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A spoonful of policy change: Why a lower tax slab for ghee under GST 2.0 is good for hearts, homes, and farmers

As an increasing number of people seek to adopt healthier lifestyles, essential ingredients such as ghee are once again becoming staples of many diets. A recent report by market intelligence firm iMARC Group suggests that India’s per capita ghee consumption is expected to increase to 4.07 kg by 2034, up from 3.27 kg in 2024 and 2.68 kg in 2014. This growth can be attributed to the rising demand driven by cultural significance and an increasing awareness of its health benefits. India’s ghee market is projected to reach Rs 6.93 lakh crore by 2032, from Rs 3.2 lakh crore in 2023.India needs to recognise a simple yet crucial truth about its diets, asserts Dr Sachin Shah, Director of Neonatal and Paediatric Intensive Care Services at Surya Hospitals in Pune. “Ghee is a healthier staple compared to refined oils and butter. According to research published in the Journal of Food Science and Technology— the official publication of the Association of Food Scientists and Technologists of India—improves nutrient absorption, strengthens the immune system, and contains essential vitamins A, D, E, and K. It helps with energy production, digestion, and brain development in kids. Ghee, when used moderately, can be an ally in the fight against lifestyle diseases by providing protection,” Shah says. He adds that traditional Indian diets recognised this wisdom centuries ago, but in the rush toward so-called ‘modern’ cooking oils, we lost touch with the benefits of ghee. “Unlike refined seed oils linked to inflammation and heart risks, ghee provides nutrients the body can absorb and use effectively,” says Shahida Chaudhary, a former senior dietitian at Moolchand Hospital, echoing this view. “For the average household, a spoon of ghee can improve satiety, boost immunity—and even aid heart health when taken in moderation.” It is this very nutritional value of ghee, experts argue, that makes its affordability a matter of public health concern. In recent times, ghee prices have gone up due to an increase in milk prices and growing demand, apart from the high GST. Experts contend that if healthier fats like ghee are kept out of reach because of high taxes, people will continue to fall back on cheaper, less safe oils.Industry observers suggest that making ghee more affordable could involve reducing its GST burden, as consuming ghee is not a luxury but rather a matter of preventive health. “If millions of families are priced out of healthier options, they will turn to harmful substitutes,” says Chaudhary. “Lowering GST on ghee is a health investment for the country, not just a tax tweak.”

Live Events Prime Minister Narendra Modi on August 15, 2025, made a big announcement regarding the GST structure in the country, aimed at reducing taxes on daily-use items. “The government will bring Next Generation GST reforms, which will bring down the tax burden on the common man. It will be a Diwali gift for you,” he states.With both health experts and industry voices aligned, along with PM Modi’s announcement, the call for lowering GST on essentials like ghee has intensified. This change would not only provide tangible relief to households but also support the industry. Citing both public health benefits and sound economic logic, dairy leaders, policy experts, and cooperatives are advocating a 5% GST on ghee—similar to the tax applied to curd, buttermilk, and edible oils. An expert in the health sector and advisor at the National Health Systems Resource Centre, Dr K. Madan Gopal, calls a lower GST a “sound economic and public health move.”Under the GST regime, ghee and butter are subject to 12% tax, whereas curd and buttermilk are taxed at a rate of 5%. “While historically consistent, today it contrasts sharply with nutritional and policy logic,” says Pankaj Jain, Indirect Tax Partner at EY.India’s dairy sector supports over 80 million smallholder households, and more affordable ghee would “directly improve nutrition, raise real incomes, and reduce informal trade,” Gopal observes. Currently, only about 15% of the ghee market is formal, leaving the rest vulnerable to adulteration and tax evasion, he informs. “A 5% GST is not just a tax adjustment; it is a timely correction that benefits farmers, consumers, and public health alike,” he argues.

iStockEdible oil like Palm oil is taxed at a much lower 5% under GST. Notably, supporters of this idea contend that a 5% GST would boost affordability, reduce counterfeits, encourage innovation, and increase rural incomes—without denting revenue, as higher formal consumption could expand the tax base. Ravin Saluja, Director of Sterling Agro Industries, the parent company of Nova Dairy, believes that the GST cut could lift sales by 20-25% and raise farmer incomes by Rs 2-2.5 per litre. Similarly, Sandeep Aggarwal, Director of SMC Foods, projects a revenue increase of at least 25% along with better plant utilisation.Additionally, R.S. Sodhi, Chairman of the India Dairy Association, cautions about the increasing issue of adulteration. He says that aligning ghee and butter with lower-taxed essentials will improve compliance, curb unsafe substitutes, and unlock growth in a sector vital to both farmer prosperity and national nutritional security.Following PM Modi’s announcement, the GST Council is set to meet on September 3 and 4 to decide on reducing tax levies on various goods and services. Sources indicate that the 5% slab is being considered for all food and textile products. A tale of two tax slabs, counterfeits & public health risks For mid-sized processors, the rate gap is punishing, believe dairy players. Saluja says the 12% GST directly impacts 85% of his ghee and butter portfolio, raising consumer prices by 8-10% and cutting margins by 3-5%. “The disparity has shifted 15-20% of our rural consumers to cheaper edible oils, and we’ve seen a 200% surge in counterfeit ghee,” he notes.The 12% GST inflates ghee prices by around 7%, says Aggarwal. The high GST is also cited as a factor that stifles innovation in this critical sector. Saluja believes that it “restricts R&D for fortified products or eco-friendly packaging.” Lowering GST could also free up cash flows for supply chain improvements for dairy players, notes Aggarwal. The high GST has also bolstered the informal market, industry observers say. “GST had streamlined logistics and compliance in the dairy sector,” says Sodhi, “but the 12% rate on ghee significantly compresses margins for organised brands.” He explains that these brands face stiff competition from untaxed rural or informal alternatives, making it difficult for them to sustain competitive pricing.The public health perspective is also increasingly gaining attention as cases of adulteration continue to rise. “In rural and tier II-III regions, ghee is frequently replaced with palm oil or adulterated variants. High GST makes pure ghee less competitive and encourages consumers toward unsafe alternatives,” Sodhi says.Aligning ghee with the 5% GST slab, he argues, would encourage formal, branded supply chains and reduce the appeal of adulterated products. Impact on farmers and cooperatives The ghee market in India accounts for 25-30% of milk utilisation. Lowering the GST on ghee to 5% could increase farmer incomes by Rs 2-2.5 per litre, according to Saluja. It would “remove poverty levels” for many suppliers, believes Aggarwal, and for cooperatives, tax relief could be “transformative”.Devendra Shah, Chairman of Parag Milk Foods, a cooperative, agrees. He says that applying the 5% GST slab across the entire dairy product category will make quality, branded dairy more affordable while also enabling producers to raise procurement prices. “Over time, this can uplift rural livelihoods and ensure that growth in the organised dairy sector directly translates into a better quality of life for India’s farming families,” he adds.While the farmer case is indeed compelling, experts point out that India’s tax treatment of ghee also stands out on a global scale. Keeping dairy fats in a higher slab than refined oils not only negatively impacts rural livelihoods but also contradicts nutritional policy and international standards.

iStockA significant portion of the Indian ghee market continues to rely on informal and unregulated sources for raw materials. Global lessons, local urgency Globally, dairy fats are typically taxed at a lower rate. In the European Union, including France, Germany, and Austria, as well as in the US, essential dairy fats often carry lower or zero taxes. In the UK, for instance, milk, butter, and essential food items are subject to a zero rate of VAT.The EU’s lower VAT rates for butter highlight its nutritional value, while the UK’s zero-rating ensures affordability. In contrast, industry voices believe that India’s current GST structure, which treats ghee as a semi-luxury item rather than a dietary staple, sends the wrong signal.“Key economic drivers include fraud reduction through compliance, improved rural incomes through formal channels, and public health protection by reducing adulteration—these factors are critical,” Sodhi stresses.Notably, past attempts to secure a lower GST have faltered in the Council’s consensus-driven process. However, this time, industry insiders sense a convergence of economic logic, public health arguments, and political optics—illustrated by the upcoming Bihar election in a state deeply connected to dairy. “For once, the industry is united—from private processors to cooperatives to tax experts,” says Saluja.Former Finance Secretary Subhash Garg, adds : “The fact that so many people debate about such classifications shows the absurdity of making such distinctions between related products and too many rates. Merging 12% slab in 5% is good from the point of view of bringing necessary convergence of rates. A better alternative will be to raise 5% slab to 8% and allow input tax credits on all 5% slab goods which today don’t have the facility of input credit." He cautions, however, that political compulsions may drive short-term giveaways rather than long-term reform. “The Prime Minister has promised a big Diwali gift. That may translate into effective tax cuts, but it could also delay broader rationalisation.”The Department of Animal Husbandry & Dairying, the Department of Revenue, the Ministry of Finance, and the GST Council did not respond to emailed requests for comment till the time of publication of this story.Path Forward Given dairy’s role in everyday diets and rural employment, the GST Council’s call on ghee carries weight well beyond taxation. A lower rate, experts argue, could be cast as a win for farmers, consumers, and public health alike.Meanwhile, the Group of Ministers (GoM) on rate rationalisation has backed the Centre’s proposal to move to a simplified two-rate GST structure of 5% and 18%, scrapping the existing 12% and 28% slabs. The recommendation, confirmed by GoM chair and Bihar Deputy CM Samrat Choudhary on August 21, 2025, will now go to the GST Council, set to meet on September 3 and 4, for approval. If cleared, the government's “next-gen” GST regime could be rolled out before Diwali, providing relief to the middle class, MSMEs, and farmers.Experts say the GST Council may, this time, seek data-backed projections and possibly a phased approach. If ghee and butter move into the 5% slab, consumer prices may fall 6-10%; formal producers could see sales volumes rise by 20-25%; farmers may gain Rs 2-2.5 per litre; and adulterated ghee could lose ground.As Sodhi sums up: “This is a win-win. Consumers get affordability, farmers get better incomes, and the government gets more compliant tax flows. It’s time to bring fairness to one of India’s most cherished foods.” Add

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Tax cut bonanza cleared in GST regime overhaul | Latest News India

Taxes on goods spanning household essentials, medicines, small cars and appliances will be slashed from September 22 as the GST Council on Wednesday approved the most sweeping overhaul of India’s consumption tax since its 2017 launch, affecting everything from toothpaste and insurance to tractors and cement.

Union finance minister Nirmala Sitharaman addresses the media regarding the 56th GST Council meeting. (PTI) The changes, announced by Union finance minister Nirmala Sitharaman after a marathon meeting of the 56th GST Council, will have a net revenue implication of ₹48,000 crore based on 2023-24 consumption patterns but represent a gamble on growth by boosting domestic demand at a time when exports face headwinds from punishing US tariffs.

Chart More than 90% of goods across multiple categories will become cheaper as the government whittles down the GST structure from four slabs to essentially two main rates of 5% and 18%, with a special 40% levy reserved for luxury and sin goods. “The Prime Minister actually set the tone for the next-generation reforms on the 15th of August when he spoke from the Red Fort and he desired that we give the benefit to the people at the earliest,” Sitharaman said, concluding the meeting that was scheduled for two days but wrapped up in one with intense deliberations. In recent days, industry groups have announced they will pass on the benefits of these cuts immediately to consumers – a move that will be critical to the government’s goal of spurring consumption. Also Read | GST on small cars cut, some motorcycles get cheaper: Check new GST rates The minister said an item-wise “rigorous exercise” was undertaken and in most cases, tax rates were brought down drastically. “Labour intensive industry have been given support. Farmers and agriculture, as a whole, will also benefit by the decisions we’ve taken today. Health-related also will benefit. So, the key drivers of economy have been given a prominence,” Sitharaman said. The Council reached unanimous agreement on the reforms, with all states present and no absences. “At the end of the day, they said, we’re all together for the sake of the common man,” Sitharaman said, praising the spirit of cooperative federalism. After the cuts were approved on Wednesday, Prime Minister Narendra Modi said “the wide-ranging reforms will improve lives of our citizens and ensure ease of doing business for all, especially small traders and businesses.” However, several states, particularly those ruled by opposition parties, expressed reservations about revenue losses while supporting the rate cuts. Kerala finance minister KN Balagopal said states had asked for “some kind of compensation” to offset revenue shortfalls. Jammu and Kashmir chief minister Omar Abdullah warned the reforms could hit his region’s revenues by 10-12%, which he said was particularly concerning given the fiscal crisis following the Pahalgam terror attack. “The major sectors of the economy, like tourism, transport, construction, automobiles have come to standstill post April 2025,” he said in written remarks at the meeting. In contrast, BJP-ruled states and NDA allies backed the proposals strongly. Assam chief minister Himanta Biswa Sarma and Andhra Pradesh finance minister Payyavula Keshav from the Telugu Desam Party said the reforms would benefit all stakeholders. “As an alliance partner, we are supporting the Centre’s proposal of GST rate rationalisation. It is in favour of the common man,” Keshav said. Major relief for households Sitharaman said the changes represented complete reduction “for common man and middle-class”. This reform is not just about rationalising rates. It’s also on structural reforms. It’s also about ease of living, so that businesses can conduct their operations with the GST with great ease,” Sitharaman said. Among the key changes was accepting the long-pending demand to cut GST on insurance. The council exempted the levy entirely on all individual life insurance policies—including term life, ULIP and endowment policies—and all individual health insurance policies, including family floater and senior citizen plans. The reforms also span the agriculture sector with farming equipment seeing rate cuts. Sin goods face higher taxes However, the Council also approved a higher 40% tax on “super luxury” and “sin” goods including cigarettes, mid-sized and luxury cars, and carbonated beverages, replacing the current compensation cess structure. Structural improvements The finance minister emphasised the comprehensive nature of the reforms: “We have corrected inverted duty structure problems, we’ve resolved classification-related issues, and we’ve ensured that there will be stability and predictability about the GST. We’ve reduced the slabs. There shall be only two slabs, and we are also addressing the issues of compensation, ease of living, simplifying registration, return filing and refunds.” Beyond rate cuts, the Council approved significant administrative improvements, including operationalisation of the GST Appellate Tribunal to accept appeals by end-September and commence hearings by December. The reforms take effect from September 22, delivering on Modi’s promise of a Diwali gift to citizens. Rates on tobacco products including cigarettes, zarda and beedi will continue under existing rates until compensation cess liabilities are fully discharged, with new rates to be notified later, the government stated. Experts said the changes “present both an opportunity and a responsibility for India Inc”. “While lower rates will boost consumption and simplify compliance, businesses must proactively prepare for a smooth transition. Key focus areas include managing potential Input Tax Credit accumulation on existing inventories and handling practical adjustments like MRP re-fixation across supply chains,” said Saurabh Agarwal, tax partner at consultancy firm EY. “We also need to be vigilant about the inverted duty structure that may arise. A time-bound provisional refund mechanism would be a significant positive step, boosting liquidity and easing working capital pressures... We are optimistic about this new phase of India’s GST journey,” he added. Experts also hailed the timing of the decision, especially against the backdrop of external headwinds such as the Trump tariffs. “Since the rate cuts are applicable from September 22nd, it gives some time for industry to prepare for the changes, including mechanism to pass on the benefits to consumers. Timing of these changes couldn’t have been better, just ahead of the festive season. Diwali has come earlier for the common man,” said Pratik Jain, partner at Price Waterhouse & Co LLP. Source link Read the full article

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PAN-Aadhaar link: Know people exempted from this process

The Centre has made it mandatory to link Aadhaar to Permanent Account Number (PAN), before March 31 this year. The deadline to link PAN with Aadhaar has been extended several times, however, in case of failure in linking PAN with Aadhaar within the current deadline, PAN will become 'inoperative' from April 1, according to an advisory by the Income Tax Department. Read here: Step-by-step guide to check if your PAN-Aadhaar is linked as deadline nears However, there are some exemptions to this rule. As per a notification issued by the Union Finance Ministry in May 2017, there are four categories who are exempted from PAN-Aadhaar linking mandate. 1. Residents of north-eastern states of Assam, Meghalaya and Union Territory of Jammu and Kashmir 2. A non-resident as per the Income-tax Act of 1961 3. Of the age of 80 years or more at any time during the previous year; 4. Not a citizen of India. However, the exemptions provided are subject to modifications depending on latest government notifications. Other than the above mentioned exempted categories, all the other individuals are compulsorily required to link their PAN with their Aadhaar. Steps to link PAN with Aadhaar via web portal: 1. Visit the Income Tax e-filing official websites- eportal.incometax.gov.in or incometaxindiaefiling.gov.in 2. Register on the portal with your PAN as the user ID if not registered already. 3. Log into the portal. 4. A pop-up window will appear to link PAN with Aadhaar or go to ‘Profile Settings’ on the Menu bar and click on Link Aadhaar. 5. Relevant details like name, date of birth, and gender will already be mentioned as per the PAN card details. 6. Verify the details with Aadhaar. If the details match, enter the Aadhaar number and click on the link now button. 7. A message will pop up saying that the Aadhaar has been successfully linked to the PAN. Read here: New ‘liveness’ check to be done for Aadhaar fingerprint scans: Centre Other methods of linking PAN with Aadhaar: 1. People can also visit the following websites for the linking process- https://www.utiitsl.com/ and https://www.egov-nsdl.co.in/ 2. Through SMS: Type the following message UIDPAN. The message can be sent to 567678 or 56161. 3. Visiting nearby PAN service centres: The linking process can also be done manually by visiting the nearby PAN service centre. Source link Read the full article

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Aadhaar authentication to become more secure with new system; know details

The Unique Identification Authority of India (UIDAI) has launched a new security system for Aadhaar-based fingerprint authentication and quicker detection of spoofing attempts, according to the Ministry of Electronics & IT, PIB press release.According to the UIDAI tweet, "UIDAI has successfully rolled out a new AI/ML enabled security mechanism for robust fingerprint authentication, & faster detection of spoofing attempts." UIDAI has successfully rolled out a new AI/ML enabled security mechanism for robust fingerprint authentication, & f… https://t.co/SxWoiwyqo4— Aadhaar (@UIDAI) 1677569514000How it is making Aadhaar authentication transactions more robust and secure The in-house developed artificial intelligence and machine learning (AI/ML)-based security mechanism now checks the liveness of the obtained fingerprint utilising a combination of finger minutia and finger image, the ministry said. This strengthens and secures Aadhaar authentication transactions, it added. How it cuts down the chances of spoofing attempts The new two-factor/layer authentication includes additional checks to authenticate the validity (liveness) of the fingerprint, reducing the likelihood of spoofing efforts even further.Who will be benefitted? The change will be extremely beneficial in industries such as banking and finance, telecommunications, and government. It would also benefit the bottom of the pyramid by strengthening the Aadhaar-enabled payment system and discouraging harmful attempts by unscrupulous people, according to the release.Authentication user agencies (AUAs) According to the press release, “AUA is an entity engaged in providing Aadhaar-enabled services to Aadhaar number holders using the authentication as facilitated by the authentication service agency. Sub-AUAs are agencies that use Aadhaar authentication to enable their services through an existing requesting entity. UIDAI has expressed its thanks to all the AUAs/Sub AUAs for the support and cooperation.”“The UIDAI head office and its regional offices are in touch with all entities for facilitating any user agency (that may not have migrated yet) to switch over to the new secured authentication mode at the earliest,” it added."By the end of December 2022, a cumulative number of Aadhaar authentication transactions had crossed 88.29 billion and clocked an average per day transactions of 70 million. A majority of them are fingerprint-based authentications, indicative of its usage and utility in daily lives," the release added.Here are some important FAQs related to Aadhaar authentication as per the UIDAI website.What is a biometric device? According to the UIDAI website, “Biometric Devices Biometric devices means the devices that are used for capturing the biometric data inputs i.e Fingerprint / Iris /both the information from Aadhaar number holders. These biometric devices fall under two categories viz. Discrete Devices, Integrated Devices.”What is Aadhaar authentication? As per the UIDAI website, "Aadhaar Authentication" is the process by which an individual's Aadhaar number, along with demographic information (such as name, date of birth, gender, etc.) or biometric information (Fingerprint or Iris), is submitted to UIDAI's Central Identities Data Repository (CIDR) for verification, and UIDAI verifies the correctness of the details submitted, or lack thereof, based on information available to it.How to authenticate if my fingerprints are worn out / I have no fingers? To address such concerns, service providers could implement alternative authentication mechanisms such as iris authentication and OTP authentication. Furthermore, service providers may have various techniques for verifying their beneficiaries.Is there a mechanism to notify the residents when authentication occurs against their Aadhaar number? UIDAI notifies the authentication on the registered email of the resident. Every time UIDAI receives a biometric or OTP-based authentication request against an Aadhaar number, a notification is sent to the registered email address. Source link Read the full article

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Retirement planning: How to plan regular income, investments, healthcare expenses, estate planning

After putting in years of work and toil, comes the golden age of a retired life. However, the fact that we are no more earning a salary or income is hard to digest. So, when it comes to personal finance, it is important that we prepare for retired life well in advance. Here are some aspects that one should consider.Regular income You can invest your retirement corpus in such a way that it provides a regular monthly income. For this, you can consider investments like annuities, National Pension Scheme, Senior Citizens’ Savings Scheme, dividend payout plans of mutual funds, or a systematic withdrawal plan from a mutual fund investment.Investments After providing for regular income, plan for investments that may be held for a longer term to fund the older phase of retired life. You should have a balanced approach towards asset allocation and avoid exposure in high-risk assets like equities.Healthcare Your regular expenses may go down compared to while you were working, such as school fees, eating out, transport, etc. However, expenses on health may go up. So, ensure that you have adequate health insurance and specific investments to cover medical needs.Estate planning This is important as it helps to ensure that your assets are distributed in accordance with your wishes, while minimising on taxes and other expenses. It aims to provide for your loved ones in the event of your death by making a will, creating a trust, or making a gift deed.:: Points to note - Those who own a home can consider reverse mortgage as an option for regular income. - A financial adviser can help you assess your monetary situation, determine your goals and create a customised plan to manage your finances after retirement. Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta. Source link Read the full article

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UPI PayNow: UPI-PayNow launched: Who can use, daily limit, how it will benefit you

To enable faster remittances between India and Singapore, India's retail payment system Unified Payments Interface (UPI), and its equivalent network in Singapore called PayNow were integrated on February 21, 2023. This linkage will allow users from both countries to access faster and more cost-efficient cross-border remittances. Shri Shaktikanta Das, governor of the Reserve Bank, and Mr. Ravi Menon, managing director of the Monetary Authority of Singapore, launched the facility through token transactions using the UPI-PayNow linkage.How UPI- PayNow will help customers of India and Singapore The UPI-PayNow integration will allow users of the two quick payment systems in either nation to send money across borders quickly, securely, and affordably via their respective mobile apps. It is possible to send or receive money from India using only a UPI-id, cellphone number, or Virtual Payment Address for money held in bank accounts or e-wallets (VPA).Indian banks eligible for remittances According to the RBI press releases, “To begin with, State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank will facilitate both inward and outward remittances while Axis Bank and DBS India will facilitate inward remittances. For Singapore users, the service will be made available through DBS-Singapore and Liquid Group (a non-bank financial institution). More banks will be included in the linkage over time.”Limit to sending money to Singapore Customers of these participating banks can send money across borders to Singapore via the bank's internet banking or mobile banking app. An Indian user can initially send up to Rs 60,000 in one day (equivalent to around SGD 1,000). For the user's convenience, the system shall dynamically calculate and show the amount at the time of the transaction in both currencies. According to the RBI press release, “ The UPI-PayNow linkage is the product of extensive collaboration between Reserve Bank of India (RBI), Monetary Authority of Singapore (MAS), and Payment System Operators of both countries viz. NPCI International Payments Limited (NIPL) and Banking Computer Services Pte Ltd. (BCS), and participating banks / non-bank financial institutions. This interlinkage aligns with the G20’s financial inclusion priorities of driving faster, cheaper, and more transparent cross-border payments and will be a significant milestone in the development of infrastructure for cross-border payments between India and Singapore.” According to the NPCI website, important FAQs to know before.What is UPI? Unified Payments Interface (UPI) is an instant payment system developed by the National Payments Corporation of India (NPCI), an RBI regulated entity. UPI is built to instantly transfer money between any two parties' accounts.What is a UPI ID? UPI ID (also called Virtual Payment Address or VPA) is a unique ID for using UPI. The UPI Id can be created by registering with one of the UPI enabled mobile applications (App) using your bank account details.How can I view my transaction history? Go to Home Screen ->Transaction History, to view all your past and pending transactions.Does a customer need to register before remitting funds using UPI? Yes, a customer needs to register with his/her PSP before remitting funds using UPI and link his accounts.What happens if my mobile phone is lost? In case of mobile loss, one needs to simply block his mobile number thus no transaction can be initiated from the same mobile number which is a part of device tracking and at the same time UPI pin would be required for any transaction which is not to be shared with anyone. Source link Read the full article

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money management tips: 5 useful tips to manage your money after a job loss

Thousands of job cuts have been announced in the first one-and-half months of 2023. The layoff wave has impacted not only startups but also big tech companies such as Amazon, Microsoft, Google, and Twitter. As many as 380 tech companies have axed 1,08,246 employees across the world this year, according to Layoffs.fyi, a tracking website.Being laid off can be devastating. But don't panic. You need to sketch a plan for how to pay your bills, and EMIs and manage your finances till you get a new job. Here are some useful tips to manage your money after a job loss.1) Cut your expenses If you just got a pink slip, your monthly cash inflow will be reduced significantly. So, the first thing you need to do is slash your miscellaneous expenses. Stop ordering food frequently, cut down on going out every weekend and eating outside, and cancel the gym membership or OTT subscription that you hardly use, said experts. Eliminating all discretionary expenses in one go can be difficult, so try to reduce them to the bare minimum. For instance, plan a family movie night at home instead of a luxury meal outside. 2) Prepare a monthly balance sheet Make sure that you prioritise your fixed expenses such as insurance premiums, loan EMIs, credit card repayments, and monthly instalments for mutual fund SIPs. First, take stock of the savings you have. Then, you need to calculate your monthly financial commitments and liabilities. "Check and budget your savings in such a way as to have at least six months of survival money. After being fired, in all probability, it will take time to get hired," said Ankit Mehra, CEO and Co-founder of GyanDhan, an NBFC. If you don't have enough savings, then you need to prioritise your investments. Stop your monthly SIP if the finances are too constrained. For home or vehicle loans, you can request the bank to reduce the EMI amount by increasing the loan tenure. You can also inform your insurance company about your situation. Check whether they can alter the periodicity of payment of the premium or reduce the cover amount temporarily, suggested experts.3) Review your investment portfolio with a long-term perspective You need to cut down on your expenses. However, do not dig into your retirement corpus or long-term investment goals. "Look at how much you spend each month and see where you can save. Review your investment portfolio to ensure that it aligns with your current financial goals and risk tolerance. Make changes to your investment portfolio gradually and with a long-term perspective in mind and not make any drastic changes based on short-term market events or emotions," said Kartik Narayan, Chief Executive Officer - Staffing, TeamLease Services. 4) Money crunch? Go for loan against your investments, borrow from friends and family If you don't have an emergency corpus, use your bank savings to go through this period. If it is insufficient, you can start withdrawing from your existing investments. The interest on a loan against assets such as fixed deposit, PPF, insurance, gold, or property is usually cheaper than personal loans. For example, the loan from the PPF account has an interest rate that is 1 per cent higher than the current effective interest rate. So, if you request a loan against your PPF, the interest rate could be 8.1 per cent. Do note that other terms and conditions will be applicable to be eligible for a loan against PPF. At present, the interest rate on personal loans in any public or private sector bank usually starts from 10.5 per cent, depending on your income and assets. If you have invested in a mutual fund, you can also consider redeeming your investments. So, choose wisely in case you need some urgent cash flow."Ensure you don’t borrow money at high-interest rates thus getting into a debt trap," Sudhakar Raja, Founder, and CEO of TRST Score, a human risk mitigation platform.You can also reach out to friends and family to borrow some money to survive this period. You can always repay it later when you get a job again.5) Take care of your mental health "Layoffs are brutal. They bring with them a range of negative emotions that will derail you. Take one day at a time. If you are feeling overwhelmed, get in touch with your friends, family, or even a therapist (free resources are available)," said Mehra. Don't be discouraged by job loss Finally, do remember that being laid off is not necessarily a reflection of your performance. "Don't be discouraged by the job loss. Know that this is just one of the phases of an economic cycle. Apply for jobs in the sectors that are currently performing well. Hone your skills for higher job security," said Sumit Sabharwal, CEO, TeamLease HR Tech. Source link Read the full article

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Aadhaar Enrollment: Now separate forms for Aadhaar enrollment and updation for adults, children in different age groups

The Unique Identification Authority of India (UIDAI) announced that different forms will be used for Aadhaar enrolment and updating of Adult residents (>18 years) and Children (0-5 and 5-18 age groups separately). UIDAI made this announcement via an office memorandum dated February 6, 2023.According to the UIDAI office memorandum: As part of the strengthening of Aadhaar enrolment ecosystem, E&U-I Division has issued OM No. HQ-16024/4/2020-EU-I-HQ Part (1) dated 21.09.2022 with direction to collect the Aadhaar number of both the parents along with biometric authentication of any one parent at the time of enrolment with some exceptions. In continuation to the above, it is decided to use separate forms for Aadhaar enrolment and update of Adult residents (>18 years) and Children (0-5 and 5-18 age groups separately). Enrolment and Update form for Adult residents (>18 years) Enrolment and Update form for Child (0-5 age group) Enrolment and Update form for Child (5-18 age group)The office memorandum stated, “Till the ECMP client is updated for collection of Aadhaar number of both parents (incase of child), the operator to be advised to feed Aadhaar number of one of the parents in the client with biometric authentication.”"As part of the strengthening of Aadhaar enrolment ecosystem, E&U-I Division has issued OM No. HQ-16024/4/2020-EU-I-HQ Part (1) dated 21.09.2022 with direction to collect the Aadhaar number of both the parents along with biometric authentication of any one parent at the time of enrolment with some exceptions."Earlier, UIDAI had issued a notification with direction to collect the Aadhaar number of both the parents along with biometric authentication of any one parent at the time of enrolment with some exceptions on circular dated 21.09.2022. The latest office memorandum also stated that these forms must be translated by ROs into the relevant local languages and distributed to Registrars and EAs with effect from February 15, 2023. Source link Read the full article

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financial planning: Joint financial planning: How a couple in their 30s with monthly income of Rs 2 lakh can achieve financial stability

Joint financial planning is process in which couples works together to create a comprehensive plan for their financial future. The goal of joint financial planning is to align a couple's financial goals and priorities and create a plan for managing their money.There is no one-size-fits-all answer to when couples should start planning their finances together, as it depends on a variety of factors, including their individual financial goals, priorities, and circumstances.Here we will discuss the best practices a couple in their early 30s with a monthly income of Rs 2 lakh should follow to achieve financial stability. Objective setting At any age, the start point for the financial planning process is clearly defining your objective. A couple earning Rs 2 lakh a month and in their early 30s could have objectives related to buying a house, children's education as well as their retirement. It is important to understand that objectives have to be converted to values and return targets. a. Child's education & marriage: While planning for children's education, important points to note include understanding the current cost of education, add the inflation, apart from inflation, if one is planning for overseas education, then the currency impact also needs to be factored in. This is applicable for setting aside funds for children's marriage too.Example, if one needs Rs 20 lakh for marriage today, at an inflation rate of 8% if you are planning for your child's marriage 25 years later, the corpus needed would be roughly Rs 1.5 crore. b. Buying a home and car: Two of the most common aspirations a couple has are buying a home and car. Here again the same rule applies. Let us say that one is looking at buying a car 3 years later, the current cost of buying a car could be Rs 10 lakh. At an inflation rate of 7%, the same car would cost around Rs 12.5 lakh, three years later. c. Retirement: If a couple wants to ensure a comfortable retirement, they need to start planning and saving as early as possible. By working together, they can make the most of their combined resources and achieve their retirement goals easily. Once the objective / goal is numerically defined, it is important to set a target rate of return. Let's say one targets a 12% per annum rate of return, then to achieve the above goals, the couple would need to invest roughly Rs 75,000 per month as can be seen in table below:How much you will need to save for your goals GoalCarHomeEducationMarriageRetirementTotalSIPRs 10000Rs 31000Rs 21000Rs 4300Rs 8500Rs 74800Time (in years)315153030--Rate12%Corpus (In Cr)Rs 0.04*Rs 1.5Rs 1Rs 1.5Rs 3--*We have considered only down paymentHave a strategy in place The next step is to understand the right mix of asset classes and products that can help you achieve the objectives set.For example, to achieve 12% return target, the below asset mix is recommended:Asset mixEquityDebtAverage return expectationAverage risk (std dev)70%9% Once the asset mix is decided, have the right mix of products in your portfolio. Key point to note here is to have products that have low correlation with each other and can help minimise investment risk.So, when investing in equity, equity mutual funds is a better option than stocks as it provides the benefit of professional management and diversification. When deciding mutual fund schemes, it is important to have a good blend of large cap, mid cap and small caps in the portfolio as well as different investment styles like growth and value themese.Review your portfolio on regular basis You must review your portfolio at regular intervals to ensure it is going in the direction towards your targeted return. Regular review will ensure that in case you need to take timely corrective measure if required. This may arise due to changing market environment or changes in objectives required.Don't not miss out on insurance Have a good term life insurance policy and a health insurance cover in place that can come handy in case of unforeseen events.For millennials in their 30s, it is the best time to start their financial planning. By this age, most of them have established careers and may be starting families, which means that their financial priorities and responsibilities are increasing. Financial planning is essential in ensuring that their hard-earned money is put to good use and helps them achieve their life goals, both short-term and long-term. (The author is Director & Head - Product & Research, Anand Rathi Wealth.) Source link Read the full article

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I-T dept to come out with modified valuation norms for taxing foreign investments in unlisted cos

The Income Tax Department is likely to come out with modified valuation rules under the I-T Act for ascertaining the fair market value (FMV) of shares of unlisted companies for the purpose of levying tax on non-resident investments, an official said.The Finance Bill, 2023 has proposed amending Section 56(2)(viib) of the I-T Act, thereby bringing overseas investment in unlisted closely held companies, excepting DPIIT-recognised startups, under the tax net.The official said that amendments are needed as I-T Act and FEMA provide different methodologies for calculating the FMV of shares of unlisted companies. "Rule 11UA of I-T rules will be re-prescribed taking into account the concerns expressed by stakeholders to harmonise it with the FEMA regulations," the official told PTI.Rule 11UA deals with determination of FMV of assets, other than immovable property.Under the existing norms, only investments by domestic investors or residents in closely held companies were taxed over and above the fair market value. This was commonly referred to as angel tax.The Finance Bill, 2023, has proposed such investments over and above the FMV, will be taxed irrespective of whether the investor is a resident or non-resident. Once approved by Parliament, the provisions would come into effect from April 1.However, no tax would be levied on investments in startups which meet the prescribed norms and are recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).Post the amendments proposed in the Finance Bill, concerns have been raised over the methodology of calculation of fair market value under two different laws.FEMA regulations mandate that issue of a capital instrument by an Indian company shall not happen at any value less than FMV computed as per FEMA laws.Under I-T law, tax would be levied on any excess price recovered over and above FMV (calculated as per the income tax laws) on issuing shares to a non-resident.Suppose FMV of a share computed under FEMA law is Rs 100, whereas under income tax it is Rs 80. Now, let's assume if the shares are issued to foreign investors at Rs 100 only. Even in such cases, the income tax department will impose tax on Rs 20 (100-80) in the hands of the recipient company.AMRG & Associates Senior Partner Rajat Mohan said under income tax laws, the taxpayer can calculate FMV as per book value or as per the discounted free cash flow method certified by a merchant banker. Whereas under FEMA regulations, valuation of equity instruments is done as per any internationally accepted pricing methodology.Nangia Andersen LLP Partner Vishwas Panjiar said instead of using a prescriptive approach as being currently adopted, the government should allow valuation to be done on the basis of any globally accepted valuation methodology.Also, the government should introduce tolerance limit (of say 20 per cent), similar to what is already in case of sale of immovable property, for issuing shares at more than the floor value arrived for FEMA purposes, Panjiar said.Deloitte India Partner Rohinton Sidhwa said the government may consider amending Rule 11UA of I-T Act to prescribe any internationally accepted valuation methodology under sub-rule 2 of 11UA in line with the FEMA valuation guidelines. Source link https://www.infinitycompliance.in/product/online-company-registration-in-india/ Read the full article

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Centre to revoke ban on few money lending platforms

The government will revoke the ban imposed on fintech firms LazyPay and Kissht after representations were made by these companies, a senior official said on Friday.The government last week ordered the blocking of 232 apps operated by overseas entities, including Chinese, for being involved in betting, gambling and unauthorised loan service.Also read: Centre bans over 230 illegal betting, gambling and loan appsSources said that the government will revoke the ban on LazyPay and Kissht that were in the list of banned websites and apps after representations were made by these companies.A senior government official confirmed the development.The Ministry of Electronics and Information Technology (MeitY) issued blocking orders on Saturday, based on an emergency request issued by a nodal officer of the home ministry, against 138 betting and gambling websites and 94 loan apps that were engaging in illegal money laundering and posing a threat to financial security of the country.Fintech firms LazyPay, IndiaBulls Home Loans and Kissht were among the list of blocked websites.As per the list, MeitY issued orders to block lazypay.in, which is a subsidiary of Dutch investment firm Prosus.The website www.indiabullshomeloans.com is operated by housing finance company Indiabulls Housing Finance Ltd, while Kissht.com is being operated by RBI-registered NBFC ONEMi Technology Solutions Private Limited.The other websites in the blocked list include buddyloan.com, cashtm.in, kreditbee.en.aptoide.com, faircent.com, true-balance.en.uptodown.com, and mpokket.en.aptoide.com.Fintech firms mPokket, True Balance and Kreditbee have denied any link with the banned platform."The reference of TrueBalance in the media story which mentions Meity’s target list of digital lenders is a clear case of impersonation. There is a proxy app present on the app store Uptodown with which we (TrueBalance) hold no direct or indirect connection."We hereby clarify that hitherto we have not received any official communication from the ministry," Balancehero India- which operates True Balance, said.Also read: Centre blocks 138 betting and 94 loan apps linked to ChinaSimilarly KreditBee said Aptoide is a third-party App Store, with which it has no formal or informal partnership."We are speculating that it's a proxy app on Aptoide, and investigating this further. Blocking of the Aptoide link is a favourable outcome for us," the company said.mPokket too has said that the app in the banned list is impersonating it and the firm has no link with the blocked platform. Source link Read the full article

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Interest rate on PF deposits may be near 8% for FY23

New Delhi: The government may peg the interest rate on provident fund deposits at nearly 8% for 2022-23, almost at the same level as in the previous fiscal, people familiar with the matter told ET.They said the earnings of the Employees' Provident Fund Organisation were being worked out but 8% was doable considering higher returns on investments this year."Return on EPFO investments this year have been strong with reduced withdrawals on account of Covid-19 pandemic. Even investments in equity are expected to fetch better returns than last year, making a clear case of either retaining the interest rate at 8.1% or bringing it a tad lower to 8%," a senior government official said on the condition of anonymity. Another official said raising the interest rate beyond 8.1% will widen the difference between PF rates and rates on public provident fund (PPF) and general provident fund (GPF) which stands at 7.1%."The government will stick to around 8% to avoid any political backlash as it heads into key state assembly elections this year, followed by general elections next year," the second official added.The central board of trustees of EPFO is expected to meet later this month or in early March to decide on the interest rate that will be recommended by its Finance Investment and Audit committee based on the earnings for 2022-23. The retirement fund body had announced the interest rate of 8.1% for 2021-22, which was the lowest in four decades and was significantly lower than 8.5% credited in the preceding year. This was on an estimated income of ₹76,768 crore with ₹450 crore as surplus. Exchange Traded Fund The CBT is also expected to take a call on the threshold on redemption of exchange traded funds at its upcoming meeting.It had in its last meeting in October 2022, proposed fixing a threshold on ETF redemption to ensure minimum returns and better payout to its subscribers. EPFO started investing in equities in 2015-16, starting with 5% in the first year, 10% in the second year and 15% in the subsequent years. Source link https://www.infinitycompliance.in/product/online-company-registration-in-india/ Read the full article

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DigiLocker FAQs: Can you make change to account details, what type of files can be uploaded, can NRIs use

Union Finance Minister Nirmala Sitharaman announced during her Budget 2023 speech that DigiLocker, a cloud-based platform for issuance and verification of documents & certificates in a digital way, will now support additional documents and will also be utilised for storing and sharing documents as needed.The DigiLocker website lists a few key FAQs that you should be aware of both before and after uploading your documents.1. What are the key components of DigiLocker? DigiLocker account has the following sections: - Dashboard – This is the home screen of your DigiLocker account,, from where you can navigate to other sections of DigiLocker. This also shows summary of issued documents and a link to get documents from partners integrated with DigiLocker. - Issued Documents – This section shows list of URIs (links) of digital documents or certificates issued by the Govt. departments or agencies integrated with DigiLocker. - Uploaded Documents – This section shows all the documents which are uploaded by you. You can update the document type and share these uploaded documents. - Shared Documents – This sections shows the list of documents which you have shared with others (via. email). - Activity – This section keeps log of all the activities performed by you in DigiLocker account. The log includes the details about activities such as file upload, download, share, etc. - Issuers – This section provides the lists of departments and agencies that are registered with DigiLocker as Issuers. If these departments have issued any document/certificate to you, it will appear in the form of a URI (link) in your Issued Documents section. - Authentic Documents, Legally at Par with Originals. - Digital Document Exchange with the consent of the citizen. - Faster service Delivery- Government Benefits, Employment, Financial Inclusion, Education, Health. - Reduced Administrative Overhead: aimed at the concept of paperless governance. It reduces the administrative overhead by minimizing the use of paper and curtailing the verification process. - Digital Transformation: provides trusted issued documents. Issued Documents available via DigiLocker are fetched in real-time directly from the issuing agency. - Secure Document Gateway: acts as a secure document exchange platform like payment gateway between trusted issuer and trusted Requester/Verifier with the consent of the citizen. - Real Time Verification: provides a verification module enabling government agencies to verify data directly from issuers after obtaining user consent.3. What are issued documents and what are uploaded documents? Issued documents are e-documents issued by various government agencies in electronic format directly from the original data source and the URI (link) of these documents is available in the issued documents section of DigiLocker. Whereas uploaded documents are those documents that are uploaded directly by the DigiLocker user. 4. How can I upload documents to my DigiLocker account? You can upload documents from inside your ‘Uploaded Documents’ section. You can upload documents from inside your ‘Uploaded Documents’ section. Click the upload icon to start uploading a document. In the file upload dialog box, locate the file from your local drive and select 'open' to complete the uploading. To assign a document type to your uploaded file, click 'select doc type'. This will show a pop up with a drop down selection of various document types. Choose the appropriate document type and click 'save'. You can also edit the name of the file using the edit icon next to the filename.5. What is the maximum allowed file size that can be uploaded? Maximum allowed file size is 10MB.6. What type of files can be uploaded? File types that can be uploaded - pdf, jpeg & png.7. DigiLocker now allows citizens to access their digital Aadhaar. What is digital Aadhaar? Is it the same as the eAadhaar issued by UIDAI? Digital Aadhaar in DigiLocker is the same as eAadhaar issued by UIDAI. DigiLocker has partnered with UIDAI to make it available automatically to its users when they link their DigiLocker account with Aadhaar. The advantage of digital Aadhaar is that it can be shared with any agency or organization in electronic form thus elimination use of Photocopies or print outs.8. I have already signed up for DigiLocker and linked my Aadhaar. How can I get my Digital Aadhaar in DigiLocker? Here are the steps to get Digital Aadhaar in DigiLocker if you already have Aadhaar linked DigiLocker account: Login to DigiLocker with your credentials. Go to the issued section where you will see your digital Aadhaar Card listed. Just click on the view/download option to access the Digital Aadahar.9. What is the meaning of URI? A URI is a Uniform Resource Identifier generated by the issuer department, which is mandatory for every e-document of the DigiLocker system. This unique URI can be resolved to a full URL (Uniform Resource Locator) to access the actual document in its appropriate repository.10. I am a NRI (Non Resident Indian), can I sign up using a foreign mobile number? No, it is not possible. You can register in DigiLocker using Indian mobile number only.11. How can I change the information displayed (like email, mobile etc) in my Aadhaar profile on DigiLocker? The information displayed in your Aadhaar profile in your DigiLocker account (like name, address, email, mobile etc) is for display purposes. This data is only fetched from UIDAI and it is not possible to make any changes to this data from DigiLocker. To make changes to your Aadhaar data, please visit your nearest Aadhaar enrolment center. Source link Read the full article

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Ease of GST compliance: Still a distant dream

India’s biggest tax reform, the Goods & Services Tax (GST) was introduced on 1 July 2017. The journey of GST in India has been a roller-coaster ride with many hits and misses. Since its inception, the Government has considered several legal and procedural changes to simplify the tax system for the smooth functioning of GST in the country. GST has also brought with it a paradigm shift in the use of technology in tax administration and compliance. However, even 5 years and multiple policy amendments, it seems that not everything has unfolded as planned.GST compliances which were envisaged to be easier and less complex, have turned out to be a compliance nightmare with multiple and frequent changes in the tax returns and reporting requirements. Further, the GST portal has been a puzzle and cause of concern for many taxpayers since its inception. Harmony between the provisions of the law and the functionality offered on the GST portal remains elusive. It took months to update the portal on account of changes in the law and process and still, it continued to face technical glitches.Under the GST Law, the facility to revise incorrect reporting in a return is still limited and inadequate to meet the needs. If a taxpayer records an error while filing a return, he should be allowed to rectify it voluntarily. Currently, errors made in a tax return are corrected in the subsequent month’s GST returns. As the return functionality/utility doesn’t permit rectification of errors in the source document (respective monthly return) with a suitable audit trail and adjustment of tax liability, but merely allows corresponding adjustment in the subsequent period’s return, it brings along various challenges. Also, in such instances, it is difficult to periodically match the return data with books. The process of the claim of Input Tax Credit (ITC) has undergone several changes over the last 5 years. Earlier, taxpayers were allowed to claim the entire eligible ITC based on their purchase invoices and GSTR-2A was only facilitation, which did not impact the ability of the taxpayer to avail ITC on a self-assessment basis. Subsequently, the ITC was restricted to 120%/110 %/105% (as amended from time to time) of the matched credits with GSTR-2A. Later, through another change in the functionality and law, ITC would not be available unless the details of invoices have been communicated in Form GSTR-2B by the government portal. Further making matters worse, the Union Budget 2022 imposed another onerous condition that ITC would be available only if it is not restricted in the auto-generated form by the common portal. The restrictions enumerated under the said provisions are to address defaults of the suppliers viz. non-compliance with registration provisions, default in reporting and payment of tax, excess ITC availment, etc., the imposition of such restrictions on the recipient, for the non-compliance of a supplier causes hardships to the recipient, who has no recourse or control over the supplier. Seamless ITC is one of the stated objectives and salient features of GST, now becoming a casualty in the process.The recent changes in reporting of returns in form GSTR-3B require the recipient to avail ITC as per the GSTR-2B data and reverse the ITC for supplies that are not received by him or in transit. The basic report for claiming ITC would be GSTR-2B and the taxpayer would be cumulatively required to maintain a reconciliation between their purchase register and the ITC claimed in GSTR-3B. Therefore, the recent changes in form GSTR-3B are primarily meant to ease tax administration, which adds to the woes of the taxpayer making compliance difficult and cumbersome.In addition to the above, the ambiguity in the annual returns and reconciliation statement on several fronts, delay in operationalisation of forms such as ITC-02, glitches in the portal with respect to the filing of TRAN-1, etc. have made compliances under GST a nightmarish proposition for taxpayers.In conclusion, a pathbreaking and progressive piece of fiscal law has turned into a horror story from the perspective of a compliance ease promise. It is critical to reckon that the policies and procedures must be designed to reduce the compliance burden on honest taxpayers. It is anticipated that the GST Council would continue to consider the challenges faced while introducing appropriate changes for the seamless flow of ITC, simplification of compliance mechanisms, etc. to establish a taxpayer-friendly and empathetic GST system. This would also promote entrepreneurship and create a facilitative fiscal environment.The writer is Associate Partner - Indirect Tax, BDO India. ETRise MSME Day 2022 Mega Conclave with Industry Leaders. Watch Now. Source link Read the full article

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Digital Services gst: GST on digital services: Budget 2023-24 broadens scope of OIDAR

The availability of cheaper and feature-rich cell phones along with the penetration of low-cost internet in rural India fuelled by the Digital India campaign, has pushed service providers to transform the way services are delivered and as a result, the players in advertising, media, education and gaming have grown exponentially over the last few years. Considering the size of the Indian market and growing demand in these sectors, several overseas entities are investing in India and rendering services digitally to Indian customers.The levy of tax on Online information and Database Access Service (OIDAR) was introduced in India in 2001 under the erstwhile service tax regime and in 2016 the ambit of services was widened to include several digital services into the tax fold. In July 2017, the GST law borrowed the provisions governing OIDAR from the service tax law.OIDAR is a category of services provided digitally through the medium of the internet and received by the recipient without a physical interface with the supplier of such services. The nature of OIDAR is such that it can be provided online from even a remote location outside India to a customer in India. The GST law defines OIDAR in clear terms and also enlists certain illustrative services such as advertising, cloud services, e-books, movie, music, software, data/information retrieval services, data storage and online gaming services rendered through online/internet mediums. Any overseas supplier involved in the rendition of such services to a customer in India shall follow a simplified registration process under the GST law, either directly or through the appointment of a representative in India and follows routine monthly compliances.The Government as part of the amendments proposed in the Union budget 2023-24 has broadened the scope of OIDAR services, by removing the term ‘essentially automated and involving minimal human intervention’ from the definition of OIDAR services. This would essentially mean that even if the services are not totally automated and involve human interactions through online/internet mediums for the rendition of services, the services will get qualified as OIDAR services.It would be important to highlight that several overseas educational institutions started conducting online education programs and considered their services as not qualifying under the OIDAR category as the education courses involved regular human interactions. However, the proposed amendment in the definition of OIDAR services would require such overseas service providers to revisit their tax position.In addition to the above amendment, the Union budget 2023-24 has also amended the definition of ‘non-taxable online recipient’, wherein the scope has been widened. The proposed amendment would make OIDAR services taxable in the hands of the overseas supplier (or intermediary as applicable) if any unregistered person or persons registered under Section 51 of the CGST Act in India, receives OIDAR services for any purpose.Any overseas entity rendering services to customers in India would be required to conduct the following key tests to determine the taxability of the transactions in India under the OIDAR provisions:- Whether the transaction qualifies as an OIDAR - Whether the entity qualifies as a ‘Non-Resident Taxable Person’ in India - Whether the services are rendered to any person who is not a GST registrant in India or to a person registered solely for deducting tax under section 51 of the CGST Act - Whether services are rendered by the overseas service provider directly through its website to end customers located in India - Whether the digital services are rendered through applications downloadable through third-party app - Whether GST is discharged by a third-party app service provider on behalf of the overseas entity - Create awareness - The lack of awareness of the OIDAR provisions is a key challenge that compels GST authorities to issue notice to demand tax, interest, and penalty on overseas suppliers. Several overseas suppliers were issued notices to their dismay where tax along with interest and penalty were recovered for non-compliance. In some instances, certain overseas entities have decided to discontinue services to a customer in India due to unexpected tax costs. To tackle this challenge, the Government shall establish a suitable system and robust technology to monitor the supply of OIDAR upfront and create awareness among overseas entities rendering services to customers located in India. This would enable the overseas service provider to remit GST by appropriately collecting the taxes from the customers, rather than bearing GST and rendering the business infeasible. - Challenges involved in registration, tax payment and compliances – Allow overseas suppliers to obtain a GST registration with the least possible documentation and convert the existing monthly compliance requirement to quarterly or half yearly to reduce the compliance burden. - Amnesty or tax settlement process – Provide an amnesty or tax settlement mechanism to overseas businesses engaged in the supply of OIDAR. The companies who had not collected taxes from end customers due to a lack of awareness may be afforded a onetime dispute settlement option for the initial years of GST, which would encourage them to come clean with respect to past dues. While ‘Ignorance of the law is no excuse’, the purpose and object of the law are not to multiply ignorant defaults or loose/delay revenue! It reminds us that ‘there is a true law, right reason, agreeable to nature, known to all men, constant and eternal, which calls to duty by its precepts, deters from evil by its prohibition’.The writer is Associate Partner - Indirect Tax, BDO India. ETRise MSME Day 2022 Mega Conclave with Industry Leaders. Watch Now. Source link Read the full article

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How to update UAN and EPF KYC details Online

UAN stands for Universal Account Number is a 12-digit number given to each EPFO member. This number, which acts as a pivot, connects many Member Identification Numbers (Member Ids) assigned to a single member. Here are few important FAQs on UAN KYC, release by EPFO.1. What is KYC? Know Your Customer or KYC is a one-time process which helps in identity verification of subscribers by linking UAN with KYC details. The Employees / Employers need to provide KYC details viz., Aadhaar, PAN, Bank etc., for unique identification of the employees enabling seamless online services.2. How can I seed my KYC details with UAN? o Login to your EPF account at the unified member portal o Click on the “KYC” option in the “Manage” section o You can select the details (PAN, Bank Account, Aadhar etc) which you want to link with UAN o Fill in the requisite fields o Now click on the “Save” option o Your request will be displayed in “KYC Pending for Approval” o Once employer approves the details the message will be changed to “Digitally approved by the employer” o Once UIDAI confirms your details, “Verified by UIDAI” is displayed against your Aadhaar. 3. What to do if my employer is not approving KYC? In case your employer is not approving KYC details, you can directly approach administration or HR department with request. If it is taking more time you can escalate it to higher authority in the organization. If no one is responding to your request you can approach EPF Grievance via http://epfigms.gov.in. 4. How do I know that KYC updated by me is approved by the employer? The status will be shown against updated KYC document on the same page. The system will also trigger SMS on your register mobile number.5. How can I seed my Bank account details? o Login to your EPF account at the unified member portal o Enter your bank account number and IFSC code. o The details have to be approved by your employer. o Once approved the bank account gets seeded.6. What can I do if my UAN is not seeded with Aadhaar? Member can himself seed UAN with Aadhaar by visiting member portal. Thereafter the employer must approve the same to complete the linkage. Alternatively, member can ask his employer to link Aadhaar with UAN. The member can use “e-KYC Portal” under Online Service available on home page of EPFO website or e-KYC service under EPFO in UMANG APP to link his/her UAN with Aadhaar without employer’s intervention.7. Can I change my already seeded Bank account number? Yes. The bank account number can be updated any number of times by following the steps mentioned above. However, the bank account details cannot be changed during pendency of any claim with EPFO. 8. What precautions should I take while seeding Bank account number? You should seed active bank account to which you are either an individual or joint holder with your spouse. Also ensure that the bank account does not have a deposit cap greater than your withdrawal benefit. 9. I have changed my job. Should I activate my UAN again? UAN has to be activated only once. You do not have to re-activate it every time you switch jobs. 10. Do I have to pay any fee for UAN registration? No, UAN registration is free of cost and you do not have to pay any fee to activate it. Source link Read the full article