Nation
Rajya Sabha elections raise hope of GST Bill passage: Report
Recent elections of the Rajya Sabha increase probability of Goods and Services Tax (GST) Bill being cleared by the upper house of the Parliament. If the Bill gets cleared in the Rajya Sabha, the roll out of GST could be by 1 April 2017, says Kotak Institutional Equities Research in a note. West Bengal Chief Minister Mamata Banerjee on Tuesday assuring support instructed state Finance Minister Amit Mishra and Chairman of the Empowered Committee of Finance Ministers on GST, to ensure passage of the Bill in the ensuing monsoon session of Parliament.
 
"A constitutional amendment bill requires the support of two-thirds of the members present and voting, which means the GST bill would need the support of 161 out of 241 members. If the opposition is able to garner 81 members, it can stall the legislation. The known opponents of the bill, Congress -58, Communist Party of India (Marxist) (CPI-M) -8, Dravida Munnetra Kazhagam (DMK) -4 and Communist Party of India (CPI) with single member are expected to have, between them, 71 members of Parliament (MPs). All India Anna Dravida Munnetra Kazhagam (AIADMK)’s 13 MPs will play a critical role. We do not count MPs that were nominated by the previous United Progressive Alliance (UPA) government in this list. Parties such as Janata Dal -United (JD-U) with 10 MPs and Rashtriya Janata Dal (RJD) with four are in alliance with the Congress in Bihar, although the government there is not dependent on continued support of INC. If all the regional parties were to side with the government, the (GST) Bill can pass in the Rajya Sabha. Even abstentions will work in favour of the opposition," says the research report.
 
 
In December 2015, a government panel headed by the chief economic adviser had recommended three broad rates for GST—17-18% as the standard rate for most goods and services, 12% for essential items and 40% for luxury items, and tobacco. Precious metals will be taxed at 2-6%. More importantly, the ‘reclassification’ of the current huge number of indirect taxes into one tax and rates into three rates broadly for most goods and services will result in simplification of India’s complex indirect tax system.
 
Kotak says, "A standard rate of 17%-18% (or lower) is possible only if various exemptions and low tax rates removed or reduced from the onset of GST and the tax base expands with time. Some of the bigger consumption items such as alcohol, electricity and petroleum products are being kept out of GST; precious metals will be taxed at 2-6% as per the panel. The panel’s computed revenue-neutral rate (RNR) of 15-15.5% highlights the large number of items that have nil or low indirect tax currently since the current indirect tax rate on most goods is over 20% (cumulative impact of central excise duty of 12.5% and state value added tax (VAT) of 12.5%; the bases for computation of excise duty and VAT are different though) and on services 15%."
 

"We note that the current tax rates (total indirect taxes) on most goods and services are quite different from the proposed standard rate of 17%-18%. This may create volatility in stocks and speculation about the actual rates until the rates are finalized. The final decision on the rates and the classification of items (by rates) will be taken later by the GST Council once the GST Constitutional Amendment Bill is cleared in the parliament and ratified by at least 50% of the states. The GST bill with specific details on rates and items will be enacted later by the parliament and all the state legislatures once there is consensus on the structure and specifics of GST. We expect GST to be implemented from 1 April 2017," the research note concluded.

 

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How to not lose your mind when you lose your passport
Ever wondered how losing your passport while abroad can turn the dream vacation into a nightmare?
 
Here are some tips from travel freaks Shivani Singh and Anandita Kakkar on how to deal with a passport that goes missing.
 
Seek help from the local police: Make your way to the nearest police station and report the incident as quickly as possible. This is the first thing your travel insurance provider will ask for - and remember to keep hold of the original copy.
 
Always keep colour copies of all important documents: Scan them, store them on your phone or email them to yourself. Showing local authorities copies of your documents can make explaining your situation a lot easier.
 
Carry the Indian embassy or high commission’s contact details: After you’ve reported your loss local authorities the next logical step is to call the Indian High Commission. Choose very wisely between the Emergency Exit option and hanging on for a few days for a new passport.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Nifty, Sensex may drift higher – Tuesday closing report
We had mentioned in Monday’s closing report that Nifty, Sensex were waiting for a trigger. The major indices of the Indian stock markets rallied and closed with gains of upto 0.87% over Monday’s close. The trends of the major indices in the course of Tuesday’s trading are given in the table below:
 
 
The accommodating monetary policy stance of the Reserve Bank of India despite a status quo on lending rates lifted the investors' mood and boosted key equity market indices on Tuesday. The RBI on Tuesday left its key policy rates and reserve ratios unchanged, concerned over the slight rise in inflation and some domestic and global upside risks that have sprung up since April. Almost all the sectors were trading in green. Good buying was observed in fast moving consumer goods (FMCG), metal, basic materials and realty sectors.
 
To deal with any market disruption from outflows of up to $20 billion by redemption of foreign currency non-resident (FCNR) deposits, the Reserve Bank of India (RBI) will provide dollar and rupee liquidity if needed, RBI Governor Raghuram Rajan said on Tuesday. "To the extent that people have borrowed to invest in FCNR deposits that leveraged portion may not be renewed. Therefore, there could be outflows of the order of $20 billion or so," Rajan said, while announcing the Reserve Bank of India's second monetary policy review of the fiscal, leaving key interest rates unchanged. "This is something we will monitor. We will supply dollars in case of extreme volatility, but no one should take this for granted. But for sure, we have plenty of dollars that we can supply if necessary," Rajan said.
 
With the Reserve Bank of India (RBI) not altering policy rates, it will be only the transmission of monetary policy that would influence India's economic development and credit profile, credit rating agency Moody's Investors Service said. In a statement Moody's said the transmission will depend on a range of factors like the effectiveness of the monetary policy framework in maintaining inflation at moderate levels could be tested this year. "The RBI highlighted today the uncertain trajectory of inflation. In particular, despite favourable weather forecasts, India is not immune to the risk of a renewed rise in food prices. A third consecutive year of unfavourable weather could have a significant impact on inflation as food producers and retailers are less willing or able to absorb the price shock, at a time when the disinflationary impact of lower global energy prices wear off," Marie Diron, Senior Vice President, Sovereign Risk Group, said. 
 
US stocks ended higher as investors digested US Federal Reserve Chair Janet Yellen's comments on the country's economy. The Dow Jones Industrial Average rose 113.27 points, or 0.64 percent, to 17,920.33 on Monday. The S&P 500 added 10.28 points, or 0.49 percent, to 2,109.41. The Nasdaq Composite Index was up 26.20 points, or 0.53 percent, to 4,968.71. Fed Chair Janet Yellen said at the World Affairs Council of Philadelphia on Monday that the overall labour market is quite positive, although the recent slowdown in jobs bears "close watching." The US total nonfarm payroll employment increased by 38,000 in May, well below the market consensus of 158,000 and notching the fewest monthly job gain in almost six years. Yellen said additional rate increases would still be appropriate but did not give a specific time period for the next hike.
 
Petroleum Minister Dharmendra Pradhan on Monday launched the first road show for the Discovered Small Fields Bid Round auctions in 2016, saying the auctions under the new Hydrocarbon Exploration and Licensing Policy (HELP) would usher a more transparent regime of resource allocations and greater ease of doing business. "The spirit behind the journey from NELP (New Exploration Licensing Policy) to HELP is to create administrative and fiscal systems which are a lot simpler and transparent," he said, launching the auction of small fields across 9 sedimentary basins in India. "Given India's nearly 78% dependence on energy imports, all quantities of hydrocarbon ...big or small... are crucial for the country. And therefore, we feel that this new bid round is a timely step in the right direction," he added. In March, the government approved a new oil and gas exploration policy based on a revenue-sharing model, as opposed to cost-and-output-based norms earlier.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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m_rajendiran123

8 months ago

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