ET Now: Typically ahead of a big event, you see a bit of a run-up in anticipation of something that is, of course, expected to be positive and if the run-up is too strong, too steep, you see a bit of a sell off post the event as well. We are almost in the post GST event because we will see the passage today. Do you think the markets take it easy for the near term and what would you be doing if you are sitting on cash right now?
Chakri Lokapriya: As you mentioned, we have had a very good last month. The markets were up really strong and now as we head into GST, the key becomes what is going to be the GST rate. Is it going to be 18%? Is it going to be 20%? 18% is positive, 20% is negative and so those kind of details now becomes the next leg to determine where the market goes from here. Click to read more
The introduction of GST in India is a substantial shift from the current tax regime. It is expected that service sectors will be majorly impacted of GST than manufacturing or trading sector. Among the other services provided financial services such as fund based, fee-based and insurance services will see major shifts from the current scenario.
Owing to the nature and volume of operations provided by banks and NBFC vis a vis lease transactions, hire purchase, related to actionable claims, fund and non-fund based services etc., GST compliance will be quite difficult to implement in these sectors. Click to read more
Once the new national goods and services tax (GST) takes effect, banks might see a rise in operating expenses from this, while also gaining through the higher efficiency from the integration of markets.
The effective tax rate for fee-based services at banks might rise to 18 per cent, from the present 15 per cent. This might mean a moderate increase in costs for loan processing and credit card charges. Click to read more
The GST will replace atleast 17 central and state taxes to make way for a single, unified taxation system and will impact almost all industries. The GST will introduce areas that will benefit the customers, whereas there will also be areas where the consumers may have to shell out more. The banking and financial sector is one such area that is being predicted to get a little more expensive for the consumers compared to what it is today after the implementation of GST. GST for banks and financial services will require a shift from centralized compliance to state-based compliance and will have a noteworthy impact on financial products and IT systems. Click to read more
SBI pointed out that a high GST rate will increase the cost of banking services, including those that are for the poor
With goods and services tax (GST) inching closer to the April 2016 rollout deadline, the clamour for exemptions has started.
Joining the race is State Bank of India (SBI), which has sought that banking services be exempted from GST as is the global practice. In its views given to the select committee scrutinising the Constitution amendment bill for GST, SBI pointed out that a high GST rate will increase the cost of banking services, including those that are for the poor. Click to read more
The governor in his Financial Stability Report published by the RBI said that the withdrawal of specified bank notes will impart far reaching changes going forward.
“With respect to demonetisation, it is expected to significantly transform the domestic economy in due course in terms of greater intermediation, efficiency gains, accountability and transparency through increasing adoption of digital modes of payments, notwithstanding the short-term disruptions in certain segments of the economy and public hardship,” added Patel. Click to read more