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Services to have 4-slab GST rates, no decision on gold



Arun Jaitley

Srinagar, May 19:  In a move which is expected to bring prices down from the current levels, the Goods and Services Tax (GST) Council on Friday decided on a four-slab tax rate for services along with the novel concept of input credit for goods used.

The Council concluded its two-day meeting here with the decision to apply the same four tax rate slabs for services as for goods, exempting, however, healthcare and educational services from the purview of the GST.

However, no consensus could be reached on the rate to apply on gold as well as on beedi, and the Council will meet again on June 3 in New Delhi for a decision in this regard.

Briefing reporters here following the meeting, Union Finance Minister Arun Jaitley said that under GST, services will get the benefit of input tax credit for the goods used, effectively making the real incidence of taxation lower than the headline taxation rate.

He said that while “luxury services” would attract the highest rate of 28 per cent, health and education services would be exempt categories.

Jaitley said there would be a 5 per cent tax on carriage of goods by rail, road and air transport services because their main input is petroleum.

Work contracts currently attract central tax at 6 per cent, while state taxes vary between 1-5 per cent, but no input credit is available for these services, the minister noted.

“Most of the inputs for work contracts… cement, steel are taxed at 28 per cent,” he said.

“The uniform GST will be at 12 per cent while the entire credit inputs will now be available and, thus, the level of taxes will come down below the present level,” he added.

“Those paying service tax will not be able to take benefit of input credit as petroleum not in GST,” he said.

IT, telecom and financial services will be taxed at the rate of 18 per cent.

While five-star hotel services will be taxed at the highest 28 per cent, restaurants with a turnover of Rs 50 lakh and less would be levied at 5 per cent.

“Non-air conditioned restaurants will have 12 per cent, while air-conditioned restaurants will have a service tax of 18 per cent,” Jaitley said.

“Those restaurants located inside 5-star hotels will have same service tax as applicable to the 5-star hotels,” he added.

He also said that entertainment tax will be merged with the service tax at 28 per cent.

Hotels, gambling, race club betting and cinema will all be levied GST at 28 per cent.

“The net effect of GST will not be inflationary. There is a set of exemptions for services… we are grandfathering most of the existing exemptions because we don’t want any adverse impact of taxation in those areas,” Jaitley said.

“Once input credit starts, it will have a positive impact,” he added.

Speaking to reporters after the meeting, Kerala Finance Minister Thomas Isaac said that “not in a single case has there been an increase in taxes from before”.

The Council on Thursday approved the tax rates for 1,211 items, of which 7 per cent will be exempted, 14 per cent will be in the 5 per cent slab, 17 per cent in the 12 per cent category, 43 per cent in the 18 per cent segment, while 19 per cent of goods will go into the top tax bracket of 28 per cent.

Thus an overwhelming 81 per cent of goods will attract tax of 18 per cent or below. Only 19 per cent of items will be taxed at the highest rate of 28 per cent.



RInfra moves Delhi HC seeking arbitration award from DMRC



New Delhi, March 20: Reliance Infrastructure’s (RInfra) subsidiary Delhi Airport Metro Express Private (DAMEPL) has moved the Delhi High Court seeking execution of the arbitration award of Rs 5,200 crore it had won against Delhi Metro Rail Corporation (DMRC).

According to a company statement issued on Tuesday: “In its petition filed under section 36 of the Arbitration and Conciliation Act in the division bench headed by Chief Justice of Delhi HC, DAMEPL has sought an order for the execution of the award dated May 11, 2017 passed by the Arbitral Tribunal and direct DMRC to pay Rs 5,200 crore.”

The claim includes principal amount of Rs 2,945.54 crore along with interest as on date.

The development comes after Delhi High Court on March 6, 2018 upheld the arbitration award as compensation along with interest to DAMEPL by a three-member arbitration tribunal.

Rinfra was awarded the compensation by the arbitration tribunal in a unanimous decision after 68 sittings over four years on the basis of termination provisions of the ‘Concession Agreement’.

DAMEPL had terminated the agreement with DMRC to run the ‘Airport Express Line’ in January 2013.

In June 2013, the project was handed over to DMRC and in the following September a three-member arbitration tribunal was appointed from a panel proposed by DMRC to resolve the dispute.

The ‘Airport Express Line’ was commissioned in February 2011.


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Equities close volatile trade session in green




Mumbai, March 20: Amid volatility, the key Indian equity indices on Tuesday provisionally closed in the green with healthy buying in IT, Teck (technology, media and entertainment) and auto stocks.

According to market observers, some caution prevailed ahead of the US Federal Reserve’s meeting slated to begin later in the evening.

The wider Nifty50 of the National Stock Exchange (NSE) edged higher by 30.10 points or 0.30 per cent to provisionally close at 10,124.35 points (at 3.30 p.m.).

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 32,876.48 points, closed at 32,996.76 points — up 73.64 points or 0.22 per cent from the previous session’s close.

The Sensex reclaimed the 33,000-mark during the intra-day trade to touch a high of 33,102.74 points.

However, the BSE market breadth was bearish with 1,594 declines and 1,099 advances.

On Monday, the benchmark indices hit their lowest levels since December 6, 2017, as India’s widening Current Account Deficit (CAD), along with weak global cues ahead of the US Federal Reserve March 20-21 meeting, dented investors’ risk-taking appetite.

The NSE Nifty50 declined by 100.90 points or 0.99 per cent to close at 10,094.25 points, while the BSE Sensex closed at 32,923.12 points — down 252.88 points or 0.76 per cent from its previous close.


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Twitter likely to ban cryptocurrency ads, claims Report

“Twitter may also ban all ads for cryptocurrency exchanges, with some limited exceptions, when the policy is launched,” the report claimed.




San Francisco, March 19: After Facebook and Google, now microblog platform Twitter likely to ban cryptocurrency, token sales and Initial Coin Offerings (ICO) related advertisements.

News agency IANs citing a Sky News report on Monday stated the new Twitter policy will be rolled out within in two weeks.

“Twitter may also ban all ads for cryptocurrency exchanges, with some limited exceptions, when the policy is launched,” the report claimed.

Last week, Google announced that it will debar advertisements for cryptocurrencies and other “speculative financial products” across its ad platforms.

The ban on such advertisements will be effective from June.

“We updated several policies to address ads in unregulated or speculative financial products like binary options, cryptocurrency, foreign exchange markets and contracts for difference (or CFDs),” Scott Spencer, Google’s Director of Sustainable Ads, said in a blog post.

“In June 2018, Google will update the financial services policy to restrict the advertisement of contracts for difference, rolling spot forex and financial spread betting,” the search engine giant asserted.

In 2017, Google scrapped more than 3.2 billion ads that violated its advertising policies.

The search also blocked 79 million ads in its network for trying to send people to malware-laden sites and removed 400,000 of these unsafe sites last year.

In January, social media giant Facebook put a ban on all ads promoting cryptocurrencies, including Bitcoin and ICOs.

The new policy prohibits ads that promote financial products and services that are frequently associated with misleading or deceptive promotional practices, Facebook said in a statement.

“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception.

“That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith,” stated Rob Leathern, Product Management Director at Facebook.


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