GST - Discussion on all aspects.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby JayS » 23 Apr 2018 17:15

chetak wrote:
In massaland even the Fedral reserve, equivalent to our RBI, is ia private entity


@JayS,

Is the head of the Fed appointed "privately"?? or otherwise?? Do tell.



Was that meant for katare..? He made the statement.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby chetak » 23 Apr 2018 17:28

JayS wrote:
chetak wrote:

@JayS,

Is the head of the Fed appointed "privately"?? or otherwise?? Do tell.



Was that meant for katare..? He made the statement.


Then let's hope that katare also reads it, no?? :)

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Katare » 23 Apr 2018 22:48

Jay/Chetak et al

We need to separate the issues or points to have a clean debate. Financial ownership structure of GSTN (which is public/private partnership in this case) is what I was commenting on. Grievances related to execution of GST and pain it has caused is another issue and I concur it could have been done better.

The model of private/public partnership with the majority nongovt shareholding was chosen to allow for more nimble management and tapping of talents from a wider pool, unfettered by govt rulebook on hiring/paying/firing and approvals. The other goal was to make the financial institutions a s direct stakeholder in the system.

The GSTN ownership is with companies that are mostly PSUs and public (non-promoter) companies with board members coming from multiple entities including Govt.

If the nation trusts these private sector banks with hundreds of billions of dollars of public money than we can also trust them with running a company in partnership with govt.

As far as foreign shareholding of Banks like ICICI and Axis banks goes, most CT folks comment on the issue in colorful language without understanding the differences in how the shareholding and voting rights work for the Banks. Anyhow all Indian banks are directly governed by RBI and the board's power are limited by both govt and RBI oversights and legislations. RBI can even reject a CEO like it did for Axis bank.

All the ADR/GDR that banks issued in US/London are non-voting right shares as per RBI rules. The ADR holders does not have a say about anything. The holding bank votes for ADR holders but it has to vote as per the direction of the bank board. In other words the voting rights remains with the Board while financial ownership is transferred to foreigners.

RBI mandates that all member of bank boards and major executives have to be resident Indians.

ICICI and Axis banks are both pseudo-govt banks anyhow and Indian Govt still nominates one of the board members. This is the reason that these two are the rotten apple in the basket of the private sector banks. Rest of the banks including the largest private bank, i.e. HDFC, have NPAs in 1 to 2% range.

Jay,
How can a govt fund a private company? It would be illegal, funds come from equity or debt there is no other source for them. Many time govt forms a company on the paper and transfers it to the private sector for running because it is faster and more efficient. This does not mean public money was wasted or given to a private entity without getting equity in return. If you have evidence to contrary I would like to see it.

Mort,
Federal reserve as per their own website is a public/private partnership.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Mort Walker » 24 Apr 2018 08:33

Katare wrote:
Mort,
Federal reserve as per their own website is a public/private partnership.


No sir. It is not.

Who Owns the US Federal Reserve?

Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations. For instance, each of the 12 Reserve Banks operates within its own particular geographic area, or District, of the United States, and each is separately incorporated and has its own board of directors. Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. In fact, the Reserve Banks are required by law to transfer net earnings to the U.S. Treasury, after providing for all necessary expenses of the Reserve Banks, legally required dividend payments, and maintaining a limited balance in a surplus fund.


The 12 directors of the federal reserve are US government employees.

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Re: GST - Discussion on all aspects.

Postby Katare » 24 Apr 2018 08:57

Fine believe what you want to or consider to be truth.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 24 Apr 2018 10:01

Katare wrote:Fine believe what you want to or consider to be truth.


The link I posted came from the Federal Reserve itself!

The larger issue here is that unlike India, the US does not have public sector banks, of course not including the two Federal Home Loan Mortgage corporations and the US Export/Import Bank. The banks are private. It is the Federal Reserve that directs the US Treasury Department to release currency to the private banks. The US Treasury does not have the authority to distribute currency to the public, but does have the authority to collect taxes from individuals and corporations. The US Federal Reserve IS a federal/central system and has functions much like the RBI. Various politicians over the years have talked about abolishing the US Federal Reserve system as it interferes in policy.

Please don't resort to pouting!

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby JayS » 24 Apr 2018 11:12

Katare wrote:Jay,
How can a govt fund a private company? It would be illegal, funds come from equity or debt there is no other source for them. Many time govt forms a company on the paper and transfers it to the private sector for running because it is faster and more efficient. This does not mean public money was wasted or given to a private entity without getting equity in return. If you have evidence to contrary I would like to see it.


My comment is based on the statement in one of the news article posted by Chetak:

The Finance Ministry has allotted more Rs.5000 crores to GSTN to develop software through Infosys and still, the software is not working properly. The 51 percent shareholders in GSTN are ICICI Bank, HDFC, HDFC Bank, LIC Housing Finance and an NSE subsidiary… These firms have not yet put a single paisa in GSTN[9].


Who is exactly funding GST system development, GOI or GSTN..? From the article it looks like its GOI.

Also I wonder on what basis these particular companies are chosen. Was there any RFP or something to invite bids for partnership in GSTN..? I am sure other pvt companies would also be interested in participating GSTN. Its a good steady business with assured growth.

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Re: GST - Discussion on all aspects.

Postby Katare » 24 Apr 2018 18:47

JayS,
I just looked it up, the GSTN is a not for profit, section 8 entity. It’s purpose seems to manage the IT backbone for GoI. Since there is no profit/return for the private sector investors and all the tax revenue goes to government, GoI is footing the bill.

Also, it is my opinion, take it for whatever it’s worth to you but i think although PGurus type websites can sometimes be very helpful but they are mostly a dig for CT folks.

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Re: GST - Discussion on all aspects.

Postby JTull » 24 Apr 2018 18:55

I think there's a fundamental misunderstanding that equity == funding.

Initial Paid-up equity is Rs 10 crore only and these banks have paid these tiny amounts to be shareholders.

Further details on finances here.

https://www.gstn.org/about-us/

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Re: GST - Discussion on all aspects.

Postby Suraj » 28 Apr 2018 23:30

GST collection in first 9 months of its roll out at Rs 7.41 trillion
Goods and services tax (GST) collection in the first nine months of its roll out during 2017-18 stood at Rs 7.41 trillion, even as average monthly collection turned out lower than initial targets of the government.

The monthly average was Rs 890 billion, against the targeted Rs 920 billion. However, very close to the FY18 Revised Estimates (RE) of the Union Budget. GST was enforced from July 1.

The figures issued by the government on Friday comprised Central GST (CGST) and State GST (SGST) for August-March 2017-18 and integrated GST (IGST) and compensation cess for July-March.

"During 2017-18, total revenue collected was Rs 7.19 trillion," the finance ministry said. If one adds the cess and IGST collection for July, the total stood at Rs 7.41 trillion.

Revised Estimates in the Budget pegged collection at Rs 4.44 trillion. Actuals released by the government on Friday showed the Centre's collections at Rs 4.5 trillion.

The government has achieved the RE target on indirect tax collection for 2017-18, an official said.

Image

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Re: GST - Discussion on all aspects.

Postby Vips » 01 May 2018 18:13

In a first, GST revenue collection for a month exceeds Rs 1 lakh crore.

The revenue collection from Goods and Services Tax (GST) exceeded Rs 1 lakh crore in April 2018, the Ministry of Finance said on Tuesday. This is the first occasion that the monthly revenue has breached the Rs 1 trillion milestone.

News agency ANI reported that the gross GST revenue collected in April 2018 came at Rs 1,03,458 crore of which Central GST (CGST) is Rs 18,652 crore and State GST (SGST) is Rs 25,704 crore. The Integrated GST (IGST) came at Rs 50,548 crore while cess accounted for Rs 8,554 crore. Finance minister Arun Jaitley congratulated various stakeholders + hailing the record GST collection as "a landmark achievement and a confirmation of increased economic activity". I would like to congratulate all taxpayers, Hon’ble Members of the GST Council, State and Central Government tax administration for this achievement," he tweeted.

The finance ministry echoed Jaitley's sentiments, "The buoyancy in the tax revenue of GST reflects the upswing in the economy and better compliance". Out of 87.12 lakh taxpayers, 60.47 lakh filed GSTR-3B, resulting in 69.5 per cent compliance," it tweeted via its official handle.
April was also the month for filing of quarterly return for composition dealers.Out of 19.31 lakh composition dealers,11.47 lakh filed their quarterly return(GSTR 4) , a 59.40 per cent compliance and paid Rs 579 crores as GST.

The spike in GST revenue may also be linked to the roll out of e-way bills which was touted as a major anti-evasion measure.

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Re: GST - Discussion on all aspects.

Postby Suraj » 01 May 2018 22:02

A lot of GST growing pains can be attributed to lack of understanding of how to use it properly, particularly considering many simply avoided paying taxes altogether in the past.
Many companies in India don’t understand the country’s largest tax reform
According to a recent survey of these businesses by Wydr, India’s largest mobile-based wholesale marketplace, 57% of the respondents said they don’t fully understand how the GST works—and nearly one in five said they still do not understand the tax policy at all.

A total of 130 businesses across India were surveyed by Wydr about how the GST regime has impacted them.

“The scale of implementation for the GST is unprecedented anywhere in the world, which naturally leads to some challenges and teething trouble in the first few months,” Devesh Rai, founder and CEO of Wydr, said. “…even though significant progress has been made in GST rollout, the administration needs to enhance its focus on educating small and medium business owners across India.”

The tax reform shook up everyone, from luxury carmakers and the banarasi sari industry to the Rs100,000 crore wedding industry. And, across the board, the smallest players have faced the biggest hurdles.

Though the GST was meant to put an end to a cascading and complex tax structure, nearly a third of the respondents don’t believe it simplified anything. What’s more, confused retailers and manufacturers don’t know how to seek guidance. Over 55% haven’t been able to get GST-related help easily.

Though its implementation hasn’t been smooth, “the government is working towards minimising the issues,” Rai said. “It has not even been a year since the tax system has been implemented and considering the scale of implementation, I think we are much better off.”

Businesses, too, are hopeful, with 45% saying the GST will be good in the long run. Over half also said that they believe the resultant uniformity will make one aspect of business easier—expanding to other states.

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Re: GST - Discussion on all aspects.

Postby Mukesh.Kumar » 02 May 2018 00:54

Suraj wrote:A lot of GST growing pains can be attributed to lack of understanding of how to use it properly, particularly considering many simply avoided paying taxes altogether in the past.
Many companies in India don’t understand the country’s largest tax reform
According to a recent survey of these businesses by Wydr, India’s largest mobile-based wholesale marketplace, 57% of the respondents said they don’t fully understand how the GST works—and nearly one in five said they still do not understand the tax policy at all.

A total of 130 businesses across India were surveyed by Wydr about how the GST regime has impacted them.

“The scale of implementation for the GST is unprecedented anywhere in the world, which naturally leads to some challenges and teething trouble in the first few months,” Devesh Rai, founder and CEO of Wydr, said. “…even though significant progress has been made in GST rollout, the administration needs to enhance its focus on educating small and medium business owners across India.”

The tax reform shook up everyone, from luxury carmakers and the banarasi sari industry to the Rs100,000 crore wedding industry. And, across the board, the smallest players have faced the biggest hurdles.

Though the GST was meant to put an end to a cascading and complex tax structure, nearly a third of the respondents don’t believe it simplified anything. What’s more, confused retailers and manufacturers don’t know how to seek guidance. Over 55% haven’t been able to get GST-related help easily.

Though its implementation hasn’t been smooth, “the government is working towards minimising the issues,” Rai said. “It has not even been a year since the tax system has been implemented and considering the scale of implementation, I think we are much better off.”

Businesses, too, are hopeful, with 45% saying the GST will be good in the long run. Over half also said that they believe the resultant uniformity will make one aspect of business easier—expanding to other states.



I guess it's too small a sample and that too skewed towards small businesses. But FWIW a good data point.

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Re: GST - Discussion on all aspects.

Postby Suraj » 02 May 2018 01:06

Yes the sample size is small. However they do focus on small businesses, who have a relatively higher cost of compliance. They're also the largest in number. The small sample size may still be ok if variance is low, which is likely if the nature of the concerns are consistent and predictable. That also makes the solutions more straightforward to implement and apply.

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Re: GST - Discussion on all aspects.

Postby chetak » 05 May 2018 13:52

There is no indication of which banks will be used to deposit the GST accruals or is the existing arrangement of using private banks to continue undisturbed??

All the high paid "staff" and the GSTN Board appointed by the private banks and other erstwhile shareholders are to continue for a period of five years.

Someone should file a request for details on their salary and perks, which are anyway being paid for from public funds.



At last, Government acquires 100% shares in GSTN by kicking out all tax money eating private players


At last, Government acquires 100% shares in GSTN by kicking out all tax money eating private players

By Team PGurus - May 5, 2018

Modi has correctly re-organized the corporate structure of GSTN to make it completely Government owned

Modi’s government took corrective measures[1] to fully acquire the Goods and Services Tax’s administration firm Goods and Services Tax Network (GSTN) by avoiding all the private players inducted by the former tainted Finance Minister P Chidambaram. Friday’s GST Council meet has officially declared that 51 percent shareholding by private bankers and dubious stock brokers consortium would be avoided from the strategic tax collection firm GSTN and it is made as a 50:50 partnership between the Centre and the State Governments.
....................

On Swamy’s complaints, Prime Minister had ordered Intelligence Bureau probe on how private banks and firms were allowed in GSTN and found that there was no security clearance received from Union Home Ministry. GSTN was floated by Chidambaram in March 2013 with 51 percent private banks. It is still a wonder, how Chidambaram dubiously floated a private firm in 2013 when GST Acts were passed only in 2016.

“Presently, the Central Government and State Government are holding 24.5% equity shares respectively and the remaining 51% are held by non-Governmental institutions and through various mechanisms, GSTN is under strategic control of government[3]. Majority of the GST processes including registration, the filing of returns, payment of taxes, processing of refunds is IT driven and GSTN is handling large-scale invoice level data of lakhs of business entities including data relating to exports and imports. Considering the nature of ‘state’ function performed by GSTN, Council felt that GSTN be converted into be a fully owned government Company.

*In view of the above, GST Council in its meeting held today decided:*

Acquisition of entire 51% of equity held by the Non-Governmental Institutions in GSTN amounting to Rs. 5.1 crore, equally by the Centre and the States governments and allow GSTN Board to initiate the process for acquisition of equity held by the private Companies; and

GSTN Board shall be allowed to continue the existing staff at existing terms and conditions for a period up to five years, and shall have the flexibility of hiring people through a contract on the terms and conditions similar to those used by GSTN till now while hiring regular employees. The existing financial commitments given by Centre and States to GSTN to share the capital and O&M cost of the IT Systems shall continue,” said the press statement issued by Finance Ministry after the May 4th GST Council Meet.

Finance Ministry has made several controversial moves by allowing Infosys to undertake the software and networking of GSTN. Though more than Rs.5000 crores was pumped to Infosys[4] from GSTN, the software and networking are still in a state of chaos[5]. Jaitley and Adhia even made secret notes to disallow the Comptroller and Auditor General (CAG) from auditing GSTN[6] and even made an order that GSTN would not come under General Financial Rules (GFR). This was a dubious move to avoid Union Cabinet clearances to pump money into GSTN and give to private vendors like Infosys.

Now, after Prime Minister Narendra Modi’s intervention, GSTN has become a full government entity and Government should take back all tax collection money deposited in private banks like the ICICI and HDFC and deposit it in a Public Sector Bank.

Prime Minister should look to flush out the crooked people in Finance Ministry responsible for much of this chaos for the past four years


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Re: GST - Discussion on all aspects.

Postby Mort Walker » 05 May 2018 22:37

Now, after Prime Minister Narendra Modi’s intervention, GSTN has become a full government entity and Government should take back all tax collection money deposited in private banks like the ICICI and HDFC and deposit it in a Public Sector Bank.

Prime Minister should look to flush out the crooked people in Finance Ministry responsible for much of this chaos for the past four years.


Good job. Tax collection is inherently a governmental function.

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Re: GST - Discussion on all aspects.

Postby Manish_P » 21 May 2018 16:08

Biggest GST Fraud Unveiled: Mumbai Firm Siphoned Off Rs 173 Crore Using Fake Invoices!

Rs 173 crore was syphoned off using fake GST invoices, by a Mumbai based firm. Owners have been arrested.

Mumbai based Horizon Outsource Solutions Private Limited was successful in claiming GST Credit worth Rs 80 crore from the Income Tax Dept., without paying a single penny in tax.

Since July 2017, this company was showing fake invoices of software services rendered by Asad Anwar Sayed of Best Computer Solutions Private Limited. There was no software service provided, and the invoices were never paid.

Besides, Horizon Outsource also gave fake invoices which showed Rs 47 crore as GST paid.

Amit Upadhyaya, owner of Horizon Outsource Solutions Private Limited has been arrested by The Directorate General of Goods and Services Tax Intelligence (DGGSTI).



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Re: GST - Discussion on all aspects.

Postby nam » 21 May 2018 16:35

Since July 2017, this company was showing fake invoices of software services rendered by Asad Anwar Sayed of Best Computer Solutions Private Limited. There was no software service provided, and the invoices were never paid.

Besides, Horizon Outsource also gave fake invoices which showed Rs 47 crore as GST paid.


For a company claiming to work in the Information technology domain, don't seem to realise data is the core of their business.. so is for GST.

Stunts like these will be caught where a bit of data analytics is run...

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Re: GST - Discussion on all aspects.

Postby JayS » 21 May 2018 17:18

Manish_P wrote:Biggest GST Fraud Unveiled: Mumbai Firm Siphoned Off Rs 173 Crore Using Fake Invoices!

Rs 173 crore was syphoned off using fake GST invoices, by a Mumbai based firm. Owners have been arrested.

Mumbai based Horizon Outsource Solutions Private Limited was successful in claiming GST Credit worth Rs 80 crore from the Income Tax Dept., without paying a single penny in tax.

Since July 2017, this company was showing fake invoices of software services rendered by Asad Anwar Sayed of Best Computer Solutions Private Limited. There was no software service provided, and the invoices were never paid.

Besides, Horizon Outsource also gave fake invoices which showed Rs 47 crore as GST paid.

Amit Upadhyaya, owner of Horizon Outsource Solutions Private Limited has been arrested by The Directorate General of Goods and Services Tax Intelligence (DGGSTI).




The numbers seem out of sync. 173Cr and then 80Cr and then 47Cr. Which one is actual amount..? Also what does syphoning off means here..? They never paid the tax but got tax credit for GST..? Or they got actual refund of that much amount..? How exactly GSTN gave GST credit without verifying the both seller and buyer side receipts and actual payment of tax money..? Aren't they suppose to cross verify seller and buyer side claims..? Any biz which is paying even a few thousand rupee GST, is bound to claim the credit.

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Re: GST - Discussion on all aspects.

Postby Suraj » 21 May 2018 20:59

GST doesn’t mean there will be no tax fraud . But it’s rather easy to catch it quickly . It’s simply a matter of who first notices that the numbers are not adding up .

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Re: GST - Discussion on all aspects.

Postby Gus » 21 May 2018 21:55

pre-GST plenty of scamming was done in export credits and all sort of evasion using under and over invoicing etc.

it will be attempted now too, but as suraj says - easy to spot.

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Re: GST - Discussion on all aspects.

Postby Suraj » 21 May 2018 22:26

There's no shortage of scammers :) The problem for them is that GST is self regulating. Except for terminal ones, everyone's credit is someone else's tax liability. Due to the rolling window of incoming records, there'll be a few months' lag in establishing that something doesn't line up.

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Re: GST - Discussion on all aspects.

Postby Supratik » 01 Jun 2018 22:27


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Re: Indian Economy News & Discussion - Nov 27 2017

Postby JTull » 02 Jun 2018 01:40

Katare wrote:All the ADR/GDR that banks issued in US/London are non-voting right shares as per RBI rules. The ADR holders does not have a say about anything. The holding bank votes for ADR holders but it has to vote as per the direction of the bank board. In other words the voting rights remains with the Board while financial ownership is transferred to foreigners.


That doesn't protect the management from lawsuits. Many activist investors look for precisely that arbitrage in regulations.

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Re: GST - Discussion on all aspects.

Postby Katare » 03 Jun 2018 07:40

What is your point?

What is arbitrage in regulation?

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Re: GST - Discussion on all aspects.

Postby JohnTitor » 05 Jun 2018 13:46

^^ Authority without accountability? Management can do what they want but don't need to worry about the consequences

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Re: GST - Discussion on all aspects.

Postby JTull » 05 Jun 2018 14:44

Katare wrote:What is your point?

What is arbitrage in regulation?


This is OT, but...

In the case of ADRs, listing regulations in US must be adhered. If there's any perceived negligence on part of management or supervisory board, lawsuits will be filed in US where the courts will be favourable to give out summary judgements in favour of US investors. Domestic Indian regulations such as on voting rights will have no bearing on this. Management may also find themselves being personally targeted by civil and criminal lawsuits.

GDRs have different issues based on domicile.

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Re: GST - Discussion on all aspects.

Postby Katare » 05 Jun 2018 22:45

That is correct and that is the way it should be. People who put their hard earned money in your hand should have recourse to hold people handling that money. But I do not think it'll present a systematic risk to Indian financial world. The right of shareholders, in unlikely case where disclosers were not sufficient, can be eliminated by the bank by filing for a bankruptcy. Company is an independent entity that sells shares to foreigners so no individual can be held accountable personally. Any criminal negligence suit can only be brought against Indian individuals in India where that fraud has taken place. If one of their employee commits that fraud in US or Europe they'll go to jail there no doubt.

Although the risk for a diversified global company is manifold than a totally Indian company but the rewards are also manifold. Every dollar raised by these companies by selling shares allows them to provide loans of $5-$10 in India besides adding permanent foreign currency to Indian reserves.

Anyhow I was explaining to people who thought that since most of the shareholding of ICICI and Axis banks are with foreigners some hidden hand must be controlling them for some ulterior motives. That is not correct, there is no way foreigners can do that by owning shares. Also if you read the filing documents of ICICI bank (the ADR I have owned for last 15 years) it clearly says in risk section that all bets are off if RBI or GoI passes any law restricting their rights or changes regulatory framework.

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Re: GST - Discussion on all aspects.

Postby JTull » 06 Jun 2018 01:47

Katare wrote:The right of shareholders, in unlikely case where disclosers were not sufficient, can be eliminated by the bank by filing for a bankruptcy. Company is an independent entity that sells shares to foreigners so no individual can be held accountable personally. Any criminal negligence suit can only be brought against Indian individuals in India where that fraud has taken place. If one of their employee commits that fraud in US or Europe they'll go to jail there no doubt.


Wherever negligence may be, if a US investor is deemed to have lost cash then the fraud will be deemed to be under US jurisdiction. This is unrelated to the "change in regulations" argument but tied to listing rules. Mistakes by insiders, even negligence, come with high risks.

If Kochar gets fired for her husband's dealings, you better be party to the class action suit that'll inevitably come.

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Re: GST - Discussion on all aspects.

Postby Rahul M » 06 Jun 2018 07:56

just talked to someone who has ~35 years of experience as a commercial tax collector, retiring at a senior level. He is very happy with GST because he feels that finally, the corruption by taxmen will come down since the automation has reduced much of the opportunity for bribes. Also, manpower requirement should also go down in state govt. commercial tax departments.

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Re: GST - Discussion on all aspects.

Postby Katare » 06 Jun 2018 08:58

JTull wrote:
Katare wrote:The right of shareholders, in unlikely case where disclosers were not sufficient, can be eliminated by the bank by filing for a bankruptcy. Company is an independent entity that sells shares to foreigners so no individual can be held accountable personally. Any criminal negligence suit can only be brought against Indian individuals in India where that fraud has taken place. If one of their employee commits that fraud in US or Europe they'll go to jail there no doubt.


Wherever negligence may be, if a US investor is deemed to have lost cash then the fraud will be deemed to be under US jurisdiction. This is unrelated to the "change in regulations" argument but tied to listing rules. Mistakes by insiders, even negligence, come with high risks.

If Kochar gets fired for her husband's dealings, you better be party to the class action suit that'll inevitably come.


It does not work that way but still if a class action law suits is brought against a fraudulent bank in India or US what is wrong in it? I

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Re: GST - Discussion on all aspects.

Postby Katare » 06 Jun 2018 09:06

JTull wrote:
Katare wrote:The right of shareholders, in unlikely case where disclosers were not sufficient, can be eliminated by the bank by filing for a bankruptcy. Company is an independent entity that sells shares to foreigners so no individual can be held accountable personally. Any criminal negligence suit can only be brought against Indian individuals in India where that fraud has taken place. If one of their employee commits that fraud in US or Europe they'll go to jail there no doubt.


Wherever negligence may be, if a US investor is deemed to have lost cash then the fraud will be deemed to be under US jurisdiction. This is unrelated to the "change in regulations" argument but tied to listing rules. Mistakes by insiders, even negligence, come with high risks.

If Kochar gets fired for her husband's dealings, you better be party to the class action suit that'll inevitably come.


It does not work that way but still if a class action law suits is brought against a fraudulent bank in India or US what is wrong in it? I would love to file asuit against ICICI and be compensated if they were purporting fraud on my money. Happens all the time Infy just settled with SEC, wellsfargo just paid $5.0B in fines. If anything it’s a good deterrent against unethical behavior. Anyhow so far in over two decades experience of a dozen Infian banks none have experienced anything that warrants any serious suspicion. It is in USA’s interest to treat everyone fairly or companies would move to EU or Singapore or Japan and even China.

JTull
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Re: GST - Discussion on all aspects.

Postby JTull » 06 Jun 2018 14:32

Katare wrote:As far as foreign shareholding of Banks like ICICI and Axis banks goes, most CT folks comment on the issue in colorful language without understanding the differences in how the shareholding and voting rights work for the Banks. Anyhow all Indian banks are directly governed by RBI and the board's power are limited by both govt and RBI oversights and legislations. RBI can even reject a CEO like it did for Axis bank.

All the ADR/GDR that banks issued in US/London are non-voting right shares as per RBI rules. The ADR holders does not have a say about anything. The holding bank votes for ADR holders but it has to vote as per the direction of the bank board. In other words the voting rights remains with the Board while financial ownership is transferred to foreigners.


Katare wrote:It does not work that way but still if a class action law suits is brought against a fraudulent bank in India or US what is wrong in it? I would love to file asuit against ICICI and be compensated if they were purporting fraud on my money. Happens all the time Infy just settled with SEC, wellsfargo just paid $5.0B in fines. If anything it’s a good deterrent against unethical behavior. Anyhow so far in over two decades experience of a dozen Infian banks none have experienced anything that warrants any serious suspicion. It is in USA’s interest to treat everyone fairly or companies would move to EU or Singapore or Japan and even China.


I'm bit confused here. On one hand you're arguing that ADR holders cannot take any action against Indian banks issuing them and "only" RBI can "govern" them. Then you go on to disagree when I say that there are few different ways to file suits against them in US due to local listing regulations esp. when financial losses are caused due to negligence or fraud. Now you seem to be saying that it happens all the time.

Aditya_V
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Re: GST - Discussion on all aspects.

Postby Aditya_V » 06 Jun 2018 19:09

I would go against the trend here. USA has been very friendly in Satyam scam since YSR,PWC and Congies were involved. And with miltary danda plus clout US has the world is not doo free for companies to easily walk out of the US.

Katare
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Re: GST - Discussion on all aspects.

Postby Katare » 06 Jun 2018 22:34

We are talking two different things. Foreign stake holders have no say or influence on bank's Management control, policy decision of board or day to execution. They are simply not involved.

Only RBI has regulation power over banks.

If a fraud is committed in US, it'll come under US jurisdiction, if fraud is committed in India it'll be under Indian jurisdiction regardless of where the bank/company is headquartered. When Infy violated visa rules and was negligent on it's promises of disclosure to US shareholders they were fined just like any other US company. This has no influence on how GST is ran in India, which is where the discussion started.


What is the alternative? List in US, raise $5 billion and just run away and those shareholder should have no recourse? If the stock holders didn't have protection would they give $5 B to a foreign bank/company? If a Bangladeshi company raises $1B in BSE would you want to rely on Bangladeshi courts alone? Would Indian investors buy a Bangla stock?

Our banks need to go out and spread all over the world, compete with the best and learn from the best and support Indian companies in their global expansions. Indian banking sector (mostly government owned and under draconian regulations of RBI) is very well sheltered from global currents.

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Re: GST - Discussion on all aspects.

Postby SBajwa » 07 Jun 2018 00:43

http://www.tribuneindia.com/news/punjab ... 00822.html

Can 100 tonnes of iron scrap be transported all the way from Agra to Fatehgarh Sahib on a scooter? While looking for an answer to this question, the Punjab Excise and Taxation Department unearthed a fake GST bill scam worth Rs 200 crore.

A Fatehgarh Sahib-based company, Maa Chintpurni Alloys, reportedly mentioned the vehicle registration number of a scooter in the GST bill given to another firm. Though the firm showed that the scrap was transported on a truck, the registration number was found to be that of a scooter. This exposed the scam in the three steel towns of the state — Fatehgarh Sahib, Mandi Gobindgarh and Ludhiana.

Sources in the Excise and Taxation Department told The Tribune that Maa Chintpurni Alloys and Shree Pawan Enterprises were found involved in supplying fake GST bills to steel furnaces without actually supplying any goods to them.

It is estimated that the two companies have supplied fake bills worth Rs 100 crore each and evaded tax of Rs 18 crore each (Rs 36 crore in all). “We have already cancelled the GST Identification Numbers of these two companies. We have also written to the Fatehgarh Sahib SSP for registering an FIR against them,” a senior officer said.

This is the second such scam in the state ever since the GST was rolled out in July last year. The earlier scam was unearthed in Ludhiana in January. Unscrupulous dealers were buying GST bills for goods that attract low tax from small retailers and then selling them to big companies so as to enable them to claim input tax credit; allow movement of “unaccounted” goods to other states; and, justify unrecorded transactions.

Excise officials say since they are now scanning all GST returns filed in Punjab, they have been able to detect such frauds. “Our probe has revealed that the purchase and sale of fake GST bills, involving large amounts, is rampant in hosiery and readymade garments businesses, besides iron and steel industry,” said a senior official. He said efforts were being made to trace the companies that purchased fake GST bills.

Vivek Pratap Singh, Excise and Taxation Commissioner, told The Tribune that they had started a drive to plug loopholes in the GST tax collection. “Since we are short of the total expected revenue from the GST, we are strictly monitoring any evasion. We are scanning the GST returns, which is helping us detect such frauds,” he said.

Modus operandi

Two Fatehgarh Sahib-based companies sold GST bills to steel furnaces without actually supplying any iron scrap to them.
The furnaces already have stockpiles of scrap, obtained without bills.
Though iron and steel attracts 18 % GST, these furnaces are suspected to have bought the bills by paying 9 % (in cash) to the two companies.

JTull
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Re: GST - Discussion on all aspects.

Postby JTull » 07 Jun 2018 01:33

Katare, I'll pass up on a response.

Suraj
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Re: GST - Discussion on all aspects.

Postby Suraj » 07 Jun 2018 01:57

All these idiots fudging with a tax system that depends on a paper trail with at least two counterparties, need to realize they'll ultimately end up being caught because of ... the paper trail. You can only hide when there's no trail . Once an anomaly is detected, it's simply a matter of reading off the names of those involved and sending pulis their way.

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Re: GST - Discussion on all aspects.

Postby Yagnasri » 07 Jun 2018 10:47

The common business person is India will believe if someone tells him/her that GST can be manipulated. Reason - that is what they were all doing for decades. Leaving records for verification purpose is not something they will consider as a threat as they do not understand the concept most of the times. Those understand also may feel that they can bribe baboons.

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Re: GST - Discussion on all aspects.

Postby Kashi » 07 Jun 2018 11:09

Yagnasri wrote:The common business person is India will believe if someone tells him/her that GST can be manipulated. Reason - that is what they were all doing for decades. Leaving records for verification purpose is not something they will consider as a threat as they do not understand the concept most of the times. Those understand also may feel that they can bribe baboons.


And that is still happening. Babus will not stop taking bribes just because GST has been implemented. For example there's an article that recently appeared in Swarajya about truckers feeling happy with GST. One bit caught my eye.

https://swarajyamag.com/economy/with-co ... it-so-good

Once (before July 2017 ) a checkpost inspector asked for 10 eggs that I was transporting. I told him that I cannot give since I had to account for each and every egg in my truck. So he inserted a sharp rod in the consignment that damaged an entire tray of eggs saying he wanted to make sure the consignment contained eggs. Then, he added I would learn a lesson now,” Anbazhagan recalls.


The extortionists err... the inspectors still have leeway when it comes to inspecting the trucks and they still seem adamant on extracting a baksheesh for their efforts. An ecosystem setup over 100 years will not dismantled overnight. This is but one example.

GST is a step in the right direction, but it will be a long long haul before the businessmen in this country become "honest taxpayers" and revenue officials "honest and impartial" overseers of revenue gathering.


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