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Impact of Herd Mentality on Investment Decisions

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Capital markets of an economy are a significant and indispensible source of investment and financing activities for corporate and other investors. Most of the financial assets are traded in these markets and they serve as the backbone of economic development. Such markets if engulfed in cognitive biases and psychological errors will result in misvaluations, excessive volatility and panic trading, thereby resulting in not just loss of capital from global sources, but also increased cost of capital for seekers of funds within the economy. It is therefore, imperative to understand these biases and the corrective actions necessary to reduce their effect. One of the major behavioural patterns observed among investors is herding. Impact of Herd Mentality on Investment Decisions Standard financia...

RegTech – Changing the regulation landscape

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What is the most significant challenge the financial services industry faces today? It is complying with ever-changing regulations. Non-compliance leads to cancellation of license, significant penalties, legal issues, and sanctions. Utilizing technology to meet the regulatory requirements like automating tasks, reducing operational risks, and reporting obligations is the need of the hour. The financial industry is increasingly looking at technology-driven transformation in regulatory affairs, popularly known as RegTech, to deal with the new directives and regulations. The global market size of Regulatory Technology (RegTech) was $1.37Bn in 2018 and is likely to reach $6.42Bn by the end of 2025, with a CAGR of 24.7% in 2019-2025* In the banking sector, there are multiple domains like Loans ...

Gujarat AAR rejects concessional GST rate for an affordable housing project in a township

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The Gujarat bench of the Authority for Advance Rulings (AAR) has denied the benefit of concessional GST rate for an affordable housing project in a township with a mix of other projects. A private developer had approached the AAR seeking an advance ruling on whether a particular project undertaken by the applicant could take the benefit of the concessional GST rate of 12%. The applicant is engaged in a project comprising two phases, and the second phase is an independent project for affordable housing and is eligible for the concessional 12% GST. The applicant claimed that a township is different from a standalone housing project. It is, in fact, an integration of various projects. Also, the entire area of the township cannot be considered for arriving at the specifications contained in th...

Kerala becomes the first State to adopt second-level verification for new GST registrations

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To keep in check the rising number of benami registrations that make fraudulent input tax credit claims, the State of Kerala has introduced a second level of verification of registration for all registrations granted after June 1, 2020. This verification is expected to be done for both State, and Central assesses. The office of Kerala’s Commissioner of State Tax, State Goods and Services Tax Department issued a circular stating that the GST registering authority will be holding the primary responsibility of ensuring accurate paperwork. This will be followed by the second level of verification by the intelligence wing. Once GST registration is granted, all details will be made available on the GST portal, and the Deputy Commissioner (Intelligence) of each jurisdictional district will ...

3 Years of GST: How GST transformed compliance in India?

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The Goods and Services Tax (GST), implemented on July 1st, 2017, completed its three years of operation. Considered to be the biggest reform in indirect taxes, GST combined (subsumed) almost 17 prevalent taxes into a single umbrella. Although introduced under the “One Nation, One Tax” slogan, the transition period was stressful for both the taxpayers and the government. But, the government has taken various measures overtime to stabilize the compliance process and resolve ongoing issues. GST is still an ongoing process, as evident from the 40th GST Council meeting, which has made various amendments to the system. In India, the dual GST model has been adopted wherein the tax is levied concurrently by both the Central and State/UT governments on the supply of goods and/or service...

3 Years of GST in India: The Journey So Far

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On July 1, 2020, India completed 3 years since the launch of GST. We’ve created an infographic to show you the major events in the journey of GST over the last 3 years.

Paratha is not roti – AAR ruling sparks debates across the country

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The Authority of Advance Ruling in Karnataka has ruled that ready-to-eat paratha needs to be heated or further processed for human consumption and hence is liable for 18% GST sparking quite the debate on social media last week. Bengaluru based ID Fresh Foods had sought an advance ruling to understand whether the supply of whole wheat parathas and Malabar parathas would be classified under Chapter 1905 and attract a GST rate of 5%. ID foods are in the business of manufacturing and supplying ready to cook products like idli and dosa batter and heat and eat products like parathas and chapatis. The Authority for Advance Ruling in Karnataka held that ‘heat and eat’ parathas were not covered by any other heading under the HSN code system. Additionally, since the parathas needed to be...

Changes under the new GST returns system

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The New Return System under the Goods and Services Tax is due to be rolled out in October 2020, and it promises to make the filing of GST returns (that have been extremely cumbersome so far) a breeze. What are the changes that make this new system simple, convenient and efficient? Let’s find out. HSN Code to replace HSN summary HSN code stands for Harmonized System of Nomenclature and has been a globally accepted system for over 30 years. It is a 6 digit uniform code that classifies over 5000 products. Under the current returns system, taxpayers are required to use an HSN summary viz. a summary of all the products and services that they have sold under that filing period. Under the New Returns System, this summary will be replaced by the HSN code. This HSN code will help classify the...

Features of the new GST returns system

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Unlike the Government’s previous attempt, where the Goods and Services Tax was introduced in 2017 and didn’t allow taxpayers any time for transition or understanding the filing of returns, the New Return System under GST has been designed to address taxpayer concerns while filing their GST returns and help them file their returns conveniently. Here are some of the features of the New Return System under the Goods and Services Tax. Monthly and Quarterly filing of GST returns The return filing dates and frequency will be based on the turnover of the taxpayer and shall be calculated based on the reported turnover in the preceding financial year. So if a taxpayer has a turnover below Rs. 5 crore in the previous financial year, they will be required to file their returns every quarter, while ot...

What to file under new GST returns system?

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The introduction of the New Returns System under the Goods and Services Tax is less than a month away and taxpayers will be happy to know that the new returns system does away with a majority of the N number of forms that taxpayers are currently required to submit while filing their GST returns. Under the current GST filing system, taxpayers are required to file a number of forms that can be cumbersome and has proven to lead to erroneous filing. Depending on the taxpayer category, taxpayers are expected to file GSTR-1, GSTR-4, GSTR-5, GSTR-6, GSTR-7 etc. But this will not be the case under the GST New Returns System. Under the simplified new system, taxpayers will be required to file a simplified main return form viz.GST RET-1 containing 2 annexures GST ANX-1 and GST ANX-2. Let us deep div...