Significant Recommendations of the 53rd GST Council Meeting

Significant Recommendations of the 53rd GST Council Meeting

Significant Recommendations of the 53rd GST Council Meeting

KORAH & KORAH, CHARTERED ACCOUNTANTS

This Note has been prepared based on the Press Release dated 22nd June 2024 published by the Press Information Bureau with the title ‘Recommendation of 53rd GST Council Meeting’ along with the clarifications provided by the GST Council

Waiver of interest or penalty or both

  1. Section 128A in CGST Act, 2017 has been inserted to provide conditional waiver of interest or penalty or both on the full payment of tax demand before 31st March 2025, raised through Notices issued under Section 73, for FYs 2017-18 to 2019-20.
  2. However, this waiver does not apply for demand on erroneous refunds.

K&K’s Comments ~ this is a positive move by the Government to address genuine concerns of many taxpayers, especially in the early years of GST implementation. The benefit is confined only to the Section 73 cases, though there are many other cases adjudicated by the Department under Section 74.

Monetary limits for filing of Appeals

  1. Monetary Limits has been fixed for filing of Appeals under GST by the Department in the following manner – (a) GSTAT is INR 20 Lakhs; (b) High Court is INR 100 Lakhs and (c) Supreme Court is INR 200 Lakhs.

 K&K’s Comments ~ currently, there no monetary limits provided under Section 120. This is indeed a welcome move to reduce the mounting litigation.

Change in due-dates for Composition Tax Payers

  1. Change in due date has been proposed for the filing of return in FORM GSTR-4 for composition taxpayers from 30th April to 30th June following the end of the financial year. This will apply for the returns to be filed for FY 2024-25 onwards.

K&K’s Comments ~ this is going to be beneficial for small taxpayers as they would be getting some more time to file their return.

New amendment opportunity in GSTR 1

  1. The GST Council recommended providing a new optional facility by way of FORM GSTR-1A to facilitate the taxpayers to amend the details in FORM GSTR-1 for a tax period and/ or to declare additional details, if any, before filing of return in FORM GSTR-3B for the said tax period.

K&K’s Comments ~ this is the result of continuous efforts of the 53rd GST Council in plugging the tax leakage through improvised compliance processes. The New Form GSTR-1A would now permit the taxpayers to make suitable amendments in liabilities declared in GSTR-1 without waiting
for next month GSTR-1.

Exemption of Accommodation Services

  1. A separate entry in Notification No. 12/2017- CTR 28.06.2017 will be inserted to exempt accommodation services having value of supply of accommodation up to INR 20,000/- per month per person subject to the condition that the accommodation service is supplied for a minimum
    continuous period of 90 days.

K&K’s Comments ~ earlier this exemption was available for stay in PG’s, guest houses etc. where tariff charges per day was less than INR 1,000. However, with withdrawal of this exemption, there was confusion as to whether exemption can be claimed by hostels, PG etc. by treating it as
renting of residential dwellings.

The Council has now extended benefit for such hostels, PG etc. where total amount charged is less than INR 20,000/- per month and total period of stay is  minimum 90 days. This is a big relief to this industry and students / labourers who migrate to bigger cities for educations or jobs.

Time limit to avail ITC in case of RCM supplies

  1. The Council clarified that in cases of supplies received from unregistered suppliers, where tax has to be paid by the recipient under reverse charge mechanism (RCM) and invoice is to be issued by the recipient only, the relevant financial year for calculation of time limit for availment of input tax credit under the provisions of section 16(4) of CGST Act is the financial year in which the self-invoice has been issued by the recipient.

  K&K’s Comments: suppose a supply liable to RCM is received in FY 2019-20 but the taxpayer pays the tax under RCM thereon in FY 2023-24 along with interest during Department Audit, then the Council has clarified that time limit in such case would be applicable from the date of raising of
self-invoice i.e. the date of payment of tax liability. Hence, all past disputes would get resolved.

 

The Kerala Budget – 2024

The Kerala State Budget - 2024
The Kerala Budget – 2024
KORAH AND KORAH, CHARTERED ACCOUNTANTS

The Kerala model of development, with its focus on achieving a high human development index and progressing in sustainable development goals, has played a crucial role in its upward trajectory

The finance minister declared that government departments will implement a strategy of destroying used cars and furniture. He went on, estimating revenue of ₹200 Crores.

  • Liquor prices to go up further   

Gallonage fee on Indian Made Foreign Liquor to be increased by ₹10 per litre. An additional revenue of ₹200 Crores expected.

  • Funds allocated for the NoRKA Department Project for Returned Emigrants Scheme
  1.  The NoRKA Department Project for Returned Emigrants project, which was established to assist returnees in earning a living, has been allocated ₹25 Crores.
  2. Additionally, ₹44 have been set aside for the restoration program that would be applied to these sections.
  • Further investments to boost tourism at 20 spots
  1. Steps will be adopted to attract investments of ₹50 Crores towards the tourism industry. 20 destinations will be developed for the purpose.
  2. In the first phase, Varkala, Kollam, Munroe Thuruth, Alappuzha, Munnar, Fort Kochi, Ponnani, Beypore, Kozhikode and Bekal have been identified for this  purpose.
  •         State to attract investments in higher education
  1. A new task force of Pravasi academic experts to be formed to improve the quality of higher education.
  2. Expert meet from Europe, US, Singapore and Middle East will be held in May and June. A higher education transformation initiative global conclave has also been planned.
  3. State will explore the feasibility of setting up foreign universities in Kerala.
  4. Each district will get one upgraded model school. A new grading system will be implemented to evaluate school quality, accompanied by the introduction of residential training programs for teachers.
  5. Furthermore, the General Education Department is set to provide training in artificial intelligence (AI) as part of the state’s proactive approach in  addressing challenges presented by AI and deepfake technology.
  • New Fishing Harbour at Pozhiyoor

A new fishing harbour to come up at Pozhiyoor in Thiruvananthapuram. INR 5 Crores allocated as a preliminary measure.

  • 5 Lakh Houses to be built by next year

INR 1132 Crores allocated for LIFE housing project. 3,71,931 houses have been completed after spending INR 17,104.84 Crores.

  • Safari Parks to be set-up in North Kerala D

Safari parks will be set up in North Kerala to boost tourism. Park will be set up in Nadukani in Taliparamba, Kannur, and a Tiger Safari park in Muthukad in  Kozhikode.

  • Malabar International Port to be developed

An allocation of INR 9.65 Crores have been made for developing the Malabar International Port that is bound to benefit north Kerala and south Karnataka.

  • KSRTC to get new BS6 Standard Buses

The state road transport gets an allocation of INR 128.54 Crores. It will get new BS6 standard buses.

  •  Boost for Startups
  1. INR 10 Crores earmarked for expanding KSUM’s (Kerala Startup Mission) LEAP Centres state-wise.
  2.  INR 6 Crores allocated for startup support initiatives under the “Innovation Acceleration Scheme”
  3.  INR 9 Crores provided as interest subvention for Chief Minister’s Special Assistance scheme for benefiting MSME’s and startups.
  4.  INR 20 Crores earmarked for establishing the Technology Innovation Zone in Kalamasseri KINFRA Hi-Tech Park.
  5.  ‘Unnathi’ – a new scheme to promote entrepreneurship among the ST community, providing financial assistance of INR 10 lakhs to startups.
  6.  KSUM to set up work pods in scenic Kerala locations, attracting global entrepreneurs with innovative ideas.
  • Other Proposals
  1. Sabarimala master plan gets INR 27 Crores.
  2. The MSME sector will receive INR 215 Crores.
  3. The cashew sector has been earmarked INR 53 Crores.
  4. Operation Breakthrough, a project to address flash floods in Kochi city during rains, has been allocated INR 10 Crores.
  5. The Zoological park in Thrissur will be developed to an international level with an allocation of INR 6 Crores.
  6. A Tiger safari park will be established at Muthukad in Kozhikode.
  7. INR 2 Crores has been set aside for the primary expenses of the Naadukani Safari park project, which is estimated to cost INR 300 Crores.
  8. INR 83 Crores have been allocated for soil protection, and INR 78 Crores has been set aside for the safe vegetable project.
  9. INR 40 Crores has been allocated for the Punergeham project, aimed at rehabilitating those living in the coastal areas facing severe erosion. This is double
    the amount allocated in the previous budget.
  10. The government claims to have created 2.36 lakh job opportunities in the agricultural sector.
  11. An investment of INR 200 Crores is envisaged for the Digital University.
  • Concluding Remarks
  1. Despite the Union government’s efforts to stifle Kerala’s economy, Finance Minister K.N. Balagopal asserts that the state’s economic resilience cannot be
    undermined.
  2. Balagopal likens Kerala’s economy to a sunrise, rapidly ascending due to advancements in science and technology.
  3. The Kerala model of development, with its focus on achieving a high human development index and progressing in sustainable development goals, has played a crucial role in this upward trajectory

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New Section 43B (h) of the Income Tax Act, – Boon or Bane ?

New Section 43B (h) of the Income Tax Act, – Boon or Bane ?

KORAH AND KORAH, CHARTERED ACCOUNTANTS

The Central Government through an amendment in the Income Tax Act, has sought to address the issue of delayed payments that the small-scale sector faces on its sale invoices. Will it adversely affect you?

 

A. Introduction

The Central Government through an amendment in the Income Tax Act, has sought to address the issue of delayed payments that the small-scale sector faces on its sale invoices. While the stated objective of this amendment is laudable, it could have an unintended detrimental effect on various industries & sectors, which would in turn negatively impact the small-scale sector in a major way due to a drop in sales orders for their products & services. To understand the issue, let’s first understand how Section 43B of the Income Tax Act,1961, works.

B. Understanding Section 43B

Section 43B lists certain expenditure like duties, cess, fees, employer’s contribution to PF, gratuity, interest on Bank loans and so on, which as per this Section, can be claimed as business expenditure for arriving at your income tax dues, only after the payment or remittance of such expenditure is done.

In case the business entity has not remitted or paid the amount as on the last day of the Financial Year viz 31 March, this Section gives time till the due date of filing the Tax Return applicable to the Business entity. For easy understanding, let’s take an example:

 

ABC Pvt Ltd has shown Rs 25 lakhs as Gratuity expenses during FY 23-24. However as on 31 March 2024, it has not made this payment. If it however, makes payment on or before 31 Oct 2024, which is the due date for filing the Income Tax Return of companies, then ABC Pvt Ltd would be able to claim the Gratuity as a legitimate business expense for arriving at the taxable profit for FY 2023-24.

C. Section 43B(h) relating to payments to Micro & Small Enterprises

An amendment which is creating heartburn among business owners has been done by inserting clause (h) in Section 43B.

Clause (h) states “any sum payable by the assessee to a micro or small enterprise beyond the time limit specified in section 15 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 (27 of 2006),”

On a quick reading of this clause, it would appear that like the other expenditure items listed in the other clauses of Section 43B, these amounts payable to micro & small enterprises, will, if not paid before the year end, get the extended time for payment, till the due date of filing the Income Tax Return.

However on a further reading of the Section, we find that this benefit of extended time will not apply to this new clause (h). In other words, if there are any amounts remaining payable to micro & small enterprises as on 31 March & if they are not paid within the time limits specified in section 15 of the MSMED Act, then these amounts would be disallowed as business expenses, while computing the tax payable of your Business.

This could result in huge tax & interest liability for FY 2023-24, if your Business has large outstanding payables to micro & small enterprises as on 31 March 24.

D. Applicability & Time Limits specified in the MSMED Act, 2006

You may have seen from the above, that clause (h) refers to micro & small enterprises as defined under the MSMED Act.

Those entities with an investment in Plant & Machinery below INR 10 Crores & an Annual Turnover of INR 50 Crores or less, will come under this definition. Many of your Vendors would therefore, based on these thresholds, be ‘Micro & Small’ enterprises. One major exception to this would be ‘Traders’, since only Manufacturers & Service Providers are covered under the definition of ‘enterprise’ as per the MSMED Act.

 

Now, coming to time limits to make the payments. Well, this depends on whether you have an agreement with the micro/small vendor. If there is an agreement, then the time limit would be the time specified as per the Agreement However, in such cases it cannot exceed 45 days (even if the Agreement stipulates a longer credit period). In case there is no Agreement, then the time limit for settling invoices is as short as 15 days!

E. The Pain Points

Various Industry Associations have sent appeals & memoranda to the Prime Minister, Finance Minister & the Industries Minister, requesting re-consideration of the strict timelines for payment to Vendors, which will result in large amounts of expenses being disallowed, which in turn will mean huge Tax & interest liabilities.

Many large businesses who usually enjoy a 60-to-90-day credit period, have started cancelling orders that they had placed on micro & small enterprises during the recent past.

This in turn has had a huge negative impact on such small-scale vendors, who anticipating the usual stream of orders had made purchases of raw materials & consumables.

Hence an amendment that should have helped such vendors improve their liquidity, could actually result in plummeting sales, which in turn will drastically affect their liquidity position !

F. As a business person, what steps should you take now?

  1. First identify your vendors, who are Manufacturers or Service Providers.
  2. Then check with them, if they are Micro or Small enterprises as per the thresholds of investment in Plant & Machinery and Turnover stipulated in the MSMED Act.
  3. If yes, obtain a Declaration from them confirming their status.
  4. Thereafter, make sure you clear their outstanding balance before 31 March 2024 to the extent possible, especially older invoices which would cross the 45-day limit as on 31 March.

 

Changes in GST from 1st October 2023

Changes in GST from 1st October 2023

Changes in GST from 1st October 2023

KORAH AND KORAH, CHARTERED ACCOUNTANTS

 

Composition Dealers can now make intra-state supplies of goods through E-Commerce Operators
  • Small taxpayers (having an aggregate turnover of up to INR 1.5 Crores in a year) have an option to pay GST under the Composition Scheme at 1%/6% instead of the normal rates subject to certain conditions.
  • One such condition was the fact that these taxpayers cannot supply goods through E-Commerce Operators.
  • However, now, Composition Dealers are allowed to make intra-state supplyof goods through E-Commerce Operators.

 

No ITC (Input Tax Credit) on goods purchased or/and services availed in relation to CSR activities
  • ITC is blocked in respect of goods purchased or/and services availed in relation to CSR (Corporate Social Responsibility) activities as provided for under Section 135 of the Companies Act, 2013.
  • However, for any voluntary CSR activities (other than what is mandated by the Companies Act, 2013), ITC shall be available.

 

Time limit for filing belated GST Returns
  • Provisions have been inserted in the Act to restrict a registered person from filing GSTR 1 (return for outward supplies), GSTR 3B (return for payment of GST), GSTR 9 (annual return) and GSTR 7 (TDS return) after the expiry of a period of 3 years from the due-date of furnishing the return(s) for the said period.

 

No GST liability on RCM (Reverse Charge Basis) on Ocean Freight Services
  • In respect of services provided or agreed to be provided by a person located in a place outside India to a person in India by way of transportation of goods by a vessel, there will be no IGST leviable on such services on RCM basis.
  • Earlier, the IGST rate on such services was 5%
Zero-Rated Supplies’ to include supplies made to SEZs (Special Economic Zones) if only made for ‘authorized operations’
  • Now, supplies to SEZs would be treated as ‘Zero-Rated Supplies’ if only made for authorized operations.
  • Suppliers in DTAs (Domestic Tariff Areas) are required to obtain an endorsement from the jurisdictional officer of SEZ for the matter of “authorized operations” (for manufacturing or rendering of services) in case of supply of goods and services to SEZ through the SEZ online portal.
  • Though the same was mentioned in the Rules, it was not included within the provisions of the Act.
GST of 28% on Online Gaming and Casinos
  • Registration is now mandatory for a person supplying online money gaming services from outside India to a person in India. Form GSTR-5A is also required to be filed on a monthly basis once registered.
  • Tax @ 28% has been levied for such services and the supplier of such actionable claims has to pay GST on forward charge. In case, advances are received for such services from the players, GST is liable on such advances received

  • The value of such services shall be the total amount paid or payable to or deposited with the supplier (including cryptocurrency) by or on behalf of the player. Further, any amount returned or refunded by the supplier to the player for any reason shall not be deductible from the value of supply of online money gaming.
Union Budget 2023

Union Budget 2023

THE UNION BUDGET 2023

KORAH AND KORAH, CHARTERED ACCOUNTANTS

 

Do not Skip! – The Disclaimer
  • This presentation summarizes the important proposals in a lucid manner based on the Finance Bill which was presented in the Parliament on the 1st of February 2023. These proposals are subject to further amendments before they are enacted.
  • This presentation is not an offer, invitation, or solicitation of any kind. Utmost care has been taken while preparing this presentation, the views and opinion expressed are that of the writers.
  • The readers are requested to kindly verify and check the facts before acting on them as this presentation is meant for general guidance and no responsibility for loss arising to any person acting or refraining from acting, as a result of any material contained in this presentation will be accepted by the Firm or its associates
  • It is recommended that professional and expert guidance or advice is to be taken based on the specific facts and circumstances. This presentation does not substitute the need to refer to the original pronouncements.
  • This compilation is meant only for the person to whom it is sent and any unauthorized reproduction of the whole or part of the compilation stated above without the writers’ prior permission is not allowed.

 

Vision for “Amrit Kaal” – to make India an empowered and an inclusive economy
  • The vision for “Amrit Kaal” (meaning ‘the best time to begin new work’) is centered around the following 3 goals:
  • In order to guide the country towards “Amrit Kaal”, the Budget has laid down 7 priorities:
Sector-wise breakup of the important Budget’23 Proposals

  1. Agriculture, Fisheries and Co-operatives

2.Education, Healthcare and Housing

3.Infrastructure and Logistics

4.Urban Infrastructure and Digitization

5.Manufacturing

6.Green Growth

7.Ease of Doing Business

8.Financial Services Sector

The Most Significant! – Income Tax Proposals
  • Generally, the proposals of The Finance Bill, 2023 will be applicable from 1st April 2023 i.e., for the Assessment Year (AY) 2024-25 onwards unless and otherwise stated. A detailed analysis of the direct tax proposals are as follows:

A.On Personal Income

  1. Change in tax slabs and tax rates under the New Regime
  • Section 115BAC – income tax slabs have been enhanced under the new regime:
  • The revised slabs have also been extended to association of persons (AOP), body of individuals (BOI) and artificial juridical persons.
  • There has been no change in the limits under the Old Regime.

2.Change in tax rebate under the New Regime

  • Section 87A – earlier, the tax rebate applicable for both old and new regimes was INR 12500 or tax payable – whichever lower.
  • Now, specifically for the new regime the tax rebate has been increased to INR 25000. In other words, if you have total taxable income up to INR 7 lakhs, then under the new regime, you will not end up paying any income tax.

 

3.Standard Deduction now available for New Regime

  • Section 16 (ia) – earlier, standard deduction was not available for the new scheme. INR 50000 was available as standard deduction under the old scheme.
  • However, now, standard deduction of INR 50000 can be availed under the new tax regime also.

 

B.For Co-operative Societies

  1. Concessional rate of tax
  • Section 115BAE – earlier, 22% concessional rate could be opted for by all co-operative societies. Now, new manufacturing co-operative societies can opt for the concessional rate of 15%
  • However, this benefit will only become available if the new manufacturing co-operative societies are set-up on or before 31stMarch 2024.
  • Also, once opted for the concessional rate, the same cannot be withdrawn.

2.TDS on Cash Withdrawals

  • Section 194N – 2% TDS would be deducted by banks if cash withdrawals by the recipients during a year exceeds INR 1 Crore. However, if the recipient is a co-operative society, then the limit is enhanced now to INR 3 Crores.

3.Cash Loan & its Repayment

  • Sections 269SS and 269T – penalty shall be imposed if any person accepts from another person, any loan/deposit in cash for INR 20000 or more. Similarly, penalty shall be imposed if any person relay any person, any loan/deposit in case for INR 20000 or more.
  • These limits have now been enhanced to INR 2 Lakhs if such loans are taken/repaid by Primary Agricultural Credit Societies from/to its members

 

C.For Businesses & Professions

  1. Limits for Presumptive Scheme
  • Sections 44AD & 44ADA – presumptive taxation scheme can be opted by small taxpayers (44AD – for businesses & 44ADA – for professions) with the benefit of paying lower tax plus doing away with the need to maintain books of accounts and undergo a tax audit.
  • The turnover limits for the above is fixed at INR 2 Crores for businesses and INR 50 Lakhs for professions.
  • Now, these limits have been enhanced to INR 3 Crores and INR 75 Lakhs respectively
  • The rider here is that these limits shall only be applicable if the total of cash receipts in a year for the business/profession should not exceed 5% of total turnover/professional receipts.
  • In other words, if the total of cash receipts exceed 5%, then the old limits of presumptive scheme shall become applicable.

 

2.Payments to Micro & Small Enterprises

  • Section 43B – certain payments listed under this Section shall be allowed as a deduction for tax computation only when the same is paid before the return filing due-date.
  • However, in the case of payments pending for more than 45 days to Micro (turnover up to INR 1 Crore) and Small enterprises (turnover up to INR 10 Crores), then the same shall not be allowed for deduction even if paid before the return filing due-date.

 

D.For Charitable Organizations

  • If one charitable organization donates to another charitable organization, then only 85% of such donations shall be considered as application of income for the donor charitable organization.
  • Application out of corpus or loan shall be allowed as application for charitable or religious purposes only if the same is put back into the corpus or the loan is repaid within 5 years from the application.
  • Form 9A (Form for application) and Form 10A (Form for registration) now needs to be filed within 2 months before the date of filing the tax return.
  • Tax exemptions can be claimed by charitable and religious trusts only if the return of income is filed before the due-date

 

E.Other Significant Changes

1. Online Gaming

  • Section 115BBJ – winnings from online gaming to be now taxed at flat 30% without any deductions.
  • Also, tax to be deducted on such winnings at prescribed rates with effect from 1st July 2023.

2. SEZ Unit Exemption

  • Section 10AA – additional conditions have been proposed in order to claim 100% business profit exemption for SEZ Units –

A) exemption can only be claimed if the return of income has been filed and;

B)the foreign realizations should come into India within 6 monthsfrom the end of the relevant year.

3. Start-ups

  • Section 80-IAC – tax holiday for registered start-ups have now been increased by a year i.e. startups incorporated before 31st March 2024 can now claim 100% deduction from business profits.
  • Earlier, it was up to 31st March 2023
  • Section 56(2) (viib) – hereafter, even if a non-resident is issued shares by a private limited company wherein the issue price is more than fairmarket value, then the excess shall be taxed.

 

4. Overseas Tour

  • Section 206C – earlier 5% was the tax to be collected by the receiver in the case of:

A) overseas tour packages without any limits

B) educational and health purposes if the amount paid/payable exceeded INR 7 Lakhs in a year.

  • However, now, the rate has been increased to 20% in both the above cases.

 

5. Life Insurance

  • Section 10(10D) – it is now proposed to tax the income from insurance policies having premium or the aggregate premium exceeding INR 5 Lakhs in a year. Such income is proposed to be exempt if received on the death of the insured person.
  • While computing the taxable income, the premiums paid shall be allowed as a deduction if not claimed earlier.

 

6. Cap on Capital Gain Exemption on purchase of new residential
house property

  • Sections 54 & 54F – the existing provisions provide for exemption from long-term capital gains in the case of sale of a residential house (Section 54) and sale of a capital asset (Section 54F) and when the gains/proceeds are invested in another residential house property.
  • Now, the maximum exemption of capital gains in both the above cases have been capped at INR 10 Crores.
  • In other words, any amount in excess of INR 10 Crores would be
    subject to Capital Gains tax.

 

Expensive or Cheap? – Indirect Tax Proposals

  • Composition tax payers (small tax payers under GST) are permitted to make intra-state supplies of goods through e-commerce operators.
  • ITC in respect of goods and services purchased for CSR activities have been blocked and cannot be availed now.
  • Penalty now imposed for E-commerce operators in the case of any non-compliance of any provisions under the GST Law.
  • Effective from 2nd February 2023, a National Calamity Contingent Duty has been increased on specified cigarettes, making it more expensive.
  • Here are the changes in Basic Customs Duty (BCD) for certain items/industries:

 

The Economic Survey FY 2022-23

The Economic Survey FY 2022-23

THE ECONOMIC SURVEY FY 2022-23

KORAH AND KORAH, CHARTERED ACCOUNTANTS

 

INDIAS PERFORMANCE IN FY 2022-23

Do not Skip! – The Disclaimer
  • This presentation summarizes the important points from the Economic Survey of FY 2022-23 which was tabled by the Finance Minister, in a lucid manner.
  • This presentation is not an offer, invitation, or solicitation of any kind. Utmost care has been taken while preparing this presentation, the views and opinion expressed are that of the writers.
  • The readers are requested to kindly verify and check the facts before acting on them as this presentation is meant for general guidance and no responsibility for loss arising to any person acting or refraining from acting, as a result of any material contained in this presentation will be accepted by the Firm or its associates.
  • It is recommended that professional and expert guidance or advice is to be taken based on the specific facts and circumstances. This presentation does not substitute the need to refer to the original pronouncements.
  • This compilation is meant only for the person to whom it is sent and any unauthorized reproduction of the whole or part of the compilation stated above without the writers’ prior permission is not allowed.

 

The Real Figures! 
  • India to remain the fastest-growing major economy in the world.
  • Recovering from the pandemic-induced contraction, the Russian-Ukraine conflict and inflation, Indian economy is staging a broad-based recovery across sectors.
  • As of now, India is the 3rd largest economy in PPP (purchasing power parity) terms. PPPs are simply price relatives that show the ratio of the prices in different currencies for the same good/service.
  • As per the World Economic Outlook released by the International Monetary Fund (IMF), growth in India is set to decline from 6.8% in the calendar year (CY) 2022 to 6.1% in CY 2023 before picking up to 6.8% in CY 2024.
  • However, the Economic Survey 2022-23 projects the baseline GDP growth at 7% for the year ending 31st March 2023 and a decline to 6.5% in FY 2023-24
  • The Reserve Bank of India (RBI) projects inflation at 6.8% in FY 2022-23, which is below its target range.
  • Another growth driver of the Indian economy is the increased spend by the Government on capital expenditure, which increased by 63.4% in the first 8 months of FY 2022-23.
  • Enhanced employment generation has been observed and the urban
    unemployment rate has declined. Higher net registration numbers have been seen in Employee Provident Fund scheme.
  • Credit to Micro, Small and Medium Enterprises (MSMEs) has grown by an average of around 30% since January 2022 and credit to large industry has been showing double-digit growth since October 2022.
  • The Indian Pharmaceuticals industry plays a prominent role in the global pharmaceuticals industry. The cumulative FDI in the pharma sector crossed the $20 Billion mark by September 2022.
  • The Economic Survey cautions that the challenge of the depreciating rupee, although better performing than most other currencies, persists with the likelihood of further increases in policy rates by the US Fed.
  • There has been a surge in the growth of exports in Financial Year 2021-22 and the first half of Financial Year 2022-23. This has induced a shift in the gears of the production processes from mild acceleration to cruise mode.
  • More than 220 crore COVID vaccine doses administered as on 6th January, 2023.
  • The services sector is expected to grow at 9.1% in Financial Year 2022-23, against 8.4% in Financial Year 2021-22.
  • Hotel occupancy rate has improved from 30-32% in April 2021 to 68-70% in November 2022.
  • Tourism sector is showing signs of revival, with the foreign tourist arrivals in India in Financial Year 2022-23 growing month-on-month with resumption of scheduled international flights and easing of Covid-19 regulations.
  • As of November 2022, India is the 6th largest foreign exchange reserve in the world.