QBiz: New Law to Check Chit Fund; Govt May Double Minimum Wage

Top business stories of the day.

File photo of Finance Minister Arun Jaitley. 

(Photo: Reuters)

1. Govt Will Soon Bring in Law to Check Chit Fund Schemes: Arun Jaitley

Finance minister Arun Jaitley said on Thursday that a new law to regulate chit fund schemes to protect investors will be brought in soon, and state-run banks will refer more stressed assets for bankruptcy resolution.

Replying to a debate on The Banking Regulation (Amendment) Bill, 2017 in the Lok Sabha, the minister said that there needs to be a political consensus as well as the will to address the problem of non-performing assets (NPAs), as state-owned banks seeking to honestly address the problem through certain steps were facing the anxiety of being questioned about their decisions by investigative agencies years later.

The bill, which replaced an ordinance promulgated in May empowering the Reserve Bank of India (RBI) to deal with bad debt was later passed by a voice vote in the house.

No one can claim the right of equality in not paying banks back. RBI has taken up some difficult cases... I am sure they will take up more.

Arun Jaitley, Minister of Finance

Source: Livemint

2. Businesses Can File July Returns on GSTN From 5 Aug

The first tax returns under the new Goods and Services Tax (GST) regime can be filed from Saturday and the facility will remain open till 20 August, GST Network CEO Navin Kumar said on Thursday.

Businesses can start filing their first GST returns and pay taxes for July on the portal of GST Network, the IT infrastructure provider for the new indirect tax regime, beginning 5 August.

To make compliance easy for businesses, the GST Council has allowed businesses to initially file their returns on self-assessment basis in the first two months of the GST roll out.

So, the GST returns for July and August will be filed on the Goods and Services Tax Network (GSTN) portal by filling up GSTR 3B form.

Source: PTI

3. Tata vs Cyrus Mistry: Sebi Finds No Violation of Norms at Tata Companies

The Securities and Exchange Board of India (Sebi) has closed its investigation into allegations raised by Cyrus Mistry about violations at various Tata companies, two people with direct knowledge of the matter said.

With this, the regulator has addressed two of the allegations raised by Mistry.

After Mistry was ousted as chairman of the group’s holding company Tata Sons Ltd on 24 October, he wrote to the board alleging corporate governance lapses and mismanagement, insider trading and violations of various Sebi rules at some of the listed Tata companies.

Subsequently, Nusli Wadia a former independent director on the boards of Tata Steel, Tata Motors and Tata Chemical Ltd, wrote to Sebi in January, alleging that four individuals on the boards of the three companies had conflicts of interest and should not have been appointed as independent directors.

Source: Livemint

4. Senior GST Council Official Held For Bribery

The Central Bureau of Investigation has arrested a senior official of the GST Council, the top decision-making body of the Goods and Services Tax, on bribery charges during his earlier stint in Central Excise.

Monish Malhotra, a superintendent, is accused of receiving kickbacks to save private parties from action by the Central Excise. The money was routed through a conduit, identified as Manas Patra. The CBI recovered Rs 7 lakh from Malhotra’s house, said officials.

This could be the first instance of a GST Council official being arrested by the central agency.

Source: PTI

5. IOC’s Net Profit Beats Estimates With 22% Profit Growth

India Oil Corporation Ltd surpassed analysts’ estimates in the April-June quarter with a 22 percent increase in profit aided by higher sales volumes and rising margins. Analysts had estimated a double-digit decline in the bottomline.

Net profit rose to Rs 4,549 crore from Rs 3,721 crore last quarter, the company said in an exchange filing on Thursday. The Bloomberg consensus estimate stood at Rs 3,112 crore. Analysts had expected a decline due to possible inventory losses arising out of the daily fuel price revision with came into effect from 16 June.

Domestic sales increased to 20.7 million metric tonnes from 19.6 million metric tonnes in the last quarter. Exports also rose to 1.8 million metric tonnes versus 1.6 metric tonnes on a sequential basis.

Gross refining margin of the government-owned oil firm fell to $4.32 per barrel versus an estimated $5 per barrel.

Source: BloombergQuint

6. Government May Double Minimum Wage, Revise Formula

India may see a doubling of minimum wage nationally to about Rs 18,000 per month as the labour ministry is set to relook at the formula currently used to determine the floor level.

The ministry is expected to take into consideration a proposal to double the units or individuals considered per family to six from three at present by including dependent parents as well as considering each child as one unit.

Currently, husband, wife and two children in a family are considered three units, based on which minimum wage is determined for agriculture and non-agriculture workers under the Minimum Wages Act, 1948. The Act is applicable to 47 central sector establishments and includes both agriculture and non-agriculture workers in the country.

Source: The Economic Times

7. ‘No Scope For Essar Steel To Repay Its Debts For 25 Years,’ Says NCLT

In admitting the insolvency cases against Essar Steel Ltd, the National Company Law Tribunal rejected the company’s argument that the insolvency process would hurt its debt restructuring efforts.

The Ahmedabad bench of the NCLT admitted the petitions filed by Standard Chartered Bank and State Bank of India Ltd, placed the company under moratorium and appointed an interim resolution professional.

In response to Essar Steel’s argument that the insolvency process will disrupt its debt restructuring effort, the NCLT noted that even though the restructuring effort commenced in 2014 it had not yet been finalised.

...the fact remains that except showing a little progress in the last financial year, there appears to be no scope for Essar to repay its debt for 25 years or in a span of 25 years. Therefore the Debt Restructuring Process, which is going on for the last two years, may not be a factor not to enter into Insolvency Resolution Process.

NCLT Order

Source: BloombergQuint

8. Trai May Tell CCI Predatory Pricing Issue Within Its Ambit

India’s telecom watchdog will likely cite legal precedent to reject the antitrust body’s claim that the sector controller had stepped on to the latter’s turf by examining aspects of dominance and predatory pricing as part of a consultation paper, foretelling further friction between the Centre’s two regulatory arms.

The Telecom Regulatory Authority of India (Trai) is likely to tell the Competition Commission of India (CCI) that predatory pricing and dominant position are well within its regulatory framework, something the watchdog had specified while beginning the consultation process on tariff assessment earlier this year, a senior official at the telecom controller told ET.

The Trai response would follow the CCI’s 21 July letter which claimed that by examining predatory pricing and dominance, the telecom watchdog had encroached upon the jurisdiction of the antitrust commission.

Source: The Economic Times

9. Amid GST Transition, Gold Smuggling in India Seen Rising: WGC

World Gold Council on Thursday said that unofficial import or smuggling of gold in India is expected to continue with 13 percent of tax incentives (10 percent as customs duty and 3 percent of GST) with an estimate of 100-120 tonnes of illicit gold expected to be coming into the market in 2017 compared to 119 tonnes reported in the previous year.

With GST levy organised sector will witness a sharp increase in its market share from the existing around 25 percent to 45 percent in near future with increase in transparency at existing players and the entry of new players getting organised with tax compliance.

Somasundaram PR, MD WGC, India

Source: Business Standard