Corporate and Professional Updates on 24th April 2019

Indirect tax Updates:

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  • Manner of utilization of input tax credit under GST law is in highlights since past few months, before GST. Act, 2018(w.e.f. 1st Feb, 2019) the entire provisions pertaining to manner of utilization were contained in Section 49(5) of CGST Act, 2017.
  • In the said GST (Amendment) Act, 2018 a new Section 49A was introduced and certain proviso were inserted under Section 49(5). All these amendments were followed by insertion of rule 88A from 29/03/2019.

RBI Updates:

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  • The Reserve Bank of India’s (RBI’s) second three-year dollar-rupee swap auction was a massive success like the first one, even as it took just five large bids to cover the entire dollor 5 billion on offer. Market participants bid more than three times the offer, but the five successful bids were closer to the market rates and managed to shoot up the forward premium in the secondary market. “The aggressive bids most likely came in from a large corporate looking to hedge long-term dollar liabilities, such as external commercial borrowings.
  • RBI’s second 3-year dollar-rupee swap auction too a grand success Since the other participants could not offload their dollar holdings, the central bank offered to buy up to Rs 25,000 crore of bonds from the secondary market in May to help with liquidity. The banking system was running a liquidity deficit of Rs 1.4 trillion as of Monday. Currency dealers say the excess dollar holding would likely cause pain for some banks in the coming days. A similar thing happened after the March auction, when the cash-spot rate shot up to a record high due to excess availability of dollars in the system. Otherwise, the bidding pattern, and subsequent rise in the forward premium indicated that the central bank could be nearing the end in using this liquidity tool.
  • The cut-off premium was significantly higher than the last auction. The forward premium rate spiked following the auction as banks are now expecting that the option to swap cheap may not be available next month. The forward premium for one year crossed 4.55 per cent after the auction, which is the level where the premium stays in normal time. The one-year forward rate had closed at 4.24 per cent on Monday. The rupee fell to 69.86 a dollar but closed at 69.63 on Tuesday.
  • “This indicates that the swaps are nearing the end. The market won’t let the RBI to push rates down further for long,” said Jamal Mecklai, managing director at Mecklai Financial Services. Banks offered $18.65 billion for an auction size of up to dollor 5 billion. The central bank received 255 bids, higher than March’s 240 bids. The cut-off premium was 838 paise. In the first auction on March 26, the cut-off was 776 paise. The three-year forward premium was 775 paise in the morning before the auction. It rose to close at 860 paise after the auction.

Other Updates:

  • SoftBank eyeing a pie in Mukesh Ambani’s most valuable asset.
  • RBI okays HDFC proposal for stake in Bandhan Bank.
  • US to ensure steady oil supply for India.
  • Cos may get more time to meet new disclosure rules.
  • HC rules taxman can seek interest on GST liability.
  • Essar can’t discriminate between creditors.
  • RBI’s second 3-year dollar-rupee swap auction to a grand success.
  • ITC takes Hotel Leela to NCLT over ‘oppression’ in JM ARC, Brookfield deals.
  • RBI to buy Rs 25,000 crore of bonds in two instalments via OMO in May.
  • Saudi, Iraq and UAE may fill in Iran gap as US ends sanctions waiver
  • Tata Global Beverages to acquire Dhunseri’s packet tea biz for Rs 101 cr.
  • Micro finance sector to grow up to 22% in FY20.
  • Pharma exports increase 11% to $19.2 billion
  • Jindal Steel completes first-ever rail order ahead of schedule
  • Nagarjuna Oil case: NCLT dismisses Haldia Petrochem plea to appoint new valuer.
  • Sterlite Tech Q4 net profit up 47% to Rs 165.17 cr.
  • Zee launches theatre channel Spotlight on Airtel Digital TV.
  • Reliance prepares the ground for e-commerce launch.
  • Essel Group in talks to sell road assets to CDPQ, Cube Highways.
  • extends ban on import of milk products from China.
  • Trai directs Bharti Telemedia to comply with provisions of new regulations.
  • Lupin’s Pithampur facility may face regulatory action, says USFDA.
  • Cola Cola sees growth in India among other APAC markets in Q1.
  • Future Retail gets CCI nod to raise Rs 2,000 crore via equity warrants.
  • Jaypee Infratech homebuyers offered Rs 97-crore compensation.
  • ICICI Securities announces dividend of Rs 5.70 per share.
  • Government likely to raise wheat import duty to 40%.
  • Global warming shrank Indian economy by 31 per cent.
  • P&G guilty of profiteering Rs 250 crore from GST rate cut.
  • Solar capacity addition of 7-7.5 GW likely this fiscal.
  • Jet Airways will do everything to revive airline, says CEO.
  • Industry delegation calls on RBI Guv, discusses steps for MSMEs, NBFCs.
  • GAIL emerges as highest bidder for IL&FS wind power plants.

Key Due Dates:

  • 20-04-2019 – GSTR-3B for the m/o March 2019.
  • 30-04-2019 – GSTR-1 for the quarter ending March 2019 for taxpayers with Annual Aggregate turnover upto than 1.50 Crore.
  • 30-04-2019 – Deposit of TDS/TCS for m/o March 2019.
  • 30-04-2019 – Furnishing challan-cum-statement in respect of tax deducted u/s 194-IA/194IB in month of March’19
  • 30-04-2019 – Due date for uploading declarations received from recipients in Form. 15G/15H during the quarter ending March, 2019.

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