Mutual Funds
Strong inflows into insurance and mutual funds in April-May, normally slack months

The first two months of FY2016-17 witnessed strong inflows in to insurance and mutual funds. Net inflows in equity MF remained positive at Rs4,400 crore, similar to April but compares well with net redemption in March 2016 says a research note. Kotak Securities in the report says, "Overall net equity inflows to mutual funds have been positive for about two years but moderated to Rs2,500 crore to Rs3500 crore per month post December 2015 from about Rs6,000 crore month earlier. This raised some concerns about the sustainability of the inflows. As such, positive inflows over the past two months are comforting." Similarly, in insurance sector, after a subdued April, the annual premium equivalent (APE) growth bounced back to 26% for private players, largely led by higher ticket size of the business. "Life Insurance Corp of India (LIC) reported 22% growth on the back of higher volumes. Equity market inflows to equity mutual funds continue to remain strong; this may be driving growth in unit linked insurance plans (ULIPs) as well. Interestingly, among large players, ICICI Prudential Life is slowing down due to reduction in ticket size (likely lower ULIPs); its individual policies were up by over 40% in the past two months," the report added.

Kotak says, during April-May, private insurers gained market share in stable group businesses, while single business remained strong for LIC. The state run insurer continues to have a high share of single premium with 68% share of total premium. Private players have generally been selective in this segment; the share of single premium was 50% as against 34% in FY2016 of premium of private players. Bajaj Life, HDFC Life and SBI Life have a higher share of single premium in their overall businesses. In the group business, the share of private players increased to 26% from 20% in April 2016. HDFC Life and SBI Life gained market share.

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COMMENTS

Nilesh KAMERKAR

8 months ago

Lower returns in other asset classes is causing money to move into equities.

Fresh inflows into equities shall lead to higher valuations.. And better stock market performance shall attract even more inflows. . . . It will be difficult now to stop domestic savings from flowing into equities as the tide keeps rising.

Ramesh Poapt

8 months ago

brexit ,fed hike,gst,monsoon -adverse....mkt crash then see good outflow....

Common Service Centre gets RBI nod to function as bill payment unit
The CSCs eGovernance Service India has got in-principle approval from Reserve Bank of India for functioning as Bharat Bill Payment Operating Unit (BBPOU), Communications Minister Ravi Shankar Prasad said here on Wednesday.
 
"After the licence is made operational which may take about three months - integration with National Payment Corporation of India, the common service centres (CSC) across the country would be able to facilitate in collection of various bills of the customer near their place of residence," an official statement quoted Prasad as saying.
 
The CSCs are set up by CSC e-Governance Services India, which is a special purpose vehicle created for monitoring the implementation of the government's Common Service Centre. The BBPOU system is a bill payment system in India with a single point providing anytime, anywhere payment system to customer.
 
The Bharat Bill Payment Services offers interoperable and accessible bill payment services to customers through various payment modes and provides instant confirmation of receiving the payment.
 
The service will facilitate the collection of repetitive payment of everyday utility services such as electricity, water, prepaid payment instruments top-ups and mobile phone recharge.
 
"It will provide accessible bill payment system to large segment of banked and unbanked population. Common service centres would become ubiquitous service points for all consumers.
 
"Besides providing convenience to customers, the bill payment facility will significantly enhance footfalls in the CSC and establish their credibility as reliable bill payment access point. This would also enhance their business and income and make them sustainable," the statement added.
 
The bill payment service through CSC would also create additional infrastructure at CSC that would require deployment of manpower for running such services.
 
“With the deployment of at least one additional resource at CSC, the bill payment service would create the employment of around 160,000 people,” the statement added.
 
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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e-commerce to come under GST
The published draft bill of the destination-based, dual VAT-type Goods and Services Tax has clarified that all e-commerce transactions will attract GST which will be collected by the service operator as soon as the supplier receives payment.
 
The model GST law approved at the state finance ministers' meeting in Kolakata on Tuesday says: "Every electronic commerce operator shall, at the time of credit of any amount to the account of the supplier of goods and/or services or at the time of payment of any amount in cash or by any other mode, whichever is earlier, collect an amount representing consideration towards the supply of goods and/or services made through it."
 
Bringing e-commerce under the purview of GST, which will unify the myriad indirect taxes, is likely to end the kind of recent arbitrary moves by state governments of Uttarakhand, Assam and Bihar that imposed a 10% entry tax on goods sold online.
 
e-commerce companies have to currently deal with a complex tax framework involving VAT, central sales tax (CST), excise, and service taxes.
 
For instance, for digital downloads involving material like software, music and e-books, confusion over whether the transaction is for sale of goods attracting VAT and CST, or a provision of service liable for service tax, has led to many litigations.
 
All forms of "supply" of goods or services such as sale, transfer, barter, exchange, license, rental, lease and import of services of goods and services made for a consideration by will attract CGST (central levy) and SGST (state levy).
 
As GST will apply on "supply", the erstwhile taxable heads such as "manufacture", "sale", and "provision of services", among others will lose relevance, said Pune-based GST expert Pritam Mahure.
 
"Further, certain supplies, even if made without consideration, such as permanent transfer of business assets, assets retained after deregistration etcetera will attract GST. Even 'barter' of goods, transaction which were hitherto untaxed in VAT regime, will attract GST," Mahure said.
 
The liability to pay CGST or SGST will arise at the time of supply. Separate provisions in the model law prescribe what will apply as time of supply for goods and services.
 
"Given that there could be many parameters in determining 'time' of supply, maintaining reconciliation between revenue as per financials and as per GST could be a major challenge to meet for businesses," he added.
 
With GST to be applicable according to whether a transaction is a "intra-state" or "inter-state", the draft law provides separate provisions which will help an assessee determine the place of supply for goods and services.
 
The states will draft their own State GST based on the draft model law with minor variations, incorporating state-specific exemptions.
 
GST would be payable on the "transaction value", being the price actually paid or payable, and said to include all expenses in relation to sale such as packing and commission.
 
As the threshold limit, the draft GST law proposes the amount of Rs.10 lakh, and that of Rs.5 lakh for northeastern states including Sikkim.
 
An Authority for Advance Ruling is proposed to be located in every state, comprising one central GST member and one state GST member.
 
The law also provides for the creation of an Appellate Authority in each state.
 
The draft bill includes a composition levy, wherein a person with an annual turnover of less than Rs50 lakh on the sale of goods and services in a single state will have to pay a tax of "not less than one per cent".
 
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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