Thursday, July 20, 2017

Bangalore 205th Lalbagh Flower Show – What will be the % of Digital Transactions vs Cash Transactions?

          The central theme of the Bi-Annual Bangalore Lalbagh Flower Show has been announced. Every Lalbagh Flower Show has a theme around which various installations are planned.

          Normally, the themes revolve around well-known buildings. Replicas of famous buildings are made of Natural Flowers which attract lacs of visitors to the Bi-Annual flower shows.

The Bi-annual Lalbagh Flower Show happens every Republic Day and Independence Day. The Flower Shows last for 10-12 days with 2 Sundays included.

The first Lalbagh Flower Show was held in 1912 and since then the same have been held every six months.

          The organiser’s brain-storm at length to surprise the visitors with eye catching flower installations. Meticulous planning ensures that the visitors savour the installations at leisure and do not over-crowd any section.

          Events are spread around the 240 acre Lalbagh Garden.           This year will be the first show after the Metro Green Line is open to public. This is expected to attract more visitors to the 205th Lalbagh Flower Show.

Poet-laureate Rashtrakavi Kuvempu  has been chosen as central theme of I-Day flower show at Lalbagh.

This Independence Day, the world of Rashtrakavi Kuvempu will come alive in Lalbagh. The annual flower show will be on the theme ‘Kuvempu Malenadu’ to commemorate the 50th year since the Rashtrakavi was awarded the Jnanpith award for ‘Sri Ramayana Darshanam’.

Rashtrakavi Kuvempu will be offered a tribute in flowers at the 205th Lalbagh Flower Show to be held from August 4 to 15. The poet-laureate will be the inspiration for the Independence Day flower show and also it’s central theme, according to officials.

This is the first time a personality has been selected, instead of well-known buildings, as the theme of Lalbagh flower show.

“We are thankful to officials of the Rashtrakavi Kuvempu Pratishthana and various writers of the State who put the proposal across to the Horticulture ministry to have a special on Kuvempu to commemorate the 50th year of conferring of Jnanpith Award on him — a first for Karnataka — for his epic narrative Sri Ramayana Darshanam,” said P.C. Ray, Commissioner, Department of Horticulture.

Following a joint decision by the Mysore Horticulture Society and the department in this regard, Lalbagh officials are now planning an interesting angle to have the best of Kuvempu represented in multiple ways at the show.

The flower show will mirror his personality as a Kannada novelist, poet, playwright, and critic. There will be large spaces for a photo feature and for displaying models of his literary works, the lyrics of Naada Geethe and Raitha Geethe, and his Vishwa Manava Sandesha.

“This time, a mini-Malnad will be created, complete with a replica of the Jog Falls, where the verses of Kuvempu will be aesthetically brought out. Kuvempu’s house at Kuppalli in Shivamogga district will be replicated with flowers and fruits; Kavishaila, the rock monument dedicated to the poet, will also be recreated florally,” said M. Jagadeesh, joint director, Horticulture, Parks and Gardens.

There will be talks and discussions on major works of Kuvempu, including Sri Ramayana Darshanam, Kanooru Subbamma Heggadithi and Malegalalli Madumagalu, apart from recital of his poems, he said.

Manuscripts of major works by Kuvempu, such as ‘Sri Ramayana Darshanam’, ‘Kanooru Subbamma Heggadithi’, ‘Malegalalli Madumagalu’, will be on display. “We will also create models of Kuvempu’s memorial in Kavishaila and of his famous portrait, in which he is sitting on a chair,” Dr Jagdish said.

He said models of Kuvempu’s house and Kavishaila have already been prepared in thermocol and lakhs of Dutch roses will be used for the flower replicas.

Outside the Glass House, cultural events related to the Rashtrakavi will be hosted. Readings of ‘Sri Ramayana Darshanam’ and poetry recitals will be organised in the Marigowda Memorial Hall.

The 205th Lal Bagh flower show is being organised by the department of horticulture, Mysore Horticultural Society, Kannada Development Authority, Kannada and Culture department and Rashtrakavi Kuvempu Pratishtana.

DH News Service, Bengaluru, Jul 14 2017, 2:28 IST

01)  Spectacular failure of ePayments at the Annual Flower Festival at Lalbagh, Bengaluru

02)  Digital Transactions @ Lalbagh Flower Show 2017 @ ONLY CASH PLEASE

03)  11 tips for hassle-free Lalbagh Flower show-Bengaluru experience

04)   Only Hard Cash-No Plastic money for 200th episode of Lalbagh Flower Show 2014

Sunday, July 16, 2017

When will UPI Go-Live on GST Payment Portal?

              The GST Go-Live in India on 1st July, 2017 has led to major structural changes in the functioning of business entities in India.

              One of the focus areas of GST is to reduce the friction associated with payment of Taxes to the Government.

              The less the friction, the quicker Government gets money into its kitty. As payment of taxis is mandatory for the eligible assesses, they will somehow pay at the last moment too. The advantage of payment of taxes prior to the due date is the availability of funds in the government accounts quickly and also minimise the strain on the system. It is observed that bunching payments on the last date, leads to strain on the system, which in turns increases the stress levels.

              Hence, there are multiple options for payment of Taxes due under Goods and Sales Tax Act 2017.

              The present payment options of GST are as under:

Online Mode

A)      Internet Banking -  No Limits
B)      Credit/Debit Card – No Limits

Offline Mode     

A)      NEFT/RTGS – No Limits
B)      Over the counter – Limit – Rs10,000/- per challan per Tax Period

There are 25 Banks authorised for payment of GST through Net Banking and Over the Counter Payments:
The list is as under: (This list can change in the future)

S. No. List of Authorized Banks for Net Banking and Over the Counter Payments
1.           ALLAHABAD BANK
2.           ANDHRA BANK
3.           BANK OF BARODA
4.           DENA BANK
5.           BANK OF INDIA
7.           CANARA BANK
9.           HDFC BANK
10.         IDBI BANK
11.         ICICI BANK LTD
12.         INDIAN BANK
16.         J & K Bank
20.         SYNDICATE BANK
22.         UCO BANK
24.         AXIS BANK
25.         VIJAYA BANK

              Payment of GST through Credit Card/Debit Cards is possible. The following are the list  of Authorized Payment gateways

S. No. List of Authorized Payment gateways for Credit Card/ Debit Card Payment
1.           AXIS BANK
2.           BANK OF BARODA
3.           HDFC BANK
4.           ICICI BANK LTD
5.           IDBI BANK
8.           STATE BANK OF INDIA

               GST registered persons not comfortable with Online Payment mode, can opt for the Offline NEFT/RTGS Payment mode.

              The main advantages of Offline RTGS/NEFT Payment Modes are as under:

01)   GST can be remitted from Non-Agency Banks.
02)   GST can be paid from any bank which offers RTGS/NEFT services.
03)   The pre-printed GST Challan containing the complete details has just be handed over to the branch staff where the registered person is having a bank account.
04)   The bank account details need not be exposed on the internet.
05)   The GST Challans can be handed over to the bank staff by any employee of the registered person. The registered person need not share his/her online banking credentials with anyone. 

Third parties can make payments on behalf of the taxpayer. The third party can make payments by mentioning the correct GSTIN against which the payment needs to be made. This is already part of the GST Challan.

              Please note the service fee for each payment mode is dependent on the Payment mode service provider. Yes, the service fee will also attract GST!!

              It is a very positive step, that there are multiple options to remit the GST. The taxpayer can choose the best option suitable to him/her.

              The most important advantage of Online Payments over Offline Payments is that the successful online payment amount is instantly credited to the taxpayer’s Electronic Cash Ledger.

              In case of Offline Payments, the tax payment has to be executed in the respective bank, and details populated in the GST network. Obviously this will take time.

              National Payments Corporation of India’s(NPCI),  Unified Payment Interface (UPI) is the latest digital payment channel in India. The volumes under UPI are on the increase indicating we Indians are comfortable with UPI. Hence, it is disappointing as the taxpayer does not have the UPI Payment option under online mode.

              It would be a great booster to UPI, if the ‘Pay through UPI’, is activated in the next couple of months. This will also lead to more awareness of Safe ePayments in India.


01)   Press Release August 25, 2016
01)NPCI’s Unified Payments Interface (UPI) set to go live
02)   Press Release July 3, 2017 -- NPCI’s UPI crosses 10 million transaction mark in June


Saturday, July 8, 2017

Shriram IDFC Merger – 7 Gains to Digital Transactions

          The core belief of Shriram Group revolves around this Mahatma Gandhi Saying: “Create a company that creates wealth for society and employment, and run it like a trustee—you are just in charge to create the wealth, not own it”.

          Mandatory Reading Material to understand Shriram Group Philosophy - The Socialist Moneylender

          Shriram Transport holds a leadership position in commercial vehicle financing, while Shriram City Union offers small loans to a large base of customers across micro, small and medium enterprises in rural and semi-rural areas. 

These are new sunrise areas for Safe Digital Transactions in our country. The following gains will be visible once the system integration kicks-off.

Gain No 01) All Shriram Group customers will be encouraged to open Bank accounts with the new entity.  Straight through Internal Direct Debit transactions will be the norm instead of Collections through Cheques/ECS(Debit)/NACH(Dr)

Gain No 02) Truck loan borrowers will be encouraged to explore digital transaction channels rather than cash based. Truck owners have their sphere of influence and will be a key component in spreading the Joy of Safe eTransactions for the new entity. Ziggit Wallet offered by IDFC Bank can be flagship product for spreading the Joy of Safe eTransactions.

Gain No 03) Borrowers will be provided with innovative digital payment options viz; a) Bonus points for on time payment b) Instant roll over facility of working capital loans c) Quick top-up  of existing loans d)

Gain No 04) All customer facing borrower outlets will be nudged to provide digital collections tools at their outlets i.e POS Machines/Wallets etc. Bharat QR Code can be the chief collection digital tool for its Current Account/Overdraft Account/Term Loan retial outlets.

Gain No 05) The collection for Chit Fund instalments is still done through physical cheques as the instalment varies from month to month. An innovative product to digitise Chit Fund collections will be a wonderful morale-booster to the initial supporters of Shriram Group.

Gain No 06) Loan disbursements can be instantly credited to the borrowers accounts with the new entity instead of being routed to accounts held at other banks. This will enable the borrowers to quickly access the loan amounts with NIL Charges.

Gain No 07) All interest and maturity payouts of Shriram Group Debentures/Fixed Deposits can be instantly credited to the customers accounts held with the new entity. This will reduce the TAT and improve the confidence levels of prospective customers.
Additional Reading Material to get a feel of Shriram Group beliefs


B)   Ramamurthy Thyagarajan - Founder at The Shriram Group Pvt Co.

C)   We must support manufacturing even if it hurts profits in the short term

D)   Interview with Ajay Piramal, Chairman, Piramal group, and R Thyagarajan, Founder of Shriram group

E)   Associated with Vysya Bank


G)   Letter from Mr. R.Thyagrajan

H)   Merger with IDFC not an attempt to enter banking through backdoor: Shriram Capital’s Ajay Piramal

Tuesday, July 4, 2017

GST – Tax Invoice Financing - An Introduction

This one feature of GST - "The new tax will require firms to upload their invoices every month to a portal that will match them with those of their suppliers or vendors" -, is enough to trigger a tectonic shift in :

·       Receivable Financing
·       Bills Discounting (Key word Search BILL)
·       Inventory Financing . Commonly known as Dealer Financing in India
·       Working capital financing

All the above have a common aim, to provide access to Sellers or Buyers access to funds at a reasonable rate of interest.  A large number of participants operate in the market to enable Sellers/Buyers to get the best deals. The discovery mechanism for capital safety is a mix of market intelligence and Statement of Accounts.

     In spite of best efforts financing institutions had to face:

§  Defaults
§  Multiple financing of same inventory
§  Fraudulent invoices

In the last couple of years, Online Lending companies too entered the fray. A large group was chasing the same set of clients.

All this is set to change with GST introducing the concept of ‘Invoice Matching’.
The invoice matching mechanism in the goods and services tax (GST) to be rolled out from July 1 will help curb fake bill frauds, Finance Minister Arun Jaitley has said, in a letter to a Congress1 leader.
Jaitley said the model of invoice matching for eligibility of input tax credit of the recipient has been adopted in the GST design after much deliberations in the GST Council.
"One of the most important advantages of adopting this model is for curbing the possible tax evasion on account of fake invoice frauds," the finance minister said in response to the concerns raised by Congress Rajya Sabha MP Digvijaya Singh.
Singh, in his letter to Jaitley, had said multiple tax returns would have to be filed by businesses leading to compliance burden.
This 9 page article explains in details the process of Invoice Matching under GST.
With Invoice Matching being completely online without any physical paper, the incidence of fraudulent invoices falls down drastically.
The broad contours of Invoice Financing under GST is as under::
A new Section 25 entity ‘GST Invoice Financing Corporation of India’, to enable a large number of willing finance companies to service the needs of Sellers/Buyers.
GSTN registered entities if they are willing to avail finance, register on GIFCI
All types of Financial Institutions i.e Scheduled Banks, NBFCs, All India Financial Institutions, Online Lending Companies, High Net worth Individuals register on GIFCI as finance providers.
The tax invoice uploaded in GSTN flows to GIFCI (GST Invoice Financing Corporation of India) Portal  
The finance providers bid the best price. EG :
Ø  Seller – ABC Inc
Ø  Buyer – XYZ Inc
Ø  Tax Invoice Value – INR3,25,000/-
Ø  Payment Terms – 45 days from Invoice Date
Ø  Invoice Date – 15/07/2017
Ø  Invoice Number – 12345
Ø  Finance Provider 1 – FGH Corporation
Ø  Finance Provider 2 – A1D  Corporation
Ø  Finance Provider 3 –  2EB  Corporation
Ø  Finance Provider 4 –   Q54 Corporation

a)     ABC Inc uploads the Invoice No 12345 on GSTN and authorises GSTN to share the Invoice No 12345 details with GIFCI
b)    The finance providers evaluate the sellers background and offer the best quote
Finance Provider 1 – FGH Corporation Quote – Rs3,10,000
Finance Provider 2 – A1D  Corporation Quote – Rs3,18,000
Finance Provider 3 –  2EB  Corporation Quote – Rs3,18,500
Finance Provider 4 –   Q54 Corporation Quote – Rs3,20,000
c)     The buyer XYZ Inc chooses the best offer (Q54 Corporation Quote – Rs3,20,000) and accepts it on GIFCI portal digitally, without any further paperwork.

d)    Q54 Corporation credits Rs3,20,000 to Sellers ABC Inc Bank account.

e)    On the Invoice due date, Buyer XYZ Inc remits Rs3,25,000 to the bank account of Q54 Corporation.

f)     Once the Invoice is financed, the information flows to GSTN and no further financing will be possible by another financier on GIFCI portal
As the market matures, varied products can be offered on GIFCI portal. Rules to handle defaults will be in place.
The invoice can be for supply of physical goods or services.   
Possible timelines for rollout of GIFCI:--
01)  Discussion in GST Council by October 2017
02)  Finalisation of the composition of GIFCI by December 2017
03)  Release of Business Rules of GIFCI by March 2018
04)  GIFCI Go-Live on July 1st 2018
The GST Model law has defined the time limit for issue of GST tax invoices, revised bills, debit notes and credit note.
Following are the due dates for issuing an invoice to customers:
ü  Supply of Goods (Normal case)- On or before date of removal/ delivery
ü  Supply of Goods (Continuous Supply)- On or before date of issue of account statement/ payment
ü  Supply of Services (General case)- within 30 days of supply of services
ü  Supply of Services (Banks & NBFCs)- within 45 days of supply of services
Under the present financing mechanisms, minimal financing is available for ‘receivables’, by Service Providers. In the last few years, there has a massive jump under Service Sector. The outsourcing industry is the best example of Service Sector.
The farming community through can avail financing services through the GIFCI portal. The only condition is that the farmers have to be registered in GSTN.

Yes, Voluntary registration under GST in GSTN is possible.

A business entity may opt itself to get registered voluntarily under GST even if he is not liable to be registered.

All the provisions of GST applicable to a registered taxable person will similarly apply to such a voluntarily registered person also, i.e., he will be treated as a normal taxable person.

The drawbacks under composition levy can be overcome through registration under GST.

Other Advantages of Registration under GST are as under:

v  Legally recognized as supplier of goods or services– This increases the confidence levels of potential customers.
v  Provide input tax credit to customers– As they can issue taxable invoices, they can collect GST. Their customers can take input credit on their purchases.
v  Become more competitive– They will be more competitive than other small business as buying from them will ensure input credit.
v  Take input credit– Voluntarily registered persons can take input credit on their own purchases and input services like legal fees, consultation fees etc.
v  Make inter-state sales without many restrictions– They can make inter-state sales without many restrictions (they will be treated as casual taxable persons).

Thus, nothing stops farmers from being registered under GST. In fact once they are registered under GST, larger opportunities open up for them.

This article is a work-in-progress and as and when the procedures are finalised, updates will be published

I acknowledge the articles of Cleartax @ to widen my GST knowledge base.

GSTN – Goods and Services Tax Network
GIFCI - GST Invoice Financing Corporation of India

Thursday, June 29, 2017

GST – A perfect tool for Small Finance Banks to make inroads into the Restaurant Industry

          This article is a curtain raiser on the myriad opportunities GST provides for Banks to expand the middle of the Banking Pyramid.

          Small Finance Banks have a splendid chance to attract new customers into their fold with innovative banking products to suit GST participants.

          One of the main features of GST is to widen the tax base. GST is expected to embrace a large number of Service Providers and Goods Suppliers into the tax grid.

          All GST Registered entities have to have bank accounts to enable them to simply the GST compliance rules.

          The first article under GST sub-tag highlights the need for restaurants to have transparent bank accounts.

Under the new GST rates announced by the Finance Minister Arun Jaitley, restaurants will be taxed on the basis of their turnover and whether or not the establishment is AC or Non-AC.

The following are GST Rates for Hotel Industry:

  • ·       Restaurants with a turnover of less than Rs 50 lakh will be levied a tax rate of 5 percent.

  • ·       Non-AC restaurants will have a 12% tax rate.

  • ·       AC restaurants will have to shell out 18% tax.

  • ·       Also, five-star restaurants will be charged a luxury tax of 28 percent.

  • ·       Hotels, lodges with tariffs less than Rs 1,000 will be taxed at 5%.

  • ·       Hotel lodges with tariffs between Rs 1,000- Rs 2,500 will be charged 12% tax

  • ·       Hotel lodges with tariffs between Rs 2,500- Rs 5,000 will be charged 18% tax.

This means those restaurants that have a turnover of less than Rs 50 lakh are placed in the 5 per cent rate basket. However Restaurants that have a higher turnover than Rs 50 lakh, but do not have an ACs, will have to pay 12 per cent  GST.

This is where Banks have a major window to convince restaurant owners to open Bank Accounts and be transparent about their turnover i.e below 50 lacs or over 50 lacs.

It will be easy to convince customers that their turnover is over 50 lacs and hence the GST is 12% or vice-versa, if the complete turnover is reflected in Bank accounts.

Once the turnover reflects in Bank accounts, restaurant owners also will be at ease to comply with GST guidelines and be in peace.

As the turnover starts to reflect in bank accounts, restaurant owners will start to avail other banking facilities viz

·       Cheque Clearing,
·       Working Capital requirements,
·       Acceptance of Digital Transactions,   

It is to be seen as to how Small Finance Banks tap this new opportunity. Stand alone Restaurants in India still operate in cash only and GST will nudge them into the banking sector.

          Stand alone Restaurants can be defined as restaurants which offer only Boarding facilities and a proper invoice is given to the customers.

          The most famous restaurants formats in India are Darshinis, fast-food joints  usually run by single families.


GST effect: Be ready for confusion, disputes at restaurants from July 1  


But that does not mean there won't be confusion. Many restaurant owners may find it difficult to explain the complex tax structure to customers who are not well informed about the issue.


Reading Material:

GST: Fresh rate cards await customers at hotels across the country starting July 1 @