Companies & Sectors
Insurance companies being probed for service tax evasion

Bharat Reinsurance, IFFCO Tokio General Insurance, Apollo DKV Insurance, DLF Premierico Life Insurance, Aviva Life Insurance, Sri Ram Life Insurance, Sahara India Life Insurance and Reliance Life Insurance have been found guilty of service tax evasion says Chidambaram

 
New Delhi: Several insurance companies are being probed for suspected evasion of service tax and recoveries have been made in some cases, Finance Minister P Chidambaram told Lok Sabha on Friday, reports PTI.
 
During Question Hour Chidambaram provided a list of such insurance companies and firms which are suspected to have evaded service tax or found after investigations to have engaged in financial wrongdoings.
 
"In cases where investigation has been completed, show cause notices have been issued. Some cases have been adjudicated and demands of service tax confirmed. Appeals against some orders are pending before the Customs, Excise and Service Tax Appellate Tribunal," Chidambaram said.
 
He said recoveries have been made in some cases.
 
"At this stage, it may not be possible to quantify the exact tax liability in each case," he said.
 
Seven insurance companies were found evading service tax in 2009-10, nine in 2010-11 and ten in 2011-12. In 2012-13 (up to October) eight companies have been found guilty of service tax evasion.
 
These are: Bharat Reinsurance Co, IFFCO Tokio General Insurance Services Ltd, Apollo DKV Insurance Co Ltd, DLF Premierico Life Insurance Co, Aviva Life Insurance Company India Ltd, Sri Ram Life Insurance, Sahara India Life Insurance Corp, Reliance Life Insurance Co Ltd, Chidambaram said in his written reply.
 

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ICICI Bank’s iWish Recurring Deposit : Understand the product flexibility and fine print

ICICI iWish claims to offer the freedom to choose when and how much to save. While it is an innovative and flexible product, savers need to understand the fine print related to the upper limit you can save and what happens if you try to save too fast

ICICI Bank has launched iWish, a recurring deposit (RD) offering flexibility of amount you pay monthly, deposit multiple times in a month and have ability to skip an instalment. The product is innovative considering the regular RD accounts expect fixed instalment amount to be paid on the same day of the month. RD gives same interest rate as fixed deposits (FD) for the same period. Offering flexibility of the amount you pay monthly can lead to customers taking advantage in the falling interest rate scenario. Savers need to understand the fine print on the upper limit of your monthly savings.
 

iWish is an online product for those who already have savings account and internet banking. It is not a product purchased after walking into a branch. It is targeted for younger segment, who need to create life goals and make savings towards realisation of it. These goals can be shared with friends and family on Facebook. The friends and family can choose to contribute to the goal. The saver can monitor the goal and know exactly how much they are ahead of behind in realising the goals.
 

Central Bank of India had launched a recurring deposit scheme ‘Centswashakti’ for retail depositors. This scheme allows depositors the flexibility to deposit up to 10 times the originally decided minimum amount every month. It does not offer the flexibility of skipping an installment. There are other RD products in the market which appeal to younger customers with goals based investment approach. E.g. YES Bank RD. iWish is more flexible, but you need to understand the fine print.
 

Here are important points to know about the iWish product: 
 

  • Maximum goals and amount limit – There can be only 10 active goals at a time and the goal amount can be of maximum up to Rs10 lakh.
  • Monthly instalment – The maximum initial deposit amount is Rs49,999. You can pay higher or lower than the monthly instalment, but you cannot pay after the goal amount limit is reached.
  • RD term – It can be six months to 10 years. It means you can set the goal duration to be from six months to 10 years.
  • Rate of interest – It is the same as FD interest rate of 6.50% to 8.75% p.a.
  • Achieving goal early – Depending on the monthly contribution you make or payment made by friends and family, you may achieve the goal faster than the set duration. You cannot make any further payment towards it and the rate of interest is guaranteed only if you leave the funds till maturity. In short, even if you achieve the goal early, you can get the locked RD interest rate if you keep the funds till maturity.
  • Skipping a monthly instalment – It is allowed and there is no need to make up for it. You have option to make up as there is flexibility in the amount you pay monthly as well as the number of monthly payments.
  • Closing the goal – Your goal is not auto closed even if the goal is achieved or if the goal period has ended. In both the cases, you need to place an online request for goal closure.
  • Closing the goal mid-way – You can close the goal mid-way even if it is not achieved. In such a case, you will not earn the interest rate mentioned at the time of goal creation. You will earn interest at the rate corresponding to the period the goal remained with the bank. Beside this, a penalty of premature closure of account will be levied on the applicable rate.
  • Partial withdrawal - You cannot partially withdraw the money from your goal mid-way. You can withdraw the money mid way by closing your goal. However in this case, you will earn interest at the rate corresponding to the period the goal remained with ICICI bank. Besides this, an applicable penalty will be charged for premature closure of goal.
     

To access other articles by Raj Pradhan, click here.

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COMMENTS

lindadale

4 years ago

Really very good offer.Actually recurring deposit itself is very good way of investment.I personally had a best experience with this account.I want to share one link here from where we can get all the detailed information about recurring deposit.http://www.axisbank.com/personal/deposit...

How FDI in retail affects the “Mango Man”

FDI in retail is an example of deregulation, devoid of any safety net for its after-effects. Would the government consider the Parliament Committee report or treat Parliament with disdain? 

 
Here is a simplified explanation, sans economic jargon, to help understand FDI (foreign direct investment) in retail and what it has in store for the aam aadmi—“The Mango Man”. Let us start with an analogy.When a falling stone hits the ground its energy is converted and dissipated as heat. However, if the same stone lying on the ground is heated, it does not take off. What is the relevance of the falling stone to FDI in retail? 
 
What is FDI in retail? It means “Foreign Direct Investment” of 51%, a controlling stake is permitted to any foreign company to set up retail trade in India. Simply put, a number of foreign-owned supermarkets would sprout all over the country. At a political party rally in Delhi, the leaders extolled the virtues of FDI in retail as symbolic of the party’s reforms agenda. The phrase, “economic reform” has many different meanings depending on ideological and political leanings. 
 
One view is that between 1875 and 1975 it meant more government and since then it means less government intervention or free run for market forces. A Wall Street view says that it means, “Change for the better as a result of correcting (economic) abuses”. “Better for whom?” and “whose abuses would the reforms correct?” Did the post 1975-reforms in USA correct the abuses by financial wizards that led to the 2007–08 meltdown? A third view holds that economic reform refers to policies directed to achieve improvements in economic efficiency. Which of these did the rally leaders have in mind when they toasted the FDI reform push? 
 
Those in favour of FDI in retail painted rosy pictures of benefits such as better prices for farmers, more jobs, better shopping experience and so forth. Those against it predicted the opposite. Few had hard facts to back their arguments. It is strange that neither the government nor the opposition referred to the report of the Parliament Committee which examined FDI in retail. The Committee seems to have done a comprehensive study, examining a number of witnesses, individuals, NGOs and trade bodies, travelling around the country, studying reports and experiences of other nations and asking questions of government departments. The Committee concluded that more people would lose jobs that the number that would find work. They said that FDI in retail would destroy large numbers of small and marginal farmers. They cautioned against the probable monopolistic behaviour, predatory pricing and attendant consequences. The Committee found that unorganized retail provides livelihoods for 40 million people, that is, for about 8% of the country’s workforce. Referring to the projection of FDI in retail creating 2 million jobs, the Committee said that this was exaggerated and that this ignores 200 million people who depended on retail trade for a living. The Committee was not only critical of FDI in retail, but also of any large corporate in retail business. The Committee drew a dismal picture of the effect of FDI in retail on the “Mango Man”.
With FDI in retail, shops like this will disappear. How sad.

ICRIER (Indian Council for Research on International Economic Relations) carried out two studies, one in 2008 and the other in 2011. The 2011 study predicts a great shopping experience for consumers. ICRIER surveyed 300 consumers, in high and middle income groups. Evidently, the government relied on the ICRIER recommendations, rather than on the Parliament Committee report. Does the reliance on a private organisation’s recommendations in opposition to Parliament, have anything to do with the chairperson of ICRIER bearing the same surname as the Deputy Chairperson of the Planning Commission?
 
ICRIER’s sample of 300, from high and middle income brackets, for a population of 1.2 billion with over 40% poor, for recommending foreign investment, is questionable. In reply to a RTI (Right to Information) query on whether the government had done any study on FDI in retail, the commerce ministry replied that it had not done any such study. The reply referred to the ICRIER report and not the Parliament Committee report. The Committee’s report was not discussed in Parliament. Rejecting the Parliamentary panel study and accepting a private study report, does not augur well for Parliamentary democracy. ICRIER says consumerism promotes economic growth. The earlier study (2008) surveyed 2020 unorganized small retailers out of 6 million shops. None of the studies addressed the issue “why India requires FDI in retail?” Would it lead to a net increase in foreign currency earnings, improve India’s balance of trade? Stiglitz’s views on FDI in retail are significant. He asks, “Why India needs foreign entrepreneurs in any sector, particularly the retail?” He then talks of the power of Wal-Mart to drive down prices and suggests that they will use that power to have Chinese goods displace Indian goods. Next, he draws attention to Wal-Mart’s abusive labour practices. He asks, “Why would you want to import such practices into India?” Why indeed? The foreign retail lobby reportedly spent over Rs52 crore in India. Could that be the reason why? He also talked about increasing inequality that Indian reforms are ushering in, accompanied by corruption. 
 
It is appropriate to now look at the falling stone analogy. To see the relevance of it look at two economic philosophies prevalent today. One is the “Trickle-down” variety. Subscribers to this believe in less and less of government. The market would correct itself. De-regulation is the key. Concessions to the rich would lead to investments and economic growth. This would trickle down to the poor. The second view holds that left to itself, unregulated market economies, would become so disorderly that the human costs would be enormous. FDI in retail is integral to “Trickle-down” economics. It is part of the reforms’ cry for deregulation. 
No lessons have been learned from the deregulation induced meltdown. That is why the government and proponents of FDI in retail do not bother about its effect on 6 million small shop-owners or the 50% of the farming-dependent population who would lose their livelihoods. Some of these dispossessed may find jobs in the retail supermarkets, as shop assistants or labourers. Does deregulation help them? The stone does not take off when heated because heating causes disorder. The heat energy is random, disorderly; the stone’s molecules jostle each other randomly. Hence, they cannot lead to orderly motion of the stone. The natural propensity of things is to move towards chaos. Markets are no exception. Without regulation the result is disorder. FDI in retail is an example of deregulation—thinking devoid of any safety net for its after-effects. Would the government consider the Parliament Committee report or treat Parliament with disdain? 
 
 
 

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COMMENTS

Ravi Patnaik

4 years ago

1.Consumers will suffer as the MNC shopping malls will will store high cost items to maximise their yield per sq.ft. of shelf space. Cheaper alternatives will find difficulty in competing and will gradually increase their prices. Ultimate loser is Consumer.
2. Farm products will be procured through mega suppliers, who will hold monopoly over farmers/ producers. Mega suppliers in India, will most likely be cronies of politicians, against whom the Mango Man will have no recourse.
3. Importing manufactured goods from low cost/ efficient economies (viz. China, Thailand)will export jobs, adding to unemployment.
4. Profit generated will be repatriated. Also over/under invoicing thru foreign suppliers will be prevalent.
5. Black money from India will be round tripped as FDI through cross-investments in MNC brands.
6. Cartelisation of prices will be easy with few large players whose transactions will be out side Indian jurisdiction.
7. As mentioned the labour practices will be as per home country of MNCs for unskilled labour. High level of mechanisation will reduce employment potential on a progressive basis.

Ravi Patnaik

4 years ago

1.Consumers will suffer as the MNC shopping malls will will store high cost items to maximise their yield per sq.ft. of shelf space. Cheaper alternatives will find difficulty in competing and will gradually increase their prices. Ultimate loser is Consumer.
2. Farm products will be procured through mega suppliers, who will hold monopoly over farmers/ producers. Mega suppliers in India, will most likely be cronies of politicians, against whom the Mango Man will have no recourse.
3. Importing manufactured goods from low cost/ efficient economies (viz. China, Thailand)will export jobs, adding to unemployment.
4. Profit generated will be repatriated. Also over/under invoicing thru foreign suppliers will be prevalent.
5. Black money from India will be round tripped as FDI through cross-investments in MNC brands.
6. Cartelisation of prices will be easy with few large players whose transactions will be out side Indian jurisdiction.
7. As mentioned the labour practices will be as per home country of MNCs for unskilled labour. High level of mechanisation will reduce employment potential on a progressive basis.

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