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28 December, 2009
Finnomics.....
where learning peaks!!!
Also Contributed
by: All you need to know about Goods and
HariharaPrasath G. Services Tax (GST)
- PGDM 1st year
Abhinav Gupta
By Neha Harichandani, MMS - 1st year
- PGDM 1st year
The introduction of a countrywide GST will truly make our nation a com-
Manushi Paul mon economic area. This is a tax to be paid by the final consumer, and
- PGDM 1st year will eliminate all the existing indirect taxes – central excise tax, services
tax, central and state sales tax, and maybe even octroi. In the current
Amit Wadhwa
- PGDM 2nd year system, we often end up paying tax on tax (for instance, sales tax on ex-
cise), leading to a cascading of taxation and much inefficiency. The GST
will remove inefficiency and lead to a lowering of tax burden.
Background on GST:
GST
INSIDE THIS ISSUE: The goods and services tax (GST) is a comprehensive value-added tax
(VAT) on goods and services. France was the first country to introduce
GST this system in 1954. Today, it has spread to over 140 countries.
Wrap up — 2009 Through a tax credit mechanism, GST is collected on value-added goods
WPI and services at each stage of sale or purchase in the supply chain. GST
Sector SNAPSHOT paid on the procurement of goods and services can be set off against
Whizz Quiz that payable on the supply of goods or services. But being the last per-
son in the supply chain, the end consumer has to bear this tax and so, in
What is….?
many respects, GST is like a last-point retail tax.
These were some of the events which will be remembered forever, some as sour pills and some as cher-
ished memories. With this, we at Finance Forum close the curtains on the year past, and welcome 2010
with open arms, with hopes of a brighter future....
VOLUME 1, ISSUE 3 PAGE 3
Financial Services
RBI reviews the steps taken by ICICI Bank sells electronic pay-
commercial banks to reduce their ment terminals
MF exposure ICICI bank has hived off its network of over
Expressing its concerns over circular trading, 1.5 lakh electronic swipe machines, its
in which money parked by banks in mutual network of electronic point of sales (PoS)
funds comes back to banking system in the terminals that accept credit and debit card
form of borrowings from the overnight mar- payments to a separate company — ICICI
ket, RBI had asked banks to set an internal Merchant Services. First Data has bought
limit on their exposure to mutual funds. an 81% stake in the company which has
been valued at a little over $90 million.
Infrastructure Sector
Infrastructure output grows GTL Infra all set to buy Aircel Tower biz
5.3 pc y/y this November GTL Infra outbid Tata-Quippo earlier this month for
The growth in the infrastructure sector Aircel Cellular’s passive infrastructure valued at
has made the ambitious GDP growth around $1.8 billion. GTL Infra is now working on a
rate of 7-7.5% in 2009-2010 seem Rs 5000 crore debt financing with State Bank Of
closer to reality. The six industries India. The rest would be paid in cash by GTL. The
comprising this sector contributes company currently has 10000 towers , the acquisi-
26.7% to the overall Index for Indus- tion would take its portfolio to 22,000 towers bring-
trial Production (IIP). The growth has ing it close to Tata-Quippo combine. Besides, it will
been triggered by a robust increase in also get Aircel as a customer for its independent
production of steel and cement. tower business. The news has seen the GTL share
prices soar by 5% to Rs 38 per share.
We are highly encouraged from the responses to the quizzes and articles of the
previous issue. We invite all SIMSRITES to sail with us on the boat of Finance Forum to
discover new shores in the ocean of the financial world. Keep writing to us at
financeforum@simsrites.com