Page 42 - BANKING FINANCE NOVEMBER 2023

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why many individuals, professionals, businesses and service between QR codes is established, retail e-rupee can also be
providers still opt for cash payments. utilized in lieu of UPI. The advantage of e-rupee lies in the
fact that these transactions do not involve banks, as the
However, in its present form, the e-rupee does not ensure funds are already within the e-rupee wallet, potentially
anonymity. Banks possess data regarding transfers into and resulting in faster payment completion, at least in certain
out of e-rupee wallets, and they are informed of all scenarios.
transactions through SMS notifications. Consequently, those
seeking to evade a financial trail are unlikely to embrace However, the most significant drawback of e-rupee when
the retail e-rupee. compared to UPI is that funds held in the e-rupee wallet do
not accrue interest. In contrast, money remains in a savings
Another group relying heavily on cash consists of individuals bank account until the UPI payment transaction is finalized,
within the informal and low-income sectors who lack allowing users to continue earning interest income. This
sufficient resources to maintain bank accounts. These factor is likely to sway users in favor of UPI.
individuals will likely persist in using cash.
Looking ahead, if banks introduce fees for UPI transactions
E-rupee vs. UPI: or if e-rupee offers anonymity, the dynamics could shift.

Another challenge for the e-rupee is the widespread Nonetheless, as it stands now, the adoption of e-rupee at
adoption of UPI in our society today. Once interoperability the retail level is expected to remain limited. T

GST collections hit a 3-month low in August at Rs.1.59-lakh crore

Collections from the Goods and Services Tax (GST) in August dropped to a three month low of Rs. 1.59lakh crore,
data released by the Finance Ministry showed. However, it is 11 per cent higher than last August. Experts expect
collections to rise during the rest of the year.
"The revenues for August are 11 per cent higher than the GST revenues in the same month last year. During the
month, revenue from the import of goods was 3 per cent higher, and that from domestic transactions (including the
import of services) up 14 per cent than the revenues from these sources during the same month last year," a Finance
Ministry statement said. GST collections in August relate to invoices raised for goods and services in July.
The statement said that out of the gross GST collection, CGST (Central Goods and Services Tax) contributed over Rs.
28,000 crore, while SGST (State Goods and Services Tax) and IGST (Integrated Goods and Services Tax) had a share
of over Rs. 35,000 crore and Rs. 83,000 crore, respectively. Cess provided around Rs. 11,700 crore.

I-T dept rolls out angel tax rules startup valuations

The government rolled out the final angel tax rules for valuation of shares issued by startups to resident and non-
resident investors, expanding the scope of the valuation methodology and easing the compliance burden on the
sector to make it more attractive to deal with a funding squeeze amid the backdrop of a global slowdown.

The rules have broadened the scope of valuation methodology by offering foreign investors five additional methods
and also brought in compulsorily convertible preference shares (CCPS), often seen as a key element of startup financ-
ing. The Centre has taken several measures to encourage startups and broaden the scope of the sector but some
taxation issues had been cited as an obstacle. The notification of the angel tax rules is expected to ease some of the
worries of foreign investors.
Earlier, angel tax was levied only on investments made by resident or local investors. However, the Budget expanded
its scope to cover non-resident investors.

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