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Amit Mitra lashes out at GST roll-out, says provisions draconian

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Amit Mitra

Kolkata, June 30 : Alleging that the GST Council’s demand for a white paper on the country’s preparedness for a July 1 roll out of the new indirect tax regime has not been met, West Bengal Finance Minister Amit Mitra on Friday termed as “draconian” a clause on anti-profiteering in the new system that could land traders in big trouble.

“The GST Council said one and a half months back that it should have a white paper on the state of preparedness in the country with regard to the GST roll-out. That would have clearly marked out the areas of shortfall. But till today we have not received it,” Mitra said, launching a blistering attack on the Centre ahead of launching of the new tax system from Friday-Saturday midnight.

He said the GST Council was completely in the dark about the extent to which the country was ready for the new tax system.

“Does GST Council know the state of preparedness? No,” Mitra, chairman of the Empowered Committee on GST, said at a panel discussion on private television channel ABP Ananda.

Claiming that the introduction of GST from Friday-Saturday midnight would lead to “total chaos”, Mitra said the central government would have to take the total blame for the situation.

Referring to deliberations in the GST meetings, Mitra said in the final legislation there was a clause on “anti-profiteering” which was “draconian”.

“It related to areas where the tax rate may go down after GST comes into force. The clause says if the businessman does not pass on the reduction in taxes as a result of the GST to the consumers, he will be charged with anti-profiteering.

“In GST meetings I had asked for an independent body to monitor this aspect. But they have tasked the central government agency CBEC (Central Board of Excise and Customs) with this. Traders are very scared. They may land in a soup,” he said.

Mitra referred to the arrest clause, saying it can cause “major harassment to business leaders, particularly the small and medium, with some sections even being non-bailable”.

“You don’t know who will be arrested.”

“It seems, Inspector Raj is back. The traders have even been asked to maintain an account of their daily stock online. If they do not, the arrest clause can come into play,” he said.

Mitra also alleged that the traders have not been given time to prepare themselves for the GST system.

“The tax rates were fixed by the GST Council only on June 3. Do you think a small trader can engage an accountant and enter everything into the computer system within such a short time?

To buttress his point, Mitra referred to Japan and Germany. “When they went for tax reforms, they gave 12-18 months’ time to traders after fixing the tax slabs.”

Continuing his criticism, Mitra said the final rules were notified only on Wednesday.

“This untimely roll-out will lead to chaos. Small businesses provide for 80 per cent employment in the country. They account for 40 per cent of the GDP. Why didn’t they (the central government) push back the launch date? What is so sacred about July 1?” Mitra wondered.

Mitra said he was apprehensive and concerned.

Explaining the rationale for his party boycotting the midnight GST roll-out event at the central hall of Parliament, Mitra said “I am apprehensive, concerned. (State Chief Minister and Trinamool Congress chief) Mamata (Banerjee) has taken the correct step.

“We don’t want to be a part of their event management exercise and clap by suppressing the pain in our heart and going against our conscience.”

“This is not the GST which we had backed in principle in our party manifesto for (Lok Sabha polls in) 2009. When tomorrow people will suffer, things will be chaotic, then central government will have to take the responsibility.”

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Gross NPA may rise to Rs 9.5 lakh crore by March: Study

“Fiscal 2018 marks beginning of third phase of ARCs which promises to change the landscape as new regulations and other changes kick-in.”

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NPA

Gross non-performing assets (NPA) in Indian banks are expected to rise to Rs 9.5 lakh crore by March, from Rs 8 lakh crore in March last year, said a ASSOCHAM-Crisil joint study.

Stressed assets in March 2018 are expected to be at Rs 11.5 lakh crore, the report titled “ARCs headed for a structural shift,” said.

“High level of stressed assets in the banking system provides enormous opportunity size for asset reconstruction companies (ARCs) which are an important stakeholder in the NPA resolution process,” ASSOCHAM said in a statement quoting the study.

It, however, said that owing to capital constraints, growth of ARCs is expected to come down significantly.

“While growth is expected to fall to around 12 per cent until June 2019, however the AUM (assets under management) are expected to reach Rs 1 lakh crore, and that is fairly sizeable.”

The study added that with banks expected to make higher provisioning over and above the provisions made for stressed assets, they may sell the assets at lower discounts, thus increasing the capital requirement.

The study also said that effective implementation of the Insolvency and Bankruptcy Code would be a remedy to the challenge of prolonged litigation and it can help improve the recovery rate of stressed assets’ industry further.

Power, metal and construction sectors contribute the bulk of stressed assets. According to an analysis of 50 stressed assets (forming nearly 40 per cent of stressed assets in the system), sectors like metal, construction and power form nearly 30 per cent, 25 per cent and 15 per cent respectively, while other sectors together form the remaining 30 per cent.

The report stated that 2018 would see a structural shift in the stressed assets’ space as increased stringency in banks’ provisioning norms for investments in security receipts (SRs) is likely to result in more cash purchases.

“Fiscal 2018 marks beginning of third phase of ARCs which promises to change the landscape as new regulations and other changes kick-in.”

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Key Indian equity indices open at fresh highs

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Mumbai, Jan 22: Key Indian equity indices opened at fresh highs during the early morning trade session on Monday, with healthy buying observed in oil and gas, energy and consumer durables stocks.

At 9.20 a.m., the wider Nifty50 of the National Stock Exchange (NSE) traded 8.05 points or 0.07 per cent higher at a new high of 10,902.75 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 35,613.97 points, traded at a fresh level of 35,613.73 points — up 102.15 points or 0.29 per cent — from its previous session’s close.

The Sensex has touched a new high of 35,664.01 points during the intra-day trade so far.

The BSE market breadth was bullish as 454 stocks advanced as compared to 238 declines.

On Friday, positive global cues, coupled with upbeat quarterly corporate earnings and healthy buying in banking stocks, propelled the key indices to close at new record highs.

The Nifty50 closed at 10,894.70 points, while the Sensex closed at 35,511.58 points.

IANS

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Amazon opens supermarket with no checkouts

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Amazon Go

Washington, Jan 22: In a move that could revolutionise the way we buy groceries, Amazon opens its first supermarket without checkouts — human or self-service — to shoppers on Monday.

Amazon Go, in Seattle in the US, has been tested by staff for the past year, BBC reported.

It uses an array of ceiling-mounted cameras to identify each customer and track what items they select, eliminating the need for billing.

Purchases are billed to customers’ credit cards when they leave the store.

Before entering, shoppers must scan the Amazon Go smartphone app. Sensors on the shelves add items to the bill as customers pick them up – and deletes any they put back.

The store opened to employees of the online retail giant in December 2016 and had been expected to allow the public in more quickly.

But there were some teething problems with correctly identifying shoppers of similar body types – and children moving items to the wrong places on shelves, according to an Amazon insider.

Gianna Puerini, head of Amazon Go, said the store had operated well during the test phase: “This technology didn’t exist — it was really advancing the state of the art of computer vision and machine learning.”

Amazon has not said if it will be opening more Go stores, which are separate from the Whole Foods chain that it bought last year for $13.7 billion.

As yet the company has no plans to introduce the technology to the hundreds of Whole Foods stores.

However, retailers know that the faster customers can make their purchases, the more likely they are to return.

Making the dreaded supermarket queue a thing of the past will give any retailer a huge advantage over its competitors.

The Seattle store is not Amazon’s first foray into bricks and mortar retailing, however. In 2015 the firm opened its first physical bookshop, also in Seattle where the company is based. There are now about 12 in the US — including one in New York that opened last year — as well as dozens of temporary pop-up outlets.

In its third quarter results in October, Amazon for the first time put a figure on the revenues generated by its physical stores — $1.28 billion. Yet almost all of that was generated by Whole Foods.

While its stores may not yet be moneyspinners, analysts have said Amazon is using them to raise brand awareness and promote its Prime membership scheme. Prime members pay online prices at its bookstores, for example, while non-members are charged the cover price.

Brian Olsavsky, Amazon chief financial officer, recently hinted that rivals should expect more Amazon shops in the months and years ahead.

“You will see more expansion from us – it’s still early, so those plans will develop over time,” he said in October.

IANS

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