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The <keyword id="19994390" type="General" weightage="20" keywordseo="GST-Council" source="keywords">GST Council</keyword> on Saturday decided to tweak <keyword id="20452955" type="General" weightage="20" keywordseo="tax-rates" source="keywords">tax rates</keyword> on items, including accommodation services for students and solar cookers, and took a host of taxpayer-friendly measures including waiver of interest and penalty for demand notices issued in the first three years of <keyword id="6354679" type="General" weightage="100" keywordseo="GST" source="Orion">GST</keyword> rollout. Briefing reporters after the 53rd <keyword id="3680839" type="General" weightage="20" keywordseo="GST-Council-meeting" source="Orion">GST Council meeting</keyword>, Finance Minister <keyword id="129243" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="Orion">Nirmala Sitharaman</keyword> said the Council has recommended to roll-out the biometric-based <keyword id="20433416" type="General" weightage="20" keywordseo="Aadhaar-authentication" source="keywords">Aadhaar authentication</keyword> of registration applicants on pan-India basis in a phased manner. This will help check fraudulent registration done to avail input tax credit and evade taxes. To reduce litigation, the Council decided to fix a monetary limit for tax officers to file appeals before the GST Appellate Tribunal, the High Court and the Supreme Court at Rs 20 lakh, Rs 1 crore and Rs 2 crore, respectively. It also recommended reduction of the quantum of pre-deposit required to be paid by taxpayers for filing of appeals under Goods and Services Tax (GST). The maximum amount of pre-deposit for filing appeal with the appellate authority has been reduced from Rs 25 crore CGST and SGST each to Rs 20 crores CGST and SGST each. This will help ease cash flow and working capital blockage for the taxpayers. "The 53rd GST Council meeting has taken a number of decisions on trade facilitation, easing compliance burden and giving relief to taxpayers in terms of easing compliance," Sitharaman said. The Minister said the next meeting of the GST Council will be held in August in which the Group of Ministers (GoM) on GST rate rationalisation under Bihar Deputy Chief Minister Sumant Chaudhary, will give a presentation on the status of the work and aspects covered by the panel and work pending before the panel. "What was decided in the Council is, when we meet in the next GST Council meeting we will start a discussion on rate rationalisation... There will be a presentation by the GoM irrespective of whether the report is draft... and then Council will start the discussion on rate rationalisation in the next meeting in August," Sitharaman said. The GST Council on Saturday recommended to exempt Accommodation Services of up to Rs 20,000 per person per month from GST. This is subject to the condition that these services are supplied for a minimum continuous period of 90 days. "It's primarily meant for students," Sitharaman said. In a taxpayer friendly move, the Council has decided to waive interest and penalties for demand notices issued under Section 73 of the CGST Act (for cases not involving fraud, suppression or wilful misstatement) for the fiscal years 2017-18, 2018-19 and 2019-20, if the full tax demanded is paid by March 31, 2025. GST, which subsumed 17 local taxes and cesses, was rolled out on July 1, 2017. With its introduction, prices of various products and services used by masses have moderated. As per the CBIC data, mobile phones and many household items including TV, refrigerator, washing machine and AC have become cheaper post GST. It has reduced burden on household income and improved affordability. The Council also decided to refer the standing committee's recommendation to exempt GST on fertiliser and cut rates on raw materials to the GoM on rate rationalisation. Currently, GST is levied at 5 per cent on fertilisers, while its raw materials like sulphuric acid and ammonia face 18 per cent tax. Also the Tax Collected at Source (TCS) rate for e-commerce suppliers has been cut from present 1 per cent to 0.5 per cent, which will ease the financial burden on the suppliers making supplies through E-commerce platform. Besides, services provided by Indian Railways to the general public, namely, sale of platform tickets, facility of retiring rooms/waiting rooms, cloak room services and battery-operated car services as well as intra-railway transactions would be exempt from GST. GST Council has prescribed a uniform rate of 12 per cent on all milk cans meaning steel, iron, aluminum which are irrespective of the use. The Council also recommended a uniform GST rate of 12 per cent on all carton boxes and cases of both corrugated and non-corrugated paper or paper board, which in particular, help the apple growers of Himachal Pradesh and Jammu &amp; Kashmir. All types of Sprinklers, including fire water sprinklers, will attract 12 per cent GST. Solar Cookers, whether it has a single or dual energy source, too will attract a 12 per cent tax. The Council also decided that GST anti-profiteering provisions will have a sunset date of April 1, 2025. Current cases and investigations with regard to profiteering complaints will be handled by the Principal bench of GST Appellate Tribunal (GSTAT), instead of the Competition Commission of India (CCI). Also, the time limit to avail input tax credit w.r.t. any invoice or debit note through any GSTR 3B return filed up to November 30, 2021 for FY 2017-18, 2018-19, 2019-20 and 2020-21, has been fixed at November 30, 2021. Sitharaman said less than two per cent of the total 58.62 lakh taxpayers under Central GST administration has been sent tax notices and the intention of the government is to make GST assessees life easier by reducing compliance requirements. "I want to reassure the assessees that our intent is to make GST assessees life easier, we are working towards less and less compliance. On behalf of the CGST, notices are not being sent left, right and centre. Only 1.96 per cent of all active tax assessees have been sent notices from Central GST," Sitharaman said.

GST Council tweaks tax rates; Waives interest, penalty on tax dues for first 3 years of rollout

<ul><li>If IT majors opt for this lower corporate tax of 22%, then they will have to let go of tax exemptions they have been enjoying so far. </li><li>Currently, most IT companies enjoy tax exemptions under Section 10AA of the Income Tax Act for revenues from special economic zones (SEZs). </li><li>Kotak equities believes that Infosys may possibly choose to adopt the new corporate tax rate and let go of all exemptions. </li><li>TCS’ effective tax rate will remain unchanged in the current financial year. Same holds true for Mindtree, says Kotak. </li></ul> India Inc is busy celebrating the Finance Minister’s corporate tax rate cut. For IT companies, this rate cut comes with a rider. If TCS, Wipro, Mindtree, Infosys and others opt for this lower corporate tax of 22%, they will have to let go of tax exemptions they have been enjoying so far. Currently, most IT companies enjoy tax exemptions under Section 10AA of the Income Tax Act for revenues from special economic zones (SEZs). “Companies will have to decide whether taxes paid in India are less than or more than the revised effective tax rate, if it is the latter they may forgo the current SEZ exemptions and transition to new (lower) corporate tax rate in India,” says a report by Kotak Institutional Equities. To take or not to take There are a few two to three factors that might help Indian IT companies decide. One is the tax that is payable on other income — most IT companies are flush with capital which is deployed in mutual funds, fixed deposits and other debt instruments. In addition, most technology companies have overseas earnings and the accounting structures might help them decide which way to go. “We believe that Infosys’ India tax rate will be over 26%. The company may possibly choose to adopt the new corporate tax rate and let go of all exemptions. Wipro’s India tax rate is close to 21-22%. Yet the company’s effective tax rate (ETR) will reduce by 1-2%,” says Kotak. “TCS’ effective tax rate will remain unchanged in the current financial year. Same holds true for Mindtree. Impact for other companies will vary but will not be meaningful,” the report added. Due to marginal benefit, tech majors have always been seeking a reduction in minimum alternate tax (MAT) instead. SEZs attract a MAT of 21.5%, and any reduction in this would have a greater impact on the technology majors in India.

TCS, Wipro and Infosys have a problem—to take the corporate tax cut or not

TCS, Infosys, L&T triplets tank on US troubles — wiping $10 billion off tech wealth

<ul><li>Other than IT, telecom and healthcare sectors also witnessed a notable decline in hiring in October this year as compared to last year. </li><li>The insurance sector saw a phenomenal year-on-year growth in hiring at 93% this <keyword id="36208" type="General" weightage="20" keywordseo="festive-season" source="Orion">festive season</keyword>. </li><li>The growth graph for hiring in the national capital was found to be flat as compared to last year.</li></ul>The slowdown is real in India’s information technology industry. The sector, which created the maximum jobs over the last two years, is seeing a hiring slowdown now. According to the <keyword id="15405162" type="General" weightage="20" keywordseo="Naukri-Jobspeak-index-report" source="Orion">Naukri Jobspeak index report</keyword>, hiring was down 18% this festive season in October as compared to last year. Bangalore, the IT hub of India saw the maximum drop in hiring at 16% in the <keyword id="46964" type="General" weightage="20" keywordseo="IT-sector" source="Orion">IT sector</keyword> this October, as compared to the same month last year. A similar trend was seen in Hyderabad (12%) and Pune (11%) during the same period. IT majors in India have cut down in hiring by at least <a href="https://www.businessinsider.in/business/news/amid-risks-of-a-slowdown-these-it-companies-are-best-placed-to-survive-the-storm/articleshow/95228871.cms">57% in the second quarter</a>. Wipro reported the maximum cut of 95%, followed by <keyword id="6357150" type="General" weightage="80" keywordseo="tcs" source="Orion">TCS</keyword> at 58%. This is in spite of the fact that attrition in the IT industry is high. <keyword id="6354512" type="General" weightage="80" keywordseo="infosys" source="Orion">Infosys</keyword> and HCL Tech witnessed the highest attrition rates at 27% and 23% respectively. <cmsannotation type="cmsannotation" annotationid="Telecom, healthcare hiring slowed down too" comment="subhead" text="Telecom, healthcare hiring slowed down too">Telecom, healthcare hiring slowed down too</cmsannotation> Other than IT, telecom and healthcare sectors also witnessed a notable decline in hiring sentiments by 19% and 13% respectively in October this year as compared to last year. “The temporary deceleration in hiring activity was expected given the festive season, however when you compare the data with last year’s festive window (Nov’21), the Index is a healthy 13% ahead which is reassuring,” said <keyword id="2554121" type="General" weightage="80" keywordseo="pawan-goyal" source="Orion">Pawan Goyal</keyword>, chief business officer, Naukri.com. In comparison, the insurance sector in India saw a phenomenal year-on-year growth in hiring at 93% this festive season. BFSI, oil, travel and hospitality, real estate and auto are some of the other sectors which continued to show upward hiring trends this season. “It is also interesting to note that most key industries maintained hiring expansion during this month which is likely to only get stronger as year-end approaches,” Goyal added. <cmsannotation type="cmsannotation" annotationid="Delhi stayed flat in hiring" comment="subhead" text="Delhi stayed flat in hiring">Delhi stayed flat in hiring</cmsannotation> The growth graph for hiring activity in the national capital was found to be flat this festive season as compared to last year’s. Whereas, other metros like Mumbai and Kolkata continued to grow by 8% and 15% respectively. Amongst non-metros, cities like Jaipur, Kochi, Vadodara, and Coimbatore saw an uptick in demand for white collared professionals, says the report. While demand across experienced professionals stayed neutral in October this year, senior professionals with over 13 years of experience saw an uptick in demand growing by 6% over last year. Meanwhile, demand for freshers stayed flat and demand for mid-level professionals (4-12 years) declined by 4%. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/amid-risks-of-a-slowdown-these-it-companies-are-best-placed-to-survive-the-storm/articleshow/95228871.cms">Amid risks of a slowdown, these IT companies are best placed to survive the storm</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/more-indians-are-interested-in-buying-products-have-a-dating-experience-in-the-metaverse-report/articleshow/95232293.cms">More Indians are interested in buying products, have a dating experience in the Metaverse: Report</a>

Hiring slowed down in the IT sector this festive season: Report

<ul><li>The Reserve Bank of India (RBI) Governor <keyword id="6359111" type="UNKNOWN" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword> was doling out optimism to the market at today’s Monetary Policy Committee (<keyword id="6369693" type="UNKNOWN" weightage="20" keywordseo="MPC">MPC</keyword>) briefing. </li><li>The MPC will be expanding the limit of open market operations (OMOs), providing on-tap TLTRO of ₹1 lakh crore, and introducing State Development Loan (SDL) OMOs.</li><li>While these measures may ease some tensions in the short run, the markets still seek predictability and interest rate cuts. </li><li>Das said that both the apex bank and markets can operate in the same space in competition without necessarily being combative. </li></ul>The Reserve Bank of India (RBI) Governor Shaktikanta Das delivered a <a href="https://www.businessinsider.in/policy/economy/news/rbis-mpc-keeps-the-policy-rates-unchanged-to-maintain-accommodative-stance-for-inflation/articleshow/78566955.cms">chipper note</a> on India’s recovery today. According to him, even though there’s some disconnect between the RBI and the markets, all will be well — soon. However, what the market participants want is for the RBI to acknowledge that the economy is in deep trouble and, therefore, cut interest rates further, boost money supply, and ease credit. <div type="Article" hostid="261" msid="78566955" title="RBI says it has decided to 'look through' the current 'high inflation' as it won’t last long⁠ but leaves interest rates unchanged" mstype="2" mssubtype="0"></div> The deep contraction of economic growth witnessed in the first quarter is behind us, he said, while emphasising that some silver linings are already visible. However, not all that glitters is gold. “We remain circumspect about generalising these early greenshoots, as they have benefitted from base effects and one-off shifts in some sectors,” said ratings agency ICRA. Despite Governor Das’ attempt to ease those tense nerves in the market, the argument seems far from over. “The <keyword id="64190" type="POSITION" weightage="20" keywordseo="RBI-Governor">RBI governor</keyword>'s push for optimism is bordering on the edge of hope,” said Sushil Kedia, the founder of KEDIANOMICS. “What's going to happen over the next one month or three is anybody’s guess.” <div type="image" title="India gdp by quarter" msid="78574635" hostid="261" caption="&amp;lt;p&amp;gt;India&amp;#39;s GDP numbers over the last two years and RBI&amp;#39;s expectations for the second half of the fiscal year&amp;lt;/p&amp;gt;"></div> The question to ask here is not who is right and who is wrong, but what happens if any one of them is wrong. If the markets are wrong and the economy recovers by March 2021, they will be in for a surprise. However, if the RBI is wrong and the economy is worse off than the picture painted by the Governor, the implication may be more dire for everyone in the country. Not just growth, RBI hopes the inflation wave will also ebb on its own “MPC has decided to look through the current inflation as a transient hump,” Governor Das explained, adding that inflation will ease between January and March next year. However, Kedia is less sanguine than the RBI Governor. “The interest rate cycle has been so overstretched and soft for so long, that I do see signals in long term data analysis, that at any point far sooner than one would expect, some global events will start reversal of the interest rate cycle,” he said. <div type="image" title="INflation india (1)" msid="78574672" hostid="261" caption="&amp;lt;p&amp;gt;Inflation in India since the outbreak of the coronavirus pandemic in the country&amp;lt;/p&amp;gt;"></div> “The relative economic growth differential between China and the rest of the world is almost 13-14%,” he added. The point Kedia is making is that if inflation rises in the rest of the world, even India will have to raise interest rates to tackle the prices, and the RBI is not preparing for it. While not the most obvious possibility, only time will tell if Kedia’s fear is proven right. RBI’s efforts have been lauded but in parts While the RBI has opened the liquidity taps time and again, a big concern in the market is that both central and state governments need to borrow more and more to meet the rising expenses due to the pandemic. The RBI said that it would buy long-term bonds — issued by both states and the centre — on tap worth ₹20,000 crore, up to ₹1 lakh crore in the coming days. <div type="image" title="india govt debt" msid="78574919" hostid="261" caption="&amp;lt;p&amp;gt;Indian government owes lenders more than &amp;#8377;101 trillion&amp;lt;/p&amp;gt;"></div> That would provide the money states need, but it will also mop up the funds that would have otherwise been available for private borrowers. In these challenging times, it is believed that lenders would rather give money to a government than risky private parties. And that would mean that the borrowing rates for private companies will remain higher than what it should have been. “It also remains to be seen if the commitment to facilitate state and central government borrowing, as well as the explicit signals aimed at softening yields, are adequate for bond markets to shrug off concerns regarding the fiscal health of the central and state governments,” ICRA pointed out. Back to the demand for another rate cut Essentially, private borrowers are back to seeking interest rate cuts, which the RBI seems reluctant to execute at this point. “These (measures announced today) should be beneficial for banks who are comfortable with the credits of corporates to lend as banks' borrowing rates are fixed. In case the repo rates are cut again, banks can refinance at lower rates also,” said Murthy Nagarajan, the head of fixed income at Tata Mutual Fund. <div type="image" title="Copy of TCS share price 2" msid="78575065" hostid="261" caption="&amp;lt;p&amp;gt;Nifty 50 closes above 11,900 points after RBI&amp;#39;s announcement today&amp;lt;/p&amp;gt;"></div> Instead of directly cutting rates, the RBI has offered up open market operations (OMOs), which — according to Abhishek Goenka, the founder and CEO of India Forex Advisors (IFA) — will help bring borrowing rates down in the commercial paper market. OMOs are conducted by the central bank to give or take currency from a bank or group of banks by buying or selling government bonds on the open market. It’s an instrument banks can use to increase or shrink liquidity in the market. “RBI was doing OMOs on an ad hoc basis,” explained Goenka, essentially saying that while RBI may be taking necessary steps, they haven’t been very predictable. And markets hate surprises. <div type="image" title="Copy of nifty50" msid="78575238" hostid="261" caption="&amp;lt;p&amp;gt;India&amp;#39;s 10-year bond yeilds over the last one month&amp;lt;/p&amp;gt;"></div> Until September 30, it wasn’t clear how cash-strapped state governments would find the money to meet the additional expenses in the wake of the pandemic. The markets are glad that RBI has opened up the emergency borrowing window — called ways and means advances or WMA — <a href="https://www.businessinsider.in/policy/economy/news/india-leaves-borrowing-calendar-unchanged-target-remains-at-12-lakh-crore/articleshow/78407506.cms">until the end of the fiscal year by 60%</a>. WMA essentially means that governments can borrow directly from the RBI to meet their emergency needs. That leaves more money in the market for private borrowers. While the decision came just in time, there was enough fear and chaos in the run-up to it. What the markets want are predictability and interest rate cuts. Meanwhile, the Governor has asked the market to keep the faith. “We look forward to cooperative solutions for the borrowing program for the second half of the year… These views can be competitive without being combative,” he said. SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/rbis-mpc-keeps-the-policy-rates-unchanged-to-maintain-accommodative-stance-for-inflation/articleshow/78566955.cms">RBI says it has decided to 'look through' the current 'high inflation' as it won’t last long⁠ but leaves interest rates unchanged</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-beats-accenture-to-become-the-worlds-most-valuable-it-services-company/articleshow/78566487.cms">TCS beats Accenture to become the world’s most valuable IT services company — but this not the first time it has raced ahead</a> <a href="https://www.businessinsider.in/india/news/union-minister-ram-vilas-paswan-dies-at-74/articleshow/78558640.cms">India's consumer affairs minister Ram Vilas Paswan passes way at 74</a> <a href="https://www.businessinsider.in/science/space/news/mars-will-appear-bigger-redder-and-brighter-on-october-13-and-wont-get-this-close-to-earth-again-until-2035/articleshow/78556539.cms">Mars will appear bigger, redder, and brighter on October 13 — and won’t get this close to Earth again until 2035</a>

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GST Council tweaks tax rates; Waives interest, penalty on tax dues for first 3 years of rollout

PTI

TCS, Wipro and Infosys have a problem—to take the corporate tax cut or not

Katya Naidu

TCS, Infosys, L&T triplets tank on US troubles — wiping $10 billion off tech wealth

Rounak Jain

Hiring slowed down in the IT sector this festive season: Report

Vaamanaa Sethi

RBI Governor wants markets to keep the faith but traders want something more

Prabhjote Gill

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