Page 47 - Banking Finance October 017

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provision should itself act as a deterrent. The Council also as a plumber. Also, cab aggregators will have to pay 12 per
decided to exempt import of goods and services related to cent GST if they claim input credit and 5 per cent without
FIFA Under-17 World Cup, which will be hosted by India. For input credit.
agriculture services, tax rate of post-harvest and storage has
been brought down to 12 per cent from 18 per cent. Also, On the registrations under GST, the Union finance minister
tax rate for entry into planetariums has been reduced to said that more than 71 lakh central and state taxpayers have
18 per cent from 28 per cent. In case of “rent a cab service”, migrated to the GST system and another 15.67 lakh new
GST rate will be 12 per cent without input tax credit and 5 applications for registration have been received. The Council
per cent with input tax credit, Revenue Secretary Hasmukh will meet next on September 9 in Hyderabad, where it will
Adhia said. take up the issue of many rice millers de-registering their
brands to escape taxation under the GST.
Besides, the norms for reverse charge mechanism have been
tweaked to include aggregators who are offering small As per the GST rates, unbranded food items are exempted,
house-keeping services like plumbing or others with the whereas branded and packed food items attract 5 per cent
liability to pay tax on them instead of service provider such rate. (Source : Indian Exp.)

RBI may revise GVA growth forecast
RBI is expected to revise down its GVA growth projection for this financial year, but policy rates are likely to stay un-
changed, says a Nomura report. According to the Japanese financial services major, further easing in policy rates is
unlikely as momentum of core inflation has been much higher than expected and because the growth slowdown is due
to non-monetary factors. "Risks to the RBI's GVA growth forecast of 7.3% this fiscal are clearly tilted to the downside,
and we expect this to be revised down at the upcoming policy meeting," Nomura said in a research note.
According to Nomura, though investment and industrial sector activities have improved, they are still fairly subdued.
"We expect real GVA growth to pick up to 6.7% in this fiscal from 6.6% in 2016-17, but see two downside risks - low
agricultural output and a potential pullback in government spending," Nomura said. India's economic growth slipped
to a three-year low of 5.7% in April-June as disruptions caused by demonetisation spilled over to the third straight
quarter amid slowdown in manufacturing activities. India's non-agricultural GDP growth will recover faster in the Sep-
tember quarter, as the effects of transitory factors (GST and demonetisation) are gradually waning. "Given our view
that both growth and inflation are headed higher in the coming quarters, we expect rates to be left unchanged for a
prolonged period," the report said.

RBI directs bank to refer more accounts to bankruptcy court

RBI has directed banks to refer 50 accounts to bankruptcy court if they are unable to find a resolution for them in
about three months, in the second such list that the regulator has sent out in its renewed campaign to clean up the
country's overwhelming bad corporate debt problem. The move will not only put pressure on promoters to come up
with workable recast strategies but also pinch banks even more as they will have to make higher provisions on loans of
companies referred to the insolvency process.

A senior bank official said each bank has got a separate list from the RBI. Based on conversations with bankers, ET
estimates the number of corporate accounts involved at 45-50 with about Rs 2 lakh crore in outstanding loans. It was
in June that RBI had sent out the first list of 12 accounts that added up to about Rs 2.5 lakh crore in money owed. The
new list is said to include companies such as Videocon Industries, Uttam Galva Essar Projects and Ruchi Soya, all of
which have debt that was classified as non-performing as of June in the books of at least 60% of lenders.
The other companies in this second list are said to include Jaiprakash Associates, Visa Steel, Videocon Telecom, Monnet
Power, Orchid Chemicals, SEL Manufacturing, Nagarjuna Oil Refinery, Castex, Jayswal Neco, East Coast Energy, Soma
Enterprises, Asian Colour, Unity Infraprojects, Jai Balaji Industries, Shakti Bhog, Ushdev International, East Coast En-
ergy and Transstroy India.

46 | 2017 | OCTOBER | BANKING FINANCE

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