Economy & Banking Current Affairs Dec 2015 (Part 1)

India & World Current Affairs December

Arvind Subramanian Submitted GST Recommendations

• A key panel on Goods and Services Tax (GST) headed by the chief economic advisor Arvind Subramanian submitted its recommendations to the government on December 4, 2015.
• The government is setting the stage for building consensus for this important reform to get the crucial constitutional amendment passed in the winter session.
• CEA-headed panel recommends eliminating all taxes on inter-State trade.
• GST panel has suggested standard rate of 17-18%.
• Panel not for specifying GST rate in Constitutional , Amendment Bill.
• Panel recommends bringing alcohol, petroleum within GST.
• Committee suggests revenue neutral rate of 15-15.5% for GST.
• Allocation to. States will depend on revenues raised by Centre and States.
• Two options for States; Single rate of 15% or a range of 17-18%. “
• GST rate on precious metals to be in the range of 2-6%.
• Panel recommended removal of 1 % additional levy.
• It suggests higher GST rates on tobacco, luxury cars, pan masala and aerated drinks.
• The panel kept alcohol, real estate out of GST to achieve 15% rate.

Also Read – Economy & Banking Current Affairs Nov 2015.

Protocol between India and Japan on Avoidance of Double Taxation

• The Union Cabinet Chaired by Prime Minister Narendra Modi has approved signing and ratification of Protocol between India and Japan for amending fhe Double Taxation Avoidance Convention (DTAC) 6n December 2, 2015.
• It was signed between the two countries in 1989 for avoidance of double taxation and for prevention of fiscal evasion, through a Protocol which will facilitate exchange of information, as per accepted international standards, on tax matters including bank information and information without domestic tax interest.
• There is a further provision in the Protocol for sharing any information received from Japan, with authorisation of the competent authority in Japan and vice-versa, in respect of a resident of India, with other law enforcement agencies.

Released Fifth Bi-monthly Monetary Policy Review

• RBI governor Raghuram Raj an kept the repo rate unchanged at 6.75% on December 1, 2015 in its fifth bi-monthly monetary policy review. The Cash Reserve Ratio (CRR) or the amount of deposits banks park with the RBI has also been unchanged at 4%.
• In the meantime, since the rate reduction cycle that commenced in January, less than half bf the cumulative policy repo rate reduction of 125 basis points has been transmitted by banks. The median base lending rate has declined only by 60 bps.
• Rajan has cut the key rates four times by a cumulative 1.25% since January, including the surprise 0.50% cut at the last policy review on September 29; 2015. The Finance Ministry expects the-economy to grow in the vicinity of 7.5% in FY16.

IMF Approved ‘Renminbi’ as a Main World Currency

• The Chinese ‘Renminbi’ was anointed as one of the world’s elite currencies on November 30, 2015. The decision taken by the International Monetary Fund (IMF) that underscores the country’s rising financial and economic theft. It will came into effect from October 1, 2016.
• The move will help pave the way for broader use bf the Renminbi in trade and finance, securing China’s standing as a ,global economic power. Four other currencies also I have the IMF designation, they are the dollar, the euro, the pound and the yen.
• Renminbi which in Mandarin (China’s official language) means the people’s currency was officially introduced by the Communist government of China led by Mao Zedong in 1949 after if came to power. Prior to. Renminbi, Yuan j was the official name of Chinese currency.

CBDT Signed 11 New Unilateral APAs

• The Central Board of Direct Taxes (CBDT), Ministry of Finance has entered into 11 more unilateral Advance Pricing Agreements (APAs) on November 27, 2015 with Indian subsidiaries of foreign companies operating in various segments.
• With this, CBDT has so far signed 31 APAs (30 unilateral and one bilateral). Out of the 11 new APAs, while seven I have rollback provisions contained in them, the other four are for future five years. .
• The APA programme was introduced in the Income-tax Act, 1961 in 2012. The CBDT aims to finalise another 30 to 40 APAs before the end of this fiscal to provide stability I and confidence to foreign enterprises operating in India.

Also Read – Economy & Banking Current Affairs Nov 2015.

HSBC Announced to Shut Down Private Banking Business in India

• Hongkong and Shanghai Banking Corporation (HSBC) announced to shut its private banking business in India on November 26, 2015. This announcement reflected the exit of another foreign bank from the cut-throat business in Asia’s third-largest economy.
• The bank has figured prominently in Indian investigations to crack down on black money, a key poll promise of the NDA government.
• In September, 2015, Swiss authorities passed legislation to amend laws allowing governments to share information with other countries on the basis of ‘stolen data’.

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