Aug 31, 2016

Procedure for Claiming Insurance due to Theft

8:47 AM 0
If you have encountered theft of your precious belongings and need to approach your insurance company to register claims, the process might not be as simple as you think. Getting an insurance claim payment is a slightly more complicated process than the likes of getting your health insurance or motor insurance claims.

That’s because you need to inform the local police of the loss. That is the starting point. “For any case of a theft claim, there is a need to file a FIR in the nearest police station. The insurance companies will go by the findings of the local police station and wait for a confirmation from them to establish the loss of an item was due to theft. The local Police station will issue a ‘Non Traceable Certificate’ which normally takes between 1 to 3 months. Most theft claims fail to reach this stage of getting a ‘Non traceable certificate’ and hence they are rejected,” says Nikhil Apte, Chief Product Officer, Royal Sundaram General Insurance Co.

M Ravichandran, President – Insurance of Tata AIG General Insurance, provides the basic procedures that needs to be followed in theft cases for insurance claims to be paid.

The insured must lodge the First Information Report (FIR) with the police

Take photographs of the crime scene. Do not disturb the affected area till the area is inspected by police
Procedure for Claiming Insurance due to Theft

Immediately notify insurers mentioning the policy number, your contact details and request for immediate arrangement of survey

The policyholder should provide proof of theft/loss of property due to burglary/theft
Submit indicative documents such as home agreement copy, FIR copy, inventory/list of items stolen with approximate value.

In case of business establishment –stock statement, bank statement, books of accounts, supporting invoice etc.

Operational Guidelines of Sovereign Gold Bonds 2016-17 Series II

8:37 AM 0
Government of India has, vide its Notification F.No. 4(7)-W&M/2016 dated August 29, 2016, announced that the Sovereign Gold Bonds 2016 – Series II (“the Bonds”) will be open for subscription from September 01, 2016 to September 09, 2016. The Government of India may, with prior notice, close the Scheme before the specified period. The terms and conditions of the issuance of the Bonds shall be as follows:
1. Eligibility for Investment:
The Bonds under this Scheme may be held by a person resident in India, being an individual, in his capacity as such individual, or on behalf of minor child, or jointly with any other individual. The bond may also be held by a Trust, Charitable Institution and University. “Person resident in India” is defined under section 2(v) read with section 2(u) of the Foreign Exchange Management Act, 1999

2. Form of Security
The Bonds shall be issued in the form of Government of India Stock in accordance with section 3 of the Government Securities Act, 2006. The investors will be issued a Holding Certificate (Form C). The Bonds shall be eligible for conversion into de-mat form.

3. Date of Issue
Date of issuance shall be September 23, 2016.

4. Denomination
The Bonds shall be denominated in units of one gram of gold and multiples thereof. Minimum investment in the Bonds shall be one gram with a maximum limit of subscription of five hundred gram per person per fiscal year (April – March).

5. Issue Price
Price of the Bonds shall be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the week (Monday to Friday) preceding the subscription period.

6. Interest
The Bonds shall bear interest at the rate of 2.75 percent (fixed rate) per annum on the amount of initial investment. Interest shall be paid in half-yearly rests and the last interest shall be payable on maturity along with the principal.

7. Receiving Offices
Scheduled commercial banks (excluding RRBs), designated Post Offices (as may be notified), Stock Holding Corporation of India Ltd (SHCIL) and recognized stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited are authorized to receive applications for the Bonds either directly or through agents.
Operational  Guidelines of Sovereign Gold Bonds 2016-17 Series II

8. Payment Options
Payment shall be accepted in Indian Rupees through Cash up to a maximum of Rs.20,000/- or Demand Drafts or Cheque or Electronic banking. Where payment is made through cheque or demand draft, the same shall be drawn in favour of Receiving Office.

9. Redemption
i) The Bonds shall be repayable on the expiration of eight years from September 23, 2016, the date of issue of Gold bonds. Pre-mature redemption of the Bond is permitted from fifth year of the date of issue on the interest payment dates.
ii) The redemption price shall be fixed in Indian Rupees on the basis of the previous week’s (Monday – Friday) simple average closing price for gold of 999 purity, published by IBJA.
iii) The Receiving Office shall inform the investor of the date of maturity of the Gold Bond one month before its maturity.

10. Repayment
The Receiving Office shall inform the investor of the date of maturity of the Bond one month before its maturity.

11. Eligibility for Statutory Liquidity Ratio (SLR)
Investment in the Bonds shall be eligible for SLR.

12. Loan against Bonds
The Bonds may be used as collateral for loans. The Loan to Value ratio will be as applicable to ordinary gold loan mandated by the RBI from time to time. The lien on the Bonds shall be marked in the depository by the authorized banks.

13. Tax Treatment
Interest on the Bonds shall be taxable as per the provisions of the Income-tax Act, 1961. The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond

14. Applications
Subscription for the Bonds may be made in the prescribed application form (Form ‘A’) or in any other form as near as thereto stating clearly the grams of gold and the full name and address of the applicant. The Receiving Office shall issue an acknowledgment receipt in Form ‘B’ to the applicant.

15. Nomination
Nomination and its cancellation shall be made in Form ‘D’ and Form ‘E’, respectively, in accordance with the provisions of the Government Securities Act, 2006 (38 of 2006) and the Government Securities Regulations, 2007, published in part III, Section 4 of the Gazette of India dated December 1, 2007.

16. Transferability
The Bonds shall be transferable by execution of an instrument of transfer as in Form ‘F’, in accordance with the provisions of the Government Securities Act, 2006 (38 of 2006) and the Government Securities Regulations, 2007, published in part III, Section 4 of the Gazette of India dated December 1, 2007.

17. Tradability of bonds
The Bonds shall be eligible for trading within 15 days of issuance on a date notified by the Reserve Bank of India.

18. Commission for distribution
Commission for distribution shall be paid at the rate of rupee one per hundred of the total subscription received by the Receiving Offices on the applications received and Receiving Offices shall share at least 50% of the commission so received with the agents or sub-agents for the business procured through them.

19. All other terms and conditions specified in the notification of Government of India in the Ministry of Finance (Department of Economic Affairs) vide number F. No.4(13) W&M/2008, dated 8th October 2008 shall apply to the Bonds.

 This has reference to the GoI notification F.No.4(7)-W&M/2016 and RBI circular IDMD.CDD.No. 462/14.04.050/2016-17 dated August 29, 2016 on the Sovereign Gold Bonds. FAQs in this regard have been placed on our website ( Operational guidelines with regard to this scheme are given below:

1. Application
Application forms from investors will be received at branches during normal banking hours from September 01-09, 2016. Receiving Offices need to ensure that the application is complete in all respects as incomplete applications are liable to be rejected.. Relevant additional details may be obtained from the applicants, where necessary. The Receiving Offices may make arrangements to enable the investors to apply online, in the interest of better customer service.

2. Joint holding and nomination
Multiple joint holders and nominees (of first holder) are permitted. Necessary details may be obtained from the applicants as per practice.

3. Interest on application money
Applicants will be paid interest at prevailing savings bank rate from the date of realization of payment to the settlement date, i.e. the period for which they are out of funds. In case the applicant’s bank account is not with the receiving bank, the interest has to be credited by electronic fund transfer to the account details provided by the applicant.

4. Cancellation
Cancellation of application is permitted till the closure of the issue, i.e., September 9, 2016. Part cancellation of submitted request for purchase of gold bonds is not permitted. No interest on application money needs to be paid if the application is cancelled.

5. Lien marking
As the bonds are government securities, lien marking, etc. will be as per the extant legal provisions of Government Securities Act, 2006 and rules framed there under.

6. Agency arrangement
Receiving Offices may engage NBFCs, NSC agents, LIC agents and others to collect application forms on their behalf. Banks may enter into arrangements or tie-ups with such entities. Commission for distribution shall be paid at the rate of rupee one per hundred of the total subscription received by the Receiving Offices on the applications received and Receiving Offices shall share at least 50% of the commission so received with the agents or sub-agents for the business procured through them.

7. Processing through RBI’s e-Kuber system
Sovereign Gold Bonds will be available for subscription at the branches of scheduled commercial banks and designated post offices through RBI’s e- Kuber system. The e-Kuber system can be accessed either through Infinet or Internet. The Receiving Offices need to enter the data or carry out bulk upload for the subscriptions received by them. They may ensure accuracy of entry of data to prevent occurrence of any inadvertent errors. An immediate confirmation will be provided to them for receipt of application. In addition, a confirmation scroll will be provided for file uploads to enable the Receiving Offices to update their database. On the date of allotment, i.e., September 23, 2016, Certificates of Holding will be generated for all the subscriptions in the name of the sole/principal holder. The Receiving Offices can download the same and take printouts. The Certificates of Holding will also be sent through e-mail to the investors who have provided their email address. The securities will be credited in their de-mat accounts within 2-3 days of allotment, subject to matching of particulars furnished in the application with the Depositories’ records.

8. Printing Certificates of Holding
Certificates of Holding need to be printed in colour on A4 size 100 GSM paper.

9. Servicing and follow up
Receiving Offices, i.e., branches of the scheduled commercial banks, designated post offices , SCHIL and stock exchanges (NSE Ltd and BSE Ltd) will “own” the customer and provide necessary services with regards to this bond e.g. update contact details, receive requests for premature encashment, etc. Receiving Offices will be required to preserve applications till the bonds are matured and are repaid.

10. Tradability
The Bonds shall be eligible for trading within 15 days of issuance on a date notified by the Reserve Bank of India. (It may be noted that only bonds held in demat form with depositories can be traded in stock exchanges)

11. Contact details
Any queries/clarifications may be e-mailed to the following:
(a) Sovereign Gold Bond related: Please click here to send email.
(b) IT related: Please click here to send email.

Aug 29, 2016

Banking is Going to Change in India like Whatsapp did to Mobile

8:45 AM 0
Want to check whether your friend or colleague wants to return the money you had loaned him? Send an SMS to his bank with a request for payment. The SMS will be forwarded to the friend or colleague and if he approves, the bank will pay. The Unified Payment Interface (UPI), launched last week in association with 21 banks, is expected to make some cutting- edge changes, such as the one mentioned above. Today, there are a number of options as far as transferring money goes; these are some new changes that will simplify life to a great extent. Now, there is the Immediate Payment Service ( IMPS) that helps transfer a particular amount immediately, and of course, payment wallets that let you pay at a merchant store by scanning a Quick Response ( QR) Code by using a smartphone. Banking has already shifted to your smartphone with feature- rich apps.

“Digital payments have been growing quickly in the country, but they are still a fraction of the overall payments. Most of the high- frequency small transactions are still in cash.

The ease and convenience UPI offers will help individuals prefer to pay their maids, milkman, newspaper vendor, etc, digitally than in cash,” says Sangram Singh, senior vice-president and head- cards & merchant acquiring business at Axis Bank.

UPI is also the first of its kind system that will bring different financial institutions on one platform. “In other parts of the world, such systems exist but on a very small scale. Say, two banks tie up to offer such a platform.

In India, it’s being done at a national level across financial institutions.
It’s unique to India that an individual can use one app to transfer money using any bank account,” says A P Hota, managing director and chief executive officer at National Payments Corporation of India.
Banking is Going to Change in India like Whatsapp did to Mobile

What’s makes UPI different?
At present, if a person wants to transfer money, he needs the account number and IFSC code of the receiver.

Then, he will need to add the other person as a beneficiary. For credit card transfer, you need the card number. With UPI, an individual only needs make a unique virtual private address ( VPA), simpler than signing up for an e- mail. If you are a bank customer, your VPA can be created like xyz@ bank. If an individual wants to make a payment to her maid, she can simply type the VPA and initiate a transfer.

“Few people remember their card numbers, account numbers and NEFT codes offhand. But the UPI address is easier to remember,” says Ritesh Pai, senior president and country headdigital banking, YES Bank. Pai also points out that until now it was not possible to send a request for money by using a banking channel. With UPI, it’s possible. Once you receive a request for payment and approve it, the money Bankers expect that this simplicity of payments will lead to more people using UPI for all kinds of payments, thereby reducing cash transactions.

“Today, many find bank visits cumbersome. With UPI we will feel the same about visiting an ATM,” says Singh. He thinks that within six months of all banks joining the platform, there will be a meaningful decline in mall cash transactions.
Works across all channels
The current payments systems in the country work in silos. For example, if you want to transfer it’s not possible. With UPI, such as it expands from banks to It’s even possible with UPI to bank. For example, you can without being its customer. If your bank is already part of the UPI, says Union Bank of India, you can start transacting with its account details.
When a person is adding his other bank accounts in the app, he doesn’t even need to know their details.

The registered mobile number is mapped to the UPI. Once you enter the name of the bank you wish to add, it automatically shows the account number of that bank. After authentication, it can be easily added.

UPI transactions are already low cost (less than ₹ 0.45 for each). Once all financial institutions are part of the system, the cost of transactions would come down further.
Better security

If you are worried about the security aspect, relax. UPI authenticates every transaction by using a mobile PIN. Pai says its security features are better than those used by many banks today.

Aug 27, 2016

Excel short cut and keys

8:30 AM 3
Excel short cut and keys
Microsoft excel became necessity now a days as it has a lot features that makes calculations very fast and easy. Also keeping the data as well as sending as attachments is quite simple. But excel has a lot of features that can make work quite simple and fast. These features and short cuts are not known by everybody. In this post tries to tell almost all the shortcuts for excel  that will make your work fast and easy. Here you can check these shortcuts.

Aug 26, 2016

Points to Know About Unified Payments Interface which goes Live with 21 Banks

8:57 AM
Unified Payments Interface (UPI) which will replace RTGS, NEFT and IMPS and current running payment transfer methods in India goes live and will be available in 2-3 days with 21 banks in India. An app with Google play store and App store of Apple will be available to download very soon and you can use it with 19 banks as of now. These are the 19 banks list.
- Andhra bank
- Axis bank
- Bank of Maharashtra
- Bhartiya Mahila bank
- Canara bank
- Catholic Syrian bank
- DCB bank
- Federal Bank
- ICICI Bank
- TJSB Sahakari Bank
- Oriental Bank of Commerce
- Karnataka Bank
- UCO bank
- Union Bank of India
- United Bank of India
- Punjab National Bank
- South Indian Bank
- Vijaya Bank
- YES Bank

Unified Payments Interface (UPI) is developed by National Payments Corporation of India (NPCI), the umbrella organisation for all retail payments system in India.  
Points to Know About Unified Payments Interface which goes Live with 21 Banks

How UPI will work
Unique Payment Interface will work with your mobile no. and bank account. An ID will be created with bank account and mobile number. For example if your mobile number is 0000000012 and you have an account with Axis Bank, your ID may be AXIS@0000000012.
If you want to send money to other, simply you need to go to app and ‘Send Money’ section where you need to enter the ID of recipient and amount. The money will be instant transfer to the other account.

There are some points which should know about Unique Payment Interface.
1- The main purpose of launching UPI is cashless transaction. So you needn’t wait for banking staff to initiate NEFT or RTGS then Authorization and last hourly batches of NEFT for completion.

2- UPI will make your smartphone into payment bank as per Governor of RBI Mr. Raghuram Rajan. You just need a banking app to receive, send or purchasing.

3- NEFT, RTGS and IMPS require many details like Name, Bank account number, IFSC code, Branch. While UPI system just an id of mobile number is required for instantly transfer of funds.

4- You needn’t carry your debit or credit card for shopping as it allows you send or receive payments instantly. You can pay through your mobile anytime to merchant using UPI.

5- The best part of UPI is it will be available 24X7, with no holiday. You can transfer or receive payment anytime.

6- This will bring revolutionary changes in banking in India as it happened when RTGS and NEFT initiate.

Interest Subvention Scheme for Women for 2016-17

8:20 AM 0
Please refer to our circular FIDD.GSSD.CO.BC.NO. 19/09.01.03/2015-16 dated January 21, 2016 on interest subvention scheme under National Rural Livelihoods Mission (NRLM).

2. The revised guidelines for the year 2016-17 on Interest Subvention Scheme under DAY- NRLM, as received from the Ministry of Rural Development, Government of India, are annexed for implementation by all Public Sector Banks and 15 Private Sector Banks (as per list attached).

Interest subvention scheme for Women SHGs - Year 2016-17
I. Interest subvention scheme on Credit to Women SHG during the year 2016-17 for all Commercial Banks (only Public Sector Banks, Private Sector Bank and Regional Rural Banks) and Co-operative banks in 250 districts

i. All women SHGs will be eligible for interest subvention on credit upto Rs. 3 lakhs at 7% per annum. SHG availing capital subsidy under SGSY in their existing credit outstanding will not be eligible for benefit under this scheme.

ii. The Commercial Banks and Cooperative Banks will lend to all the women SHGs in Rural areas at the rate of 7% in the 250 districts is provided at Annexure I

iii. All Commercial Banks will be subvented to the extent of difference between the Weighted Average Interest Charged (WAIC as specified by Department of Financial Services, Ministry of Finance for the year 2016-17 – Annexure II) and 7% subject to the maximum limit of 5.5% for the year 2016-17. This subvention will be available to all the Banks on the condition that they make SHG credit available at 7% p.a. in the 250 districts.

iv. Further, the SHGs will be provided with an additional 3% subvention on the prompt repayment of loans. For the purpose of Interest Subvention of additional 3% on prompt repayment, an SHG account will be considered prompt payee if it satisfies the following criterion as specified by Reserve Bank of India (RBI).

a. For Cash Credit Limit:
i. Outstanding balance shall not have remained in excess of the limit/drawing power continuously for more than 30 days

ii. There should be regular credit and debits in the accounts. In any case there shall be at least one customer induced credit during a month

iii. Customer induced credit should be sufficient to cover the interest debited during the month.

b. For the Term loans: A term loan account where all of the interest payments and/or instalments of principal were paid within 30 days of the due date during the tenure of the loan, would be considered as an account having prompt payment.

The prompt payment guidelines would continue to be guided by RBI guidelines on the subject in the future.

All prompt payee SHG accounts as on the end of the reporting quarter will be eligible for the additional interest subvention of 3%. The banks should credit the amount of 3% interest subvention to the eligible SHG loan accounts and thereafter seek the reimbursement.

v. The scheme is limited to Women Self Help Groups in rural areas only

vi. The funding for the scheme will be met out of Central Allocation under DAY- NRLM

vii. The interest subvention scheme shall be implemented for all Public Sector Banks and Private sector Banks through a Nodal Bank selected by the Ministry of Rural Development (MoRD). The Nodal Bank will operationalize the scheme through a web based platform, as advised by MoRD. For the year 2016-17, Canara bank has been nominated as the Nodal bank by MoRD.

viii. All Banks, who are operating on the Core Banking Solutions (CBS) can avail the interest subvention under the scheme.

ix. In order to avail the Interest Subvention on credit extended to the SHGs @ 7%, regular subvention, all Public Sector Banks are required to upload the SHG loan account information on the Nodal Bank’s portal as per the required technical specification. Public Sector Banks should also submit the claims for 3% additional subvention on the same portal. Public Sector Banks must submit the regular claims (difference between WAIC or lending rate and 7%) and additional claims (@ 3% on prompt repayment) on a quarterly basis as on June 30, 2016, September 30, 2016, December 31, 2016 and March 31, 2017 by last week of the subsequent month.

x. In order to avail the interest subvention on credit extended to the SHGs @7% and additional subvention claims of 3%, all Public Sector Banks and Private Sector Banks are required to submit claim certificate on quarterly basis to the nodal bank. The claims submitted by any bank should be accompanied by claim certificate (in original) certifying the claims for subvention as true and correct (Annexure-III to V). The claims of any Bank for the quarter ending March 2017 will be settled by MoRD only on receipt of the Statutory Auditor’s certificate for the complete FY16-17 from the Bank.

xi. Any remaining claim pertaining to the disbursements made during the year 2016-17 and not included during the year, may be consolidated separately and marked as an 'Additional Claim' and submitted to Nodal Bank by Public Sector Banks and Private Sector Banks latest by June 30, 2017, duly audited by Statutory Auditor’s certifying the correctness.
xii. Any corrections in claims by Banks shall be adjusted from later claims based on auditor’s certificate. For Public Sector Banks and Private sector Banks, the corrections must be made on the Nodal Bank’s portal accordingly.
Interest Subvention Scheme for Women for 2016-17

II. Interest subvention scheme for Category II Districts (Other than 250 districts).
For category II districts, comprising of districts other than the above 250 districts, all women S.H.Gs under DAY- NRLM will be eligible for interest subvention to avail the loan facility at an interest rate of 7%. The funding for this subvention will be provided to the State Rural Livelihoods Missions (S.R.L.Ms) from the allocation for DAY- NRLM. In the Category II districts, Banks will charge the SHGs as per their respective lending norms and the difference between the lending rates and 7% subjected to a maximum limit of 5.5% for the FY16-17 will be subvented in the loan accounts of the SHGs by the SRLM. In pursuance of the above, the salient features and the operational guidelines in respect of the interest subvention for the category II districts, for the year 2016-17 are as follows:'

(A) Role of the Banks:
All banks who are operating on the Core Banking Solution (CBS) are required to furnish the details of the Credit disbursement and Credit outstanding of the SHGs across all districts in the desired format as suggested by the MoRD, directly from the CBS platform, to the Ministry of Rural Development (through FTP) and to the SRLMs. The information should be provided on a monthly basis to facilitate the calculation and disbursement of the Interest Subvention amount to SHGs.

(B) Role of the State Governments:
i. All women SHGs, are regarded as SHGs under DAY- NRLM and will be eligible for interest subvention on credit upto ₹ 3 lakhs at the rate of 7% per annum on prompt repayment.

ii. This scheme will be implemented by the State Rural Livelihood Missions (SRLMs). SRLMs will provide interest subvention to the eligible SHGs who have accessed loan from Commercial and Cooperative Banks. The funding for this subvention will be met out of the Central Allocation and State Contribution as per the norms of Government of India.

iii. The SHGs will be subvented with the extent of difference between the lending Rate of the banks and 7% subject to a maximum limit of 5.5% for the year 2016-17 by the SRLMs, directly on a monthly/quarterly basis. An e-transfer of the subvention amount will be made by the SRLM to the loan accounts of the SHGs who have repaid promptly.

iv. For the purpose of the Interest Subvention, an account will be considered as prompt payee if it satisfies the following criterion as specified by RBI:

a. For Cash Credit Limit:
1. Outstanding balance shall not have remained in excess of the limit/drawing power continuously for more than 30 days

2. There should be regular credit and debits in the accounts. In any case there shall be at least one customer induced credit during a month

3. Customer induced credit should be sufficient to cover the interest debited during the month.

b. For the Term loans: A term loan account where all of the interest payments and/or instalments of principal were paid within 30 days of the due date during the tenure of the loan, would be considered as an account having prompt payment

The prompt payment guidelines would continue to be guided by RBI guidelines on the subject in the future.

v. Women SHGs who have availed capital subsidy under SGSY in their existing loans, will not be eligible for benefit of Interest Subvention for their subsisting loan under this scheme.

vi. SRLMs should submit Quarterly Utilization Certificate indicating subvention amounts transferred to the Loan accounts of the eligible SHGs.

III. The States with state specific interest subvention schemes are advised to harmonize their guidelines with the Central scheme

Aug 25, 2016

Points Bank Should Tell before Opening a Bank Account

8:58 AM 0
Planning to open a new bank account with any bank. There are few things which bank may ask to you but many things bank should inform you about the bank’s policy and charges etc. First, bank will ask you to comply with Know Your Customer (KYC) for any type of account either saving or current or even for FDr.

There is the list of information which bank must provide to the customer for opening an account.
1- Interest on saving account- bank must tell the customer about interest rate on saving account as banks are free to choose interest rate on their own. Some banks give 6% interest whereas some give 4%.

2- Interest period- Banks should tell customers about the time when interest will be credited to your account. Means either monthly, quarterly, half yearly or annually.

3- Minimum balance and charges- Customers should know what is the minimum balance requirement in the account? . For saving account, some banks ask for 1000 whereas some ask 10000.
For current account, the minimum balance requirement is changed with bank to bank. Each bank has his own rules in the matter of minimum balance requirement.
Same as minimum balance, the charges for non-maintaing minimum balance are different bank to bank. Some banks calculate on monthly basis whereas some on quarterly basis. For example Axis bank charges around 500+service tax monthly on non-maintaining  minimum balance requirement.
Points Bank Should Tell before Opening a Bank Account

4- Transactions- Banks should tell about number of transaction an account holder can do with home branch and non-home branch. The cash limit and the transaction limit should also be clear.

ATM transactions should also be clear as how many transactions are free for other’s bank ATM and afterward charges for each transaction.

5- Nominee- Banks should aware and motivate you to avail the nominee facility which is available at the bank. However, nominating nominee is a desirable thing and not mandatory but it always make harassment free in case of anything wrong.

No TDS u/s 194C for Terminaling Charges to Avail Infrastructure Facilities

8:29 AM 0
Payment made by assessee for terminalling charges were actually for availing infrastructure facilities and as such, there was no work contract involved, hence, provisions of section 194C were not attracted


• Assessee company engaged in oil business made payment of terminalling charges to BRPL without deducting TDS.

• Assessing officer held that assessee's transactions were very much attracted towards provisions of section 194C and non-deduction of TDS had made assessee in default under 201(1) and accordingly charged interest under section 201(1A).

• The commissioner(Appeals) confirmed the action of the Assessing Officer.

• On appeal to the Tribunal:
No TDS u/s 194C for Terminaling Charges to Avail Infrastructure Facilities


• From the copy of Agreement between assessee and BRPL it is evident that payment was made for availing the infrastructure facilities and as such, there was no work contract of the nature as specified under section 194C. It is also pertinent to note that Legislative has brought amendment to section 194-I for making such transactions subject to TDS but which came into force with effect from 1-6-2007 only. However, the dispute in the instant case relate to the period prior to the amendment under section 194-I.

• For making a transaction subject to TDS under section 194-C there has to be written or unwritten works contract. From the facts it is found that in the instant case the assessee was buying the petroleum products from BRPL. Besides the above the loading services were also provided by BRPL in connection with the purchase of the petroleum product. For the loading services the assessee was making the payment separately to BRPL. The petroleum products were purchased by the assessee in bulk and regular basis for which loading facility was provided by BRPL. The assessee for availing the loading facility was making the payment to the same party from which he was buying the products i.e. BRPL. Thus the loading facility was intricately linked with every purchase of the products. It was not possible for the assessee to purchase the products without availing the infrastructure facility of BRPL. Thus it shall not be inappropriate to treat the expenses on infrastructure facility at par with the purchase. The method for the payment of infrastructure facility and entering into a separate agreement cannot be the sole basis to treat the transaction independent of the purchase. The rate lump sum consideration was fixed for the infrastructure facility. No direct labour was involved. Therefore, the provisions of section 194C are not applicable to the assessee.

Aug 24, 2016

Honest and Harrassment Free Tax Collection System in India

8:14 AM 0
Trade and commerce now penetrate both urban and rural India. Sixty years ago, there was hardly a national marketer that covered the greater part of rural India. Sales were mostly in urban areas. Today, rural markets contribute significant proportions to sales of many products, especially of fast-moving consumer products.

Sixty years ago, as a management trainee with Hindustan Lever, Ashok worked as a salesman in urban and rural areas. His connections with rural and urban markets continued for many years during my corporate career. Until the 1960s, shipments were made in wooden boxes, which were heavy and cumbersome to handle and open. Railways were the primary means of transport. Lorries did not usually go to most of the small towns and villages. There were few rural roads and so no lorry routes to villages. The wholesaler who bought the goods had to take delivery at the nearby railhead and carry the goods back by bullock cart or other available means. Hindustan Lever innovated the use of strong cardboard boxes to lighten the delivery. Cardboard boxes are, since the 1960s, almost universally the packing material for most products. There were few bank accounts in rural India and few bank branches even in small towns. Hindustan Lever gave such traders from non-banked locations a ‘bank negotiation allowance’ to travel to the nearest bank, where goods could be collected at the lorry depot after clearing documents at the branch.

Sales and marketing people had to know the complex procedures and rates of indirect taxes in India. These might be levied by local authorities, state governments and the Centre as excise duties, and customs duties on imports. Central duties were included in the price at which goods were invoiced by the manufacturer. Central excise duties varied between products, and the size of the manufacturing unit. Alcohol-based products and petrol attracted both central and state excise. In some cases, of products with liquid content, claims of ‘evaporation loss’ enabled less payment than due on the manufactured quantity.

When the goods left the factory, they had to cross state government borders. Many trucks did not have interstate transit licences and had to pay levies at each border. In addition, each state levied sales taxes at varying rates on different products. The lorry had to stop at state borders and what was brought into the state had to be certified. If only a portion was to be sold in the state, what was to go onward to other states was also certified.

The levy of sales tax could be at the first point of sale, at the final point, or at multiple points or at each point of sale till the consumer. The tax at the first point was least remunerative to the state, while at the last point, with taxes being levied at each point of sale, there were better revenues. However, the administration of multipoint taxes is complex, harasses the seller and the buyer, and is open to manipulation. Leakages reduce the revenues collected.
Honest and Harrassment Free Tax Collection System in India

In addition, many local bodies and municipalities levy a local body tax (or Octroi) on goods entering their territory. This is a cumbersome levy. The tax is collected at the point of entry and results in the carrier having to halt with the goods until the matter is settled. It is subject to massive corruption. Many authorities have abolished it, but there has been repeated resumption. Vested interests would not sacrifice their illegal earnings out of such levies. Further, Octroi can be a significant source of revenue for local authorities who have few tax options to raise revenues.

Property registration tax, motor vehicle tax, professional tax, etc, are small earners and not buoyant, unlike Octroi. Maharashtra has retained it as an entry tax, with similar problems as Octroi.

Thus, products—before reaching the point of consumption—have paid import duty and central excise duty before they leave the factory, included in the invoiced price. If the sales tax levy is at the first point, the process is simpler since only manufacturing or importing establishments are involved. The other points of levy create complications by requiring inspection of thousands of books of accounts of traders. It is rampant with harassment and considerable corruption.

The federal nature of India gives states and local authorities the power to levy taxes on sales in their territories. State governments have limited tax powers. States do get a share of the direct taxes collected by the Centre, as determined every five years by the Finance Commission. But the Centre at times avoids this by levying special cesses that it does not have to share.

When each state government levies its own rate of tax, end-product prices vary a great deal between different states. Thus, there could also be smuggling across the borders between low-tax states and high-tax states. Sales tax has made India an agglomeration of markets and not a single common market for the whole nation. That makes national marketing difficult and discriminates between prices paid at different places.

In 1970, when Ashok led the launch of Chiclets chewing gum in India, He identified the target consumers as children aged between 4 and 16. They would not be usually able to pay except in round coins. They fixed on 10 and 50 paise for packets of 2 and 10 tablets. They were single coins and more likely to be given to a pestering child by a parent. To achieve this objective, they classified states and markets into five categories of sales tax rates and varied our invoice price to enable the end price in these markets after taxes to be 10 and 50 paise, while enabling a comfortable trade margin of 16-18%. Their strategy was successful. If they had variable end prices related to sales tax rates, and no single coin for each pack, it would have been much less so. Most manufactured consumer products today have a single end price all over India.

The rationale for a single goods and services tax across the country is threefold—to minimise ‘tax terrorism’ by sales tax officials; minimise evasion and corruption; and to simplify doing business. However, this does diminish the federal structure of the country. Individual state governments will no longer have the flexibility to vary sales tax rates according to their revenue needs. Other state governments in the GST Council must concur to a rate change.

The Fourteenth Finance Commission has encouraged federalism by merging grants for many central schemes into the tax share of states so that they can decide to spend as they wish and not per the diktats of the central government. A single nationwide goods and services tax would also reduce harassment of taxpayers, make collection easier, and almost certainly boost tax revenues as evasion and corruption will get reduced. There will be glitches and disagreements, but the proposed Council can smoothen them.

When GST becomes operational, we will be marketing goods and services in an India where lightweight packing is in extensive use, there is a widespread rural road network, an extensive lorry network, bank branches and post office payments banks in many towns and villages, and a less harassing and more honest indirect tax collection system.
It has taken time, but we are privileged to witness the change.

TCS on Scrap also applicable on Traders Dealing in Ship Breaking

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Where assessee was trading into scrap, provisions of section 206C were attracted and assessee was duty bound to collect TCS on sale of scrap

• Where assessee had himself admitted that he was dealing in the scrap generated from the breaking of the ship and had purchased the scarp, the assessee was liable to collect tax at source under section 206C on the sale of scrap. It was not necessary that such mechanical working (breaking of the ship) should be carried out by the assessee himself. The material sold by the assessee could not be used as such without any modification by the buyer of the said scrap. As the said material/goods came from the breaking of the ship, these goods were sold to the manufacturer/rerolling mills, as scrap therefore, the goods (scrap) sold by the assessee were not usable as such and therefore, the assessee was required to collect TCS from the buyer.
TCS on Scrap also applicable on Traders Dealing in Ship Breaking 

Aug 23, 2016

Proposed Registration under GST(Goods and Service Tax)

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It is well know that after introduction of GST, Whole India will become one market and there will be free flow of Goods, Services and Input tax credit (Cenvat Credit) from one place to another. From taxpayers point of view registration is one of the important factors to proceed with GST. The provision relating to registration is covered under the Chapter IV of Model Goods and Services tax Act 2016. Government has already published business process on registration. By combined reading of these two documents, it seems that the process of registration is much easier in GST Law. The exemption limit under proposed GST law has also been drastically narrowed [Rs. 10 laks/Rs. 5 Lakhs] as compared to limit as stated in Central Excise Law[ Rs. 150 Lakhs]. Many provisions as stated in Central Excise, Service tax and VAT law are kept as there are and new concept like casual dealer has been added. It seems that all the procedure relating to registration are online but in case need arises, physical verification, also can be done.

Who needs to be registered under GST regime?

The provisions related to registration are provided under Chapter VI of Goods and Services Tax Law 2016 (hereinafter referred as An Act). According to Section 19, every person who is registered or holds a registration certificate under Central Excise law, Service tax law, Central Sales tax or under State VAT law shall be liable to be registered under this Act with effect from date of enactment of this Act.

In Case of a person who is not registered under any of the above act shall be liable to be registered under this act if his turnover in financial year exceeds the taxable threshold. The threshold limit of turnover for the purpose of registration is kept Rs. 4 Lakhs for North East States including Sikkim and Rs. 9 Lakhs for other States.

For this purpose turnover means all India Gross Annual turnover including turnover of exempted goods, exempted services and exports. So if any person is doing the business from more than one location, turnover of all such units shall be considered for this purpose.

It may be noted that if a person having turnover below threshold limit but wants to get registered under GST act can apply voluntarily for the same under section 19(3). However a person doing following activities has to apply for registration irrespective of his turnover;

(1) Inter-state supply
(2) Person liable for payment of GST under reverse charge basis
(3) Casual Taxable person
(4) Non-resident taxable person
(5) Person Supplying a goods on behalf of other person as an agent or otherwise
(6) Input service distributor
(7) Person supplying goods and/or services [other than branded goods] through electronic commerce operator
(8) Electronic commerce operator.
(9) An aggregator supplying goods under his own brand name

What is the time limit for the registration?
Every Manufacturer or a Service provider or a dealer registered under Central Excise Act or under Service tax law or State Vat law will get automatic Pan based registration number without fresh application.

In case of new dealer, he has to apply online for the registration within a specified period as stated below

Sr. No     Category                                                    Time Limit
1 A dealer crossing threshold limit as                          Within 30 days from crossing of such limit.           specified under GST Law
 [Rs 9 Lakhs or Rs 4 Lakhs]

 2 Other than 1 above                                              Within thirty days from the date on which he                                                                                                  becomes liable for registration
How to apply for the registration under GST?
Every person who wants to obtain a registration needs to apply for registration through Goods and Services Tax Network portal (GSTN Portal). In Case of fresh registration a person needs to follow following procedure
Proposed Registration under GST(Goods and Service Tax)

A] Procedure for fresh registration under GST

Application for Registration

(1) A person needs to apply online for registration either through GSTN Portal or through Facilitation Center in such form along with such documents as may be prescribed. The application must be signed using digital signature. In absence of digital signature, taxpayer would have to send a signed copy of the summary extract of the submitted application form printed from the portal to a central processing center to be operated by GSTN.

Confirmation Message

(2) Once a completed application is submitted online, a message asking for confirmation will be sent through e-mail and SMS to the authorized signatory of the applicant. On receipt of such confirmation from the authorized signatory, Acknowledgement Number would be generated and intimated to the applicant.

Documents required for registration
(3) Following documents shall be required for the purpose of registration

a.Proof of Constitution >such as Partnership deed, Registration Certificate under various statute, etc.

b. Details & Proof of place of business such as copy of electricity bill, municipal tax receipt, rent agreement, etc.

c. Details of bank account such as name of Account Holder, MICR code, IFSC code and bank branch details.

d. Details of authorized signatory
e. Photograph of
i. Proprietor in case of Proprietary Concern
ii. Partners in case of Partnership Firm / LLP – Managing/ Authorized
iii. Karta in case of HUF
iv. Managing Director or the Authorised Person in case of Company
v. Managing Trustee in case of Trust
vi. Members of Managing Committee in case of Association of Person or Body of Individual
vii. CEO or his equivalent in case of Local Body
viii. CEO or his equivalent in case of Statutory Body
ix. Person in Charge in case Other than above category of person –

Verification of Filed Information
(4) On receipt of the online application GSTN system shall carry out a preliminary verification of documents like CIN number, PAN Number, Adhar Number with various authorities through inter-portal connectivity. A copy of signed application along with the documents as stated above shall be sent to the GSTN portal.

After primary verification GSTN portal shall forward such application to Central/State tax authorities for further verification. Central/state authorities shall within 3 working days verify the correctness of details as shown in the application and will communicate the same to the GSTN portal. If the details as filed by the applicant are correct, registration certificate shall be granted to the applicant. If registration is refused the reason for the same shall be communicated to the concerned person. However reasonable opportunity of being heard shall be given to the applicant (Section 19(8))

Grant of Registration Certificate
(5) The Central/State authorities must respond on application to GSTN portal within 3 working days, either communicating approval or raising a query. In case non communication of approval or rejection, the application shall be deemed to be approved by the authorities and GSTN portal shall generate the registration certificate and will communicate to the Applicant through e-mail and SMS. Applicant can download the RC from GSTN Portal

In case if tax authorities raise any query, same shall be communicated to applicant. Applicant will have to respond to the same within a period of 7 working days failing which the application will be rejected. Within next 7 working days, tax authorities will respond to the applicant and will grant the Registration Certificate.

[B] Procedure for migration of existing registrants under GST

Migration of Data in GSTN
(1) All existing registrants, who have registered themselves either under Central Law or with State Law or with both shall get automatically migrated into GST. The migration activity is conducted by NSDL with the co-ordination of central and state tax authority.

Collection of additional information

(2) Currently for the purpose of registration under Central & State Law, 50 to 107 fields are required to be filled in. Under proposed GST, 120 fields are designed for registration. Thus there is gap of 13 to 70 fields for which the data will have to be collected from the taxpayer.

The GSTN shall provide a provisional registration number based on the data filtered by the NSDL. The user name and password shall be communicated to tax authorities who shall communicate the same to taxpayer. After getting user id and password, taxpayer will have to complete the remaining details of registration form along with the requisite document within the stipulated time.

Grant of Registration Certificate
(3) After completion of form, tax authorities shall verify the same with the documents filled by the taxpayer and will communicate the same to the GSTN. After approval from tax authorities, GSTN shall generate the registration certificate and shall communicate the same to the taxpayer through E-mail and SMS.

Registration Number
(4) After successful completion of registration process, GSTN portal shall provide 15 digit alpha Numeric registration number. The registration number will be known as Goods and Service Tax Identification Number (GSTIN). The structure GSTIN will be as follow

State Code Pan Number Entity Code Blank Check Digit
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
State code shall be taken from the Indian Census 2011. Entity code denotes number of registered entities under a state. E.g. if a legal entity is having single registration in a particular state, "1" shall be the 13th code of registration. This way 35 business vertical of same legal entity can be registered in a state. 14th and 15th digit is intentionally kept blank for future use.

Whether amendment in registration certificate is possible?

(1) It is possible that the details as provided in the application form for registration may change subsequently. In such event taxpayer must intimate such change to the tax authorities under section 20(1) of an act in such manner as may be prescribed.

(2) In case of change to composition scheme will require submission of reason along with the documents to the tax authorities

(3) The officer reserves a right to approve or reject the amendments under section 20(2)of an Act. Cancellation of amendments can't be done without giving a show cause notice and without giving an opportunity of being heard

In what circumstances registration can be cancelled or surrendered?
The proper officer may, either on his own motion or on an application of the taxpayer cancel the registration within such period as may be prescribed. In the following cases, the registration can be either surrendered by the registrant or cancelled by the tax authorities:

(1) the business has been discontinued or transferred fully
(2) there is any change in the constitution of the business; or
(3) The taxable person, other than the person registered under sub-section (3) of section 19, is no longer liable to be registered under Schedule III.

(4) The proper officer may, in the manner as may be prescribed, cancel the registration of taxable person from such date, including any anterior date, as he may deem fit, where, -
(a) The registered taxable person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or
(b)A person paying tax under Section 8 has not furnished returns for three consecutive tax periods; or
(c) Any taxable person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or
(d) Any person who has taken voluntary registration under sub-section (3) of section 19 has not commenced business within six months from the date of registration.
(5) Where any registration has been obtained by means of fraud, willful misstatement or suppression of facts, the proper officer may cancel the registration with retrospective effect, subject to the provisions of Section 29.

The cancellation of registration may be preceded by system generated notice giving 7 days' time for furnishing reply by the taxpayer. Principle of natural justice to be followed before cancellation, i.e., giving an opportunity to taxpayer to be heard.

If the taxpayer approaches the tax authority for revocation of surrendered or cancelled registration, the surrendered / cancelled registration can be revoked under Section 22 of the Act. The action for revocation would be initiated by that Authority which has cancelled the registration or had earlier accepted the surrender of registration

Multiple registrations in case of multiple locations
In case a person is doing business from multiple locations in a State, he has to apply separately for registration for each and every location of business under sub Section (2) of Section 19 of the act.

For each State, the taxable person will have to take a separate registration, even though the taxable person may be supplying goods or services or both from more than one State as a single legal entity

Registration as a casual dealer
Sometimes a taxable person wants to do a business in a State or States for a limited period. In such case, he needs a temporary registration for that period only. In such event a taxable person can apply for the registration as a casual taxable person. Casual taxable person is defined under section 2(21) as a person who occasionally undertakes transactions involving supply of goods and/or services in the course or furtherance of business whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business.

Casual taxable person or non-resident person can apply for registration under Subsection (1) of Section 19A along with the deposit equivalent to his estimated tax liability for the said period. The proper officer shall grant such registration certificate for the period of ninety days. The said period can be further extended up to next ninety days by the authority on the request. Such additional period shall be granted only on the receipt of additional deposit towards estimated tax liability for said additional period.
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