The major sales tax provisions relevant for leasing are as follows: The lessor is not entitled for the concessional rate of central sales tax because the asset purchased for leasing is meant neither for resale nor for use in manufacture. (It may be noted that if a firm buys an asset for resale or for use in manufacture it is entitled for the confessional rate of sales tax). The 46th Amendment Act has brought lease transitions under the purview of ‘sale’ and has empowered the central and state government to levy sales tax on lease transactions. While the Central Sales Tax Act has yet to be amended in this respect, several state governments have amended their sales tax laws to impose sales tax on lease transactions. a. Levy of Sales Tax: Sales Tax is leviable when goods are sold. Thus there must be ” Goods and there must be a Continue reading
Business Finance
Business Finance is that business activity which is concerned with the acquisition and conservation of capital funds in meeting financial needs and overall objectives of business enterprises.
How to Save Money with Credit Cards
Credit cards have been vilified by many as being the surest way of getting into irreversible debt. However, this notion and belief is not always true. It is possible to actually save money with credit cards. This is nevertheless only possible if you know how to go about saving money with credit cards. Here are a few time-tested ways in which you can still use your credit card and manage to put some cash into your pocket as well. Rewards are a popular offer given by most credit card providers. They offer the card user certain rewards for using the card to purchase or make payments. These rewards come in the form of cash rebates, travel service discounts and so on. Making sure you use only reward cards means you will be getting at least some value back for the money spent. However, this is just one aspect to reward Continue reading
Electronic Cheque Payment System
Electronic cheques address the electronic needs of millions of businesses, which today exchange traditional paper cheques with the other vendors, consumers and government. The e-cheque method was deliberately created to work in much the same way as conventional paper cheque. An account holder will issue an electronic document that contains the name of the financial institution, the payer’s account number, the name of payee and amount of cheque. Most of the information is in uncoded form. Like a paper cheques e-cheques also bear the digital equivalent of signature: a computed number that authenticates the cheque from the owner of the account. Digital chequing payment system seeks to Continue reading
Debt recovery processes followed by Indian Banks
Banks lay down their policy and procedure for collection of past due debts in conformity with the legal and regulatory framework. The banks will in particular, abide by: The Reserve Bank of India(RBI) directives on recovery of debt, including recovery agents engaged by the bank and, The Model Policy on collection of Dues and Repossession of security framed by the Indian Banks’ Association. A bank will normally incorporate its policy and procedure for debt recovery in the arrangement entered into its recovery agents. In terms of the recovery management agreed with the bank, the recovery agents should adhere to the policy, procedure, etc. prescribed by the bank. Debt recovery processes Debt recovery processes can be typically of following kinds, each involving different procedure: Difficult recovery process where the debtors are not willing to pay and who intentionally resist or avoid recovery efforts: The recovery agent has to Continue reading
Factors Contributing to the Growth of Derivatives
Factors contributing to the explosive growth of derivatives are price volatility, globalization of the markets, technological developments and advances in the financial theories. 1. Price Volatility A price is what one pays to acquire or use something of value. The objects having value maybe commodities, local currency or foreign currencies. The concept of price is clear to almost everybody when we discuss commodities. There is a price to be paid for the purchase of food grain, oil, petrol, metal, etc. the price one pays for use of a unit of another persons money is called interest rate. And the price one pays in one’s own currency for a unit of another currency is called as an exchange rate. Prices are generally determined by market forces. In a market, consumers have ‘demand’ and producers or suppliers have ‘supply’, and the collective interaction of demand and supply in the market determines Continue reading
Risk management system at NSE
A sound risk management system is integral to an efficient clearing and settlement system. NSE introduced for the first time in India, risk containment measures that were common internationally but were absent from the Indian securities markets. NSCCL (National Securities Clearing Corporation Ltd.) has put in place a comprehensive risk management system, which is constantly upgraded to pre-empt market failures. It ensures that trading member obligations are commensurate with their networth. Risk containment measures include capital adequacy requirements of members, monitoring of member performance and track record, stringent margin requirements, position limits based on capital, on-line monitoring of member positions and automatic disablement from trading when limits are breached, etc. Daily margins payable by members consists of (1) Value at Risk Margin, (2) Extreme Loss Margin, and (3) Mark to Market Margin. Mark-to-Market Margin : Mark to market loss is calculated by marking each transaction in security to the closing Continue reading