic second wave.

The government has settled Rs 28,087 crore to central GST and Rs 24,100 crore to state GST from integrated GST as regular settlement. The total revenue of Centre and the States after regular settlement in the month of July 2021 is Rs 50,284 crore for central GST and Rs 52,641 crore for the state GST.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , ,

Bommai, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


Bengaluru: Union Finance Minister Nirmala Sitharaman has agreed to release funds under Karnataka‘s share of central award schemes besides the pending GST compensation, Karnataka Home Minister Basavaraj Bommai said on Friday. According to him, Sitharaman assured him that a balance amount of Rs 11,800 crore GST compensation would be released. Further, the Centre will provide Rs 18,000 crore GST compensation by borrowing from the financial institutions.

The state Home Minister said he also requested Sitharaman to release the first instalment of the state’s share in the GST collected in the first quarter of the current fiscal.

The Union Minister is on a two-day visit to Bengaluru where she took part in various events.

On Friday, Bommai called on her and put forth the request, following which she gave him assurance about releasing the grants under the Central Award schemes.

Later, in a statement, Bommai said he had discussions with Sitharaman on the economic situation in the state and various schemes of the central government.

“A request was made to provide financial assistance to the State Government under various schemes by the Centre…Responding positively Nirmala Sitharaman assured to release Karnataka’s share of funds under Central schemes at the earliest.” Bommai said in a statement.

During the meeting Bommai discussed with Sitharaman the financial arrangements required for the coronavirus management and possible COVID third wave.

“In response, she assured us to ensure that there is no financial hindrance in COVID-management.” the minister said.

According to Bommai, Sitharaman hailed the Karnataka government’s COVID-19 management.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Bank accounts can’t be attached at the cost of Right to Business: Madras HC

Banking & Finance

[ad_1]

Read More/Less


The Madras High Court has held that bank accounts cannot be attached in matters related to GST violation if it is at the cost of doing business. “It is made clear that the attachment proceedings cannot be at the cost of right of provision under Article 19(1)(g) of the Constitution of India,” a single bench of Justice C Saravanan said, while disposing the matter of Chennai-based Marg Human Resources Private Limited.

As a part of the Right to Freedom, Article 19(1)(g) says, “All citizens shall have the right to practice any profession, or to carry on any occupation, trade or business.”

Fraudulent ITC

The petitioner approached the Court after Director General of GST Intelligence (DGGI) issued an order attaching three bank accounts pursuant to a search and investigation ordered against the said company. The allegation against the company was that it had fraudulently availed of input tax credit on fictitious invoices to discharge the GST liability.

The petitioner submitted that the attachment orders have completely strangled the business of the petitioner. It is submitted that the petitioner was employing about 15,000 employees with security guards who were deployed in various industrial units in and around Chennai and Karnataka. It was also said that apart from the ₹5.68 crore which have been appropriated so far against the projected demand of ₹21 crore, the petitioner has agreed to pay another sum of ₹1 crore, within a week.

Also read: E-Invoicing: Simplifying compliance for the taxpayer

Defending the action by the Tax Department, its counsel submitted that the petitioner has indulged in large scale fraud and therefore, the department was compelled to initiate proceedings under Section 67 (deals with inspection, search and seizure in case of violation) of the CGST Act, 2017. He emphasised that the law entitles the Department to order provisional attachment of any assets to protect the interest of the revenue. He also informed that the attachment orders merely freeze the power to debit the account and there is no restriction for receiving the amount.

‘No prejudice to petitioner’

The counsel said that for the last few months, the customers/clients of the petitioner company have directly paid the salaries/wages to the employees including the amount due under the Provident Funds Act and therefore the “continuance of the impugned attachment orders will be of no prejudice to the petitioner.” Tax Department also said that the Directors of the company breached the bail order. After going through all the arguments, the bench noted that nearly 27 per cent of proposed/estimated tax due has already been discharged.

Also read:Monetary policy must remain accommodative

“After all, there is a mechanism provided under the Act for proper adjudication of the tax due and determination under Sections 73 and 74. Therefore, there is no meaning in attaching the bank accounts further,” the Bench said, while asking the I-T Department to complete the investigation and issue appropriate show cause notice.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

PSBs form ‘Alliance’ to provide door step banking, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Public sector banks (PSBs) have come together to form a new company in an attempt to take banking services to the doorsteps of their customers as they battle the challenges posed by the Covid 19 pandemic.

The new company called PSB Alliance Pvt Ltd will engage banking correspondents on behalf of the 12 public sector banks under a common standard operating precedure (SoP) to provide financial and non financial services directly to customer homes.

Former State Bank of India (SBI) chief general manager and deputy CEO of Reliance Jio Payments Bank, Rajinder Mirakhur has been appointed as CEO of the new company.

“Currrently, different PSBs engage different banking correspondents (BCs) for their doorstep banking services. With this company we are hoping to provide resources which can be used by all PSBs at a low cost,” Mirakhur told ET.

Currently eleven non financial services like pick up of cheques, request for an account statement, request for income tax documents like TDS certificates, delivery of payorders etc can done through this facility. Customers can also request a digital life certificate. Cash withdrawal is the only financial service currently provided. PSB customers can request the services through the web, mobile app or phone after an OTP based verification process.

Customers will have to pay a fee of about Rs 88 per service including GST. A part of this fee will go to the vendor providing the service and rest to the bank.

“We are still finalising the model to scale up. We can either hire different BCs and use their technology and manpower or create our own application to be used pan India by all BCs servicing PSBs which will create standardisation and ensure all can plug into the system, which is more feasible,” Mirakhur said.

Two service providers, Atyati Technologies and Integra Microsystem have already been hired by PSB Alliance as service providers.

PSB Alliance has a capital base of Rs 14 crore and has emerged out of another PSB promoted company Cordex India which was formed in 2010 to study operational risk in banks. The articles of association of Cordex were changed to include door step banking services on 29 April when it received approval from the registrar of companies as PSB Alliance.

Besides public sector banks, two private sector lenders IDBI Bank and ICICI Bank were also shareholders in Cordex but will surrender their stake in favour of PSBs.

“This entity is now one promoted by PSBs but all individually hold less than 10%. Each PSB has deputy one person as employee of this company right now and we will see how much personnel we need going forward,” Mirakhur said.

Bankers said the model provides banks with various benefits besides cost savings.

“It gives us economies of scale, collective bargaining and polling of resources. But most of all it gives us a collective knowledge pool which will help us to benefit from each others experiences,” said Rajkiran Rai, MD at Union Bank of India.

Bankers are hoping that by providing some services at homes they can wean away customers from branches which will help reduce the risk of spreading infections and free staff from routine work to focus on revenue earning opportunities.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Credit costs to remain elevated for NBFCs: CARE Ratings

Banking & Finance

[ad_1]

Read More/Less


Credit rating agency CARE Ratings expects credit costs to remain elevated for non-banking finance companies (NBFCs) in FY22 amid the second wave of Covid-19 pandemic.

For FY22, CARE Ratings expects a level of stress, especially in the loan portfolio under restructuring and those which were under moratorium, the impact is likely to be visible in the next one year.

“As such, delinquencies are estimated to rise moderately,” according to a report by the credit rating agency.

The agency observed that NBFCs have been grappling with a succession of uncertain events since 2016 — demonetisation, Goods and Service Tax (GST) implementation, liquidity crisis in 2018 and Covid-19 pandemic in 2020.

These uncertain events derailed growth, disrupted collections and increased loan loss provisioning across asset classes.

Financial metrics

“From Q4 (January-March) FY20, credit costs across major NBFC sub-segments reported substantial increase and has remained at elevated levels. This affected the financial metrics for H1 (April-September) FY21 negatively,” the report said.

Also read: FIDC seeks relief measures in wake of second Covid wave

The agency assessed that after September 2020, the economy re-opened with signs of revival which led to improvement in the sector, collections inched closer to pre-Covid levels and growth gathered momentum. But the second wave of Covid-19 has pulled back the recovery gains with subsequent impact on asset quality.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

SBI hikes home loan rate to 6.95 pc, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


New Delhi, Apr 5 () Country’s largest lender State Bank of India (SBI) has revised its home loan rate to 6.95 per cent effective April 1. With the revision, the lowest rate of 6.70 per cent regime for limited period ended in March 31.

During the limited period, the bank offered home loan starting from 6.70 per cent for loans up to Rs 75 lakh and 6.75 per cent for loans in the range of Rs 75 lakh-Rs 5 crore.

As per information posted on its website, the new rate effective April 1 is 6.95 per cent.

Compared to teaser rate for the limited period, the new rate is 25 basis points higher at 6.95 per cent.

The hike in minimum home loan rate by SBI is likely to prompt other lenders to follow suit.

The bank will also levy a consolidated processing fee on home loans. This will be 0.40 per cent of the loan amount and goods and services tax (GST) subject to a minimum of Rs 10,000 and maximum of Rs 30,000 plus GST.

Last month, SBI had in waived off home loan processing fees till March 31 to cash in on festive fervour. DP ANS ANS



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Banks to conduct special clearing operations for closure of government accounts on March 31, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Banks will conduct special clearing operations for annual closure of government accounts on March 31, which is the last day of the current fiscal year, the RBI has said. The Reserve Bank has issued directions to the banks for smooth clearing operation and asked them to mandatorily participate in it.

With regard to annual closing of accounts related transactions of the central and state governments, special measures are put in place for 2020-21, the RBI has instructed all the member banks to maintain sufficient balance in their clearing settlement account.

Normal clearing timings as applicable to any working Wednesday shall be followed on March 31, 2021, the RBI said in a notification addressed to the member banks, urban and state cooperative banks, payments banks, small finance banks as well as the NPCI.

To facilitate accounting of all the government transactions for the current financial year 2020-21 by March 31, 2021, it has been decided to conduct special clearing exclusively for government cheques across the three CTS grids on March 31, 2021, the RBI said.

Under this, presentation clearing will take place between 1700 to 1730 hrs and return clearing will take place between 1900 and 1930 hrs at the three CTS (cheque truncation system) grids located in New Delhi, Chennai and Mumbai.

“It is mandatory for all banks to participate in the special clearing operations on March 31, 2021. All the member banks under the respective CTS grids are required to keep their inward clearing processing infrastructure open during the special clearing hours and maintain sufficient balance in their clearing settlement account to meet settlement obligations arising out of the special clearing,” said the regulator.

Besides, it has asked the banks under the respective CTS grids to adhere to the instructions issued to them by the President of the respective CTS grid.

Under the CTS system, there is no need to present a cheque physically for clearance, instead an electronic image is being transmitted to the paying branch through the clearing house, with the relevant data.

This eliminates the cost of movement of the physical cheques and reduces time for collection and clearance of cheques.

All government transactions done by agency banks for 2020-21 must be accounted for within the same financial year, the RBI said.

The central bank said all agency banks should keep their designated branches open for over the counter transactions related to government transactions up to the normal working hours on March 31, 2021.

“Transactions through National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) System will continue up to 2400 hours as hitherto on March 31, 2021.

“Special clearing will be conducted for collection of government cheques on March 31, 2021 for which the Department of Payment and Settlement Systems (DPSS), RBI will issue necessary instructions,” it said.

With regard to reporting of central and state government transactions to RBI, including uploading of GST/e-receipts luggage files, the reporting window of March 31, 2021 will be extended and kept open till 1200 hours on April 1, 2021, the RBI said.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,
1 2 3