Press Information Bureau

13.06.2019

Insurance

Government Reduces the Rate of ESI Contribution from 6.5% to 4%

MANU/PIBU/0619/2019

The Government of India has taken a historic decision to reduce the rate of contribution under the ESI Act from 6.5% to 4%(employers' contribution being reduced from 4.75% to 3.25% and employees' contribution being reduced from 1.75% to 0.75%). Reduced rates will be effective from 01.07.2019.Thiswould benefit 3.6 crore employees and 12.85 lakh employers.

The reduced rate of contribution will bring about a substantial relief to workers and it will facilitate further enrollment of workers under the ESI scheme and bring more and more workforce into the formal sector. Similarly, reduction in the share of contribution of employers will reduce the financial liability of the establishments leading to improved viability of these establishments. This shall also lead to enhanced Ease of Doing Business. It is also expected that reduction in rate of ESI contribution shall lead to improved compliance of law.

The Employees' State Insurance Act 1948 (the ESI Act) provides for medical, cash, maternity, disability and dependent benefits to the Insured Persons under the Act. The ESI Act is administered by Employees' State Insurance Corporation (ESIC). Benefits provided under the ESI Act are funded by the contributions made by the employers and the employees.

Under the ESI Act, employers and employees both contribute their shares respectively. The Government of India through Ministry of Labour and Employment decides the rate of contribution under the ESI Act. Presently, the rate of contribution is fixed at 6.5% of the wages with employers' share being 4.75% and employees' share being 1.75%. This rate is in vogue since01.01.1997.

The Government of India in its pursuit of expanding the Social Security Coverage to more and more people started a programme of special registration of employers and employees from December, 2016 to June, 2017 and also decided to extend the coverage of the scheme to all the districts in the country in a phased manner. The wage ceiling of coverage was also enhanced from Rs. 15,000/- per month to Rs. 21,000/- from 01.01.2017.

These efforts resulted insubstantial increase in the number of registered employees i.e. Insured Persons and employers and also a quantum jump in the revenue income of the ESIC.

The Government of India is committed to the cause of welfare of employees as well as employers.

It is also committed to improve the quality of medical services & other benefits being provided under the ESI scheme.

Tags : Rates Reduction ESI Contribution

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Press Information Bureau

12.06.2019

Commercial

Cabinet approves the Special Economic Zones (Amendment) Bill, 2019

MANU/PIBU/0602/2019

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved to introduce a Bill, namely, the Special Economic Zones (Amendment) Bill, 2019 that is the Bill to replace the Special Economic Zones (Amendment) Ordinance, 2019 (12 of 2019). The Bill will be introduced in ensuing session of the Parliament. After the amendment of sub-section (v) of section 2 of the Special Economic Zones Act, 2005, a trust or any entity notified by the Central Government will be eligible to be considered for grant of permission to set up a unit in Special Economic Zones.

Tags : Bill Approval Amendment

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Press Information Bureau

11.06.2019

Commercial

Finance Minister holds Second Pre-Budget Consultation with the Representatives of Industry, Services and Trade Groups

MANU/PIBU/0591/2019

The Union Minister of Finance & Corporate Affairs, Smt. Nirmala Sitharaman, started her Pre-Budget Consultations with different stakeholder Groups in connection with the forthcoming General Budget 2019-20 here today. Her second Meeting was with the stakeholder Groups from Industry, Trade and Services Sectors.

In her Opening Remarks, the Finance Minister, Smt. Nirmala Sitharaman said that the Central Government has taken several industry specific initiatives since 2014 that had significantly improved the overall business environment. She said that the emphasis was given to simplification and rationalization of the existing rules and introduction of Information Technology to make governance more efficient and effective. As a result, the Finance Minister said that India has considerably improved its ranking to 77th position among the 190 countries and has kept 23 ranks over its rank of 100 in the Doing Business Report 2018 as per the World Bank Doing Business (DB) Report, 2019. The Finance Minister, Smt. Sitharaman also mentioned that since 24 % of the total work force in India is in industrial sector, therefore, in order to reap the benefits of demographic dividend, industry should be able to accommodate more work force, the Minister concluded.

Along with the Finance Minister, the meeting was attended by Shri Anurag Thakur, Minister of State for Finance and Corporate Affairs, Shri Subhash C. Garg, Finance Secretary, Shri Girish Chandra Murmu, Expenditure Secretary, Shri Ajay Narayan Pandey, Revenue Secretary, Shri Rajeev Kumar, Secretary, DFS, Shri Atanu Chakraborty, Secretary, DIPAM, Shri Yogendra Tripathi, Secretary, Ministry of Tourism, Shri Amit Khare, Secretary, Ministry of Information and Broadcasting, Shri Ramesh Abhishek, Secretary, Department for Promotion of Industry and Internal Trade, Shri Anup Wadhawan, Secretary, Department of Commerce, Ministry of Commerce and Industry, Shri Pramod Chandra Mody, Chairman, CBDT, Shri P.K Das, Chairman, CBIC, Dr K.V. Subramanian, CEA and other senior officials of the Ministry of Finance.

With a view to give boost to Indian economy, the representatives of Industry, Services and Trade Sectors submitted several suggestions concerning Industrial sector, land reforms, special economic zones, industrial policy, investment in research and development, simplification of tax regimes, tapping potential in tourism sector, Foreign Direct Investment (FDI), Good & Services Tax (GST), Capital Gains Tax, Corporate Tax, MSME Sector, e-commerce, skill development, education and healthcare sectors, start-ups, media and entertainment sector and food manufacturing industry.

Representatives of Industry, Services and trade Sectors included Shri Vikram S. Kirloskar, President, Confederation of Indian Industry (CII), Shri Balkrishan Goenka, President, ASSOCHAM, Shri Sandip Somany, President, FICCI, Shri Pramod Agrawal, chairman, Gem & Jewellery Export Promotion Council, Shri Animesh Saxena, president, Federation of Indian Micro and Small & Medium Enterprises (FISME), Shri Ajit Kumar, Director, Hinduja Group, Smt. Rajni Aggarwal, President, Federation of Indian Women Entrepreneurs (FIWE), Shri Panaruna Aqeel Ahmed, Chairman, Council for Leather Exports, M/s Florence Shoe Co. Pvt. Ltd., Shri Rahul Bothra, CFO, Swiggy, Bundl Technologies Pvt. Ltd., Shri Ajay Sahai, Director General & CEO, Federation of Indian Export Organisations, Shri Raj Nair, President, IMC Chamber of Commerce and Industry, Shri Gopal Srinivasan, Chairman, TVS Capital Fund Pvt. Ltd., Shri P.R. Venketrama Raja, Vice Chairman, MD & CEO, Ramco Systems, Shri Sachin Taparia, Chairman & CEO, local Circles India Pvt. Ltd.

Tags : Pre-Budget Consultation Representatives Industry

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Press Information Bureau

11.06.2019

Civil

Indian Railway Station Development Corporation (IRSDC) enters into Tripartite Agreement with French National Railways (SNCF) and AFD, a French Agency

MANU/PIBU/0592/2019

AFD a French agency, has agreed to provide in-kind grant financing up to 7,00,000 EURO, through French National Railways (SNCF)-Hubs and Connexions as a Technical Partner to IRSDC to support the Railway Station Development Program in India This will impose no financial liability on IRSDC or Indian Railways.

Indian Railway Station Development Corporation (IRSDC) entered an Tripartite Agreement with French Railways (SNCF) & AFD, a French Agency on 10th June, 2019. On this occasion, Shri Suresh Angadi, Minister of State of Railways and H. E. Mr. Jean Baptiste Lemoyne, Minister of State, Ministry of Europe and Foreign Affairs, Government of France, H.E. Mr Alexandre Ziegler, Ambassador of France in India & senior officers were present from both side.

Under this agreement, AFD a French agency, has agreed to provide in-kind grant financing up to 7,00,000 EURO, through French National Railways (SNCF)-Hubs and Connexions as a Technical Partner to IRSDC to support the Railway Station Development Program in India. This will impose no financial liability on IRSDC or Indian Railways.

Speaking on this occasion, Shri Suresh Angadi, Minister of State said, "India and France have a strong and long standing prosperous partnership in the Railway sector. French Railways (SNCF) in the past has been associated with Indian Railways in conducting speed upgradation study for Delhi-Chandigarh section and station development of Ludhiana & Ambala stations. I am sure that this effort will go a long way in further strengthening Indo-French cooperation and will help Indian Railways in positioning its stations to world class standards."

Tags : IRSDC Tripartite Agreement French Agency

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Press Information Bureau

11.06.2019

Goods and Services Tax

Transition plan to the new GST Return

MANU/PIBU/0595/2019

The GST Council in its 31st meeting decided that a new GST return system will be introduced to facilitate taxpayers. In order to ease transition to the new return system, a transition plan has been worked out. The details of the indicative transition plan are as follows: -

In May, 2019 a prototype of the offline tool has already been shared on the common portal to give the look and feel of the tool to the users. The look and feel of the offline tool would be same as that of the online portal. Taxpayers may be aware that there are three main components to the new return - one main return (FORM GST RET-1) and two annexures (FORM GST ANX-1 and FORM GST ANX-2).

From July, 2019, users would be able to upload invoices using the FORM GST ANX-1 offline tool on trial basis for familiarisation. Further, users would also be able to view and download, the inward supply of invoices using the FORM GST ANX-2 offline tool under the trial program. The summary of inward supply invoices would also be available for view on the common portal online. They would also be able to import their purchase register in the Offline Tool and match it with the downloaded inward supply invoices to find mismatches from August 2019.

Between July to September, 2019 (for three months), the new return system (ANX-1 & ANX-2 only) would be available for trial for taxpayers to make themselves familiar. This trial would have no impact at the back end on the tax liability or input tax credit of the taxpayer. In this period, taxpayers shall continue to fulfil their compliances by filing FORM GSTR-1 and FORM GSTR-3B i.e. taxpayers would continue to file their outward supply details in FORM GSTR-1 on monthly / quarterly basis and return in FORM GSTR-3B on monthly basis. Non-filing of these returns shall attract penal provisions under the GST Act.

From October, 2019 onwards, FORM GST ANX-1 shall be made compulsory and FORM GSTR-1 would be replaced by FORM GST ANX-1. The large taxpayers (i.e. those taxpayers whose aggregate annual turnover in the previous financial year was more than Rs. 5 Crore) would upload their monthly FORM GST ANX-1 from October, 2019 onwards. However, the first compulsory quarterly FORM GST ANX-1 to be uploaded by small taxpayers (with aggregate annual turnover in the previous financial year upto Rs. 5 Crore) would be due only in January, 2020 for the quarter October to December, 2019. It may be noted that invoices etc. can be uploaded in FORM GST ANX-1 on a continuous basis both by large and small taxpayers from October, 2019 onwards. FORM GST ANX-2 may be viewed simultaneously during this period but no action shall be allowed on such FORM GST ANX-2.

For October and November, 2019, large taxpayers would continue to file FORM GSTR-3B on monthly basis. They would file their first FORM GST RET-01 for the month of December, 2019 by 20th January, 2020.

The small taxpayers would stop filing FORM GSTR-3B and would start filing FORM GST PMT-08 from October, 2019 onwards. They would file their first FORM GST-RET-01 for the quarter October, 2019 to December, 2019 from 20th January, 2020.

From January, 2020 onwards, all taxpayers shall be filing FORM GST RET-01 and FORM GSTR-3B shall be completely phased out.

Separate instructions shall be issued for filing and processing of refund applications between October to December, 2019.

Tags : Transition plan GST Return Introduction

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Reserve Bank of India

10.06.2019

Banking

Sale of Securities held in Held to Maturity (HTM) Category - Accounting treatment

MANU/RMIC/0067/2019

Please refer to Para 16.2 of Master Circular DCBR.BPD.(PCB).MC.No.4/16.20.000/2015-16 dated July 01, 2015 on Investments by Primary (Urban) Co-operative Banks (UCBs) indicating that securities acquired by banks with the intention to hold them up to maturity will be classified under HTM category.

2. In this connection, it is reiterated that UCBs are not expected to resort to sale of securities held in HTM category. However, if due to liquidity stress, UCBs are required to sell securities from HTM portfolio, they may do so with the permission of their Board of Directors and rationale for such sale may be clearly recorded. Profit on sale of investments from HTM category shall first be taken to the Profit and Loss account and, thereafter, the amount of such profit shall be appropriated to 'Capital Reserve' from the net profit for the year after statutory appropriations. Loss on sale shall be recognized in the Profit and Loss account in the year of sale.

Tags : Securities Sale Accounting treatment

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