Category Commerce

What is GST?

Earlier, there were multiple taxes levied both at the central and the State level which often confused the taxpayers.

India's gross GST revenues was the highest-ever in April at ?1,87,035 crore. It is 12% higher than the same month last year, which was the previous highest tax tally of ?1.67 lakh crore.

Let us know more about GST that simplified our tax regime.

Origin

The concept of GST was introduced in the Budget speech on February 28, 2006. Though initially it was proposed that GST would be introduced on April 1, 2010, GST was introduced on July 1, 2017, under the 'one nation, one tax initiative. Its aim was to bring different types of taxes under a single-tax system.

To implement GST, Constitutional (122nd Amendment) Bill was passed by Rajya Sabha on August 3, 2016. The Prime Minister Narendra Modi-led Cabinet approved setting up of GST Council on September 12, 2016. The 49th GST Council meeting took place on February 18, 2023 in New Delhi.

What is GST?

The Goods and Services Tax (GST) is levied on the supply of goods and services, which is paid by the consumer. It is imposed in the State where the goods and services are consumed and not where they are manufactured.

However, some goods and services are exempted from GST and are subjected to a State's existing taxes such as the Value Added Tax (VAT), which is paid at every stage of value addition in the supply chain. These levies are paid at each stage of the production process by the consumer.

As the GST is a destination-based tax there are various types of GST-CGST (levied by the Centre), SGST (levied by the State), UTGST (by the Union Territory), and IGST (levied for the interstate supply of goods by the Centre).

Benefits

Earlier, there were multiple taxes levied both at the central and the state level which often confused the taxpayers. The introduction of GST has eased the manufacturer's job of compiling different taxes into one. Besides, it has brought India at par with the global market by following a universally accepted tax regime. With the implementation of IGST, the manufacturers no longer have to pay CST (Central Sales Tax) and other taxes.

Difference between GSTN and GSTIN

GSTN (Goods and Services Tax Network) is a platform that manages the IT system of the GST portal. It is used by the government to track financial transactions and other tax informations. Meanwhile, GSTIN is a 15-digit tax registration number that is provided to manufacturers, traders, stockists, wholesalers, and retailers.

FORMAT OF GSTIN

*First two digits of GSTIN is the State code

*The next 10 digits denote the PAN or Permanent Account Number of business entity/proprietor

* The 13th digit is based on the number of registrations done by the business entity within a State

*14th digit is "Z" by default

* The last digit is the check code, which can be a number or a letter.

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Why has the RBI withdrawn Rs. 2000 notes?

The Reserve Bank of India recently announced its decision to withdraw the Rs. 2000 notes from circulation. The public has been advised to deposit and/or exchange these banknotes on or before September 30. These notes were introduced in November 2016 as part of demonetisation. Let us know more about demonetisation.

Demonetisation

On November 8, 2016, Prime Minister Narendra Modi announced the demonetisation of Rs. 500 and Rs. 1000. The move was made to prevent the accumulation and circulation of black money in the country.

The sudden decision to ban these notes caused anxiety and panic among the public. Banks and ATMS witnessed huge queues with people waiting for several hours to exchange / get their cash.

The case of Rs. 2000 notes

The Rs. 2000 notes were introduced in 2016 to meet the currency requirement after Rs. 500 and Rs. 1000 notes were withdrawn. The printing of Rs. 2000 notes was stopped in 2018-2019 once there were enough notes of other denominations. Recently, the RBI announced that in pursuance of the Clean Note Policy, the Rs. 2000 notes will be withdrawn from circulation.

There is a difference between demonetisation and withdrawal of currency. While demonetisation is the process of removing a monetary unit’s legally accepted status, withdrawing a currency from circulation does not affect their legal tender status. This means that while Rs. 2000 will be valid for use in business and exchange transactions, the notes will be set aside when they arrive at banks to be deposited in the RBI and will no longer be distributed to the general public.

Clean Note Policy

The Clean Note Policy, first announced in 1999, seeks to provide citizens high-quality currency notes and coins with better security features, while removing worn-out notes from circulation. For instance, on Rs. 2000 notes, the security features include readable and windowed security thread alternately visible on the obverse with the inscriptions ‘Bharat (in Hindi), ‘2000’, and ‘RBI’.

In 2018, a new Clean Note Policy was announced to make digital payments more secure.

In 2005, the RBI withdrew all banknotes issued before 2005 from circulation, as they had fewer security features than banknotes printed after 2005. The notes issued before 2005 do not have on them the year of printing on the reverse side.

In 2002, the RBI inaugurated Currency Verification and Processing (CVPS) Machines for checking numerical accuracy and genuineness of the currency notes.

The CVPS system is capable of processing 50,000 – 60,000 soiled notes per hour. The system, along with the Shredding and Briquetting System for destruction of soiled notes, helps faster withdrawal of soiled and mutilated notes from the market. These machines are installed at both regional and zonal RBI offices.

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What is the meaning of term ‘Recession’?

A recession is a period of slowdown in trade and economic activities. It is identified by a fall in GDP, business profits and employment during successive quarters, that is for at least six months in a row. Recessions occur when there is a significant drop in spending due to reasons like the COVID pandemic which caused many to lose their jobs, and when there are unfair business practices. To tackle recession, governments have to infuse more money into the system, improve credit flow to industry, control price rise, address problems of unemployment to revive spending, reduce interest rates, and decrease taxation. With the Russia-Ukraine war escalating, the world is witnessing economic and humanitarian disasters. Struck by unprecedented sanctions, Russia has already plunged into a deep recession. As a result of the war, the global economy is also weakening with disruptions in trade and food, and soaring energy prices, all of which contribute to rising inflation.

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What is UPI and how it works?

UPI saves people from Cash on Delivery hassle and running to an ATM

As Prime Minister Narendra Modi pushes for a digital India, many of us may have used Unified Payments Interface (UPI). But do you know what it is?

What is UPI?

UPI is a system that allows multiple bank accounts into a single mobile app, thus, merging several banking features, seamless fund routing, and merchant payments under one umbrella.

The UPI has made bank-to-bank money transfers simple and secure, enabling everything from purchasing vegetables from roadside vendors to sending money to friends and relatives.

UPI was launched by the National Payments Corporation of India (NPCI) on April 11, 2016, by Raghuram G Rajan, then-Governor of RBI, at Mumbai.

Features

Some of the unique features of UPI is that it allows immediate money transfer through mobile phones round the clock 365 days.

Besides, it saves people from Cash on Delivery hassle, running to an ATM, or rendering exact amounts.

People can also pay multiple bills from a single mobile app via Utility Bill Payments, Over the Counter Payments, QR Code-(Scan and Pay) based payments.

As per the latest guideline issued by the NPCI, a person is allowed to use UPI to send a maximum of Rs 1 lakh per day. The restriction varies from bank to bank.

Besides, there is a cap on the total amount of UPI transfers that can be made in a day. Twenty transfers are permitted per day using UPI.

HOW TO REGISTER IN UPI ENABLED APPLICATION

Steps for Registration

User downloads the UPI application from the App Store/  Bank’s website

User creates his/her profile by entering details such as virtual id (payment address), password, etc. User goes to “Add/Link/Manage Bank Account’ option and links the bank and account number with the virtual id

Generating UPI – PIN

User selects the bank account from which he / she wants to initiate the transaction

Change UPI PIN

User receives OTP from the Issuer bank on his / her registered mobile number

User now enters last 6 digits of Debit card number and expiry date

User enters OTP and enters his/her preferred numeric UPI PIN (UPI PIN that he/she would like to set) and clicks on Submit After clicking submit, customer gets notification (successful or decline) User enters his / her old UPI PIN and preferred new UPI PIN (UPI PIN that he/she would like to set) and clicks on Submit After clicking submit, customer gets notification (successful or failure)

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Which is the lowest lying national capital in the world?

Baku, the capital of Azerbaijan is located 28 metres below sea level, making it the lowest lying national capital in the world. Baku is also the largest city in the world that is below sea level. The name Baku is supposedly a shorter version of the Persian ‘bad kube’ (‘blown upon by mountain winds’). The city’s importance lies in its oil industry and its administrative functions. Baku’s urban population was calculated to be about two million people in 2009. About 25 per cent of all inhabitants in Azerbaijan live in Baku’s city area. Baku is the one and only metropolis in the country.

Baku’s economy is mostly based on petroleum. Presence of oil in the city was known since olden days. The city is also a major cultural and educational centre. It is home to the Baku State University (founded 1919), Khazar University (1991), and Azerbaijan Technical University (1950); there are also many other institutions of higher education, including one specializing in the oil industry.

The city is famous for its harsh winds, which gave it the nick name, the “City of Winds”. Baku is the birthplace of Lev Davidovich Landau, who won the 1962 Nobel Prize for Physics.

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What is Cryptocurrency and how does it work?

You might have heard about cryptocurrency? But do you know what it is, how it works or how it is mined? Read on to find out…

You are all familiar with currency in the form of notes and coins that are physical, meaning you can touch and feel them. There is, however, a kind of currency that you cannot see, touch or feel. It is called cryptocurrency.

What is Cryptocurrency?

A cryptocurrency is a type of digital money, the electronic form of real-world money. It has no form and exists only in the digital world. Digital payments like Google Pay, Internet banking, debit cards, etc. are necessarily linked to a bank account. In the case of cryptocurrencies, you do not need a bank- account. Digital currency allows people to send and receive payments anywhere directly to one another using an online system, without needing a bank or any centralised authority.

As a result, some countries don’t allow cryptocurrency payments, while others ban cryptocurrency exchanges or control those who provide this service.

Types of cryptocurrencies

Just like the world has many different currencies such as the Euro, the US dollar and the Japanese yen there are different types of cryptocurrencies.

The most well-known cryptocurrency is Bitcoin, which has been around since 2009 and is the world’s largest cryptocurrency. It is followed by Ethereum, Ripple, Bitcoin Cash, Cardano and Litecoin.

Who invented Bitcoin?

Bitcoin is considered the world’s first cryptocurrency. However, there is a lot of mystery surrounding its origin.

In October 2008, a person or a group of persons using the name ‘Satoshi Nakamoto’ released a paper describing a new form of electronic cash called bitcoin, The paper was released through a mailing list using cryptography, which is a method of checking and securing data using extremely difficult mathematical codes.

The identity of Satoshi Nakamoto remains a mystery. It is unknown whether it is one person or a group of people. It is popularly believed that the name is an acronym for some of the leading technology companies: Samsung, Toshiba, Nakamichi and Motorola (Sa-Toshi-Naka-Moto).

Blockchains

When a person transfers cryptocurrency funds, this transaction is recorded in a public ledger, called the blockchain.

A blockchain is a record of all transactions carried out by cryptocurrency holders. This blockchain technology joins groups of transactions (blocks) together over time (in a chain). Each time a transaction is made, it forms part of a new block that is added to the chain. So, the blockchain provides a record of every transaction. The blockchain system is very difficult to hack.

How does a cryptocurrency work?

The cryptocurrency payments system exists only as digital entries in an online database, which describes each specific transaction. A cryptocurrency wallet is needed to store cryptocurrencies. These wallets can be software that is a cloud-based service or is stored on a computer or mobile device. It is through these wallets that a person can store encryption keys that confirm his or her identity and link to his/her cryptocurrency. This is the only tangible proof of ownership of cryptocurrency.

Cryptocurrency users can buy cryptocurrencies from brokers, then store and spend them using cryptographic wallets.

Cryptocurrency mining

The units of cryptocurrency are created through a process called ‘mining’. This involves using computer power to solve complicated mathematical problems that generate coins.

Cryptocurrency mining is very hard, costly and not always rewarding.

Did you know?

  • The first bitcoin transaction was for buying a pizza. A man in Florida, USA. paid 10,000 bitcoins for two pizzas on 22 May 2020, making it the first commercial bitcoin transaction.
  • There are over 9,500 cryptocurrencies in existence as of March, 2022.
  • The total amount of bitcoins available is limited to 21 million. So, at some point, no more bitcoins can be mined.

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