Ghost SERVICE TAX At Restaurants

I find restaurant bills often so confusing; I just give up and pay the amount shown in the bottom line. Which we perhaps shouldn't.

Incidentally, I also resent the inclusion of Service Charges in restaurant bills, because it assumes that I was satisfied with the service. Just a matter of principle. Service Charge should be something I leave behind at my personal discretion.

I recently demanded that the service charge be removed as the service was non-existent. After a short - very short! - discussion, it was removed. About Service Tax..... Be aware….this happened at the restaurant.

Let me explain.

We had been to several restaurants recently. I observed that "service tax" was being misused in the way it was being charged to customers. Let me give an example.

Food and Beverage = Rs. 1000.00

Service Charges @ 10% = Rs. 100.00

Service Tax @ 4.94% = Rs. 54.34 (on F&B + Service Charges)

VAT @14.5% = Rs. 145.00

Total = Rs. 1299.34

As per the definition - "Service Tax can be charged ONLY for the Services provided to the customer".

Now, see what is happening here in the above example. Service Tax should be charged only on the Service Charge amount i.e. Rs.100 ONLY, and NOT on the entire amount (1000+100).

In this example, the customer should be charged only Rs 4.94, whereas he has been charged Rs. 49.00 extra.

Where does this money go?

Only the restaurant owner and the chartered accountants who work for them know. So, I have started asking them the questions - and am surprised to see the reaction from famous restaurants.

Either they say: "Sir we cannot change the format of the bill - so, we will recalculate and tell you the revised amount. You may pay only that." OR "Sir, you do not need to pay the Service Tax amount itself"!!

I now have 3 to 4 restaurant bills, but for which I have paid only the service tax on the service charge and NOT on the total amount.

Every bill MUST carry the TIN number and Service Tax Number, if they charge it. So . . . , I ask for the Service tax number if it is not available in the receipt that they provide.

As we cannot go to any government official and ask them to get this right - because of our system.

Please remember - we cannot change any political leader - but we can change ourselves.If we change ourselves - things will change.

Please do share this with every one of your friends and known people.

Ask for the right tax calculation and Pay only the tax which is supposed to be paid. Verify every bill and receipt that you make payment on.

Coins to replace paper

The RBI plans to gradually replace the notes with coins because the paper currency lasts less than a year and is, therefore, not cost-effective.

replacement time

Junior finance minister Namo Narain Meena made the announcement in the Lok Sabha recently, saying the notes had a life span of “just eight to nine months”. Officials said the main reason was high wear and tear resulting from their widespread use in small-value daily transactions.

“RBI plans to gradually replace Rs 10 bank notes with coins,” Meena said in his written reply. Its average printing cost is 96 paise per piece. Based on the calculations, officials said the government spent Rs 10 over seven to eight years to keep a 10-rupee note in the market.

The cost of minting a 10-rupee coin — introduced in March 2009 — is higher at Rs 6.10 but it lasts decades.

“Considering the short life-span, the printing of the note is not cost-effective,” Meena said. He added the speed of the replacement would depend on the capacity of mints to supply coins.

The Centre is experimenting with polymer and plastic notes in lower denominations to see if they were more durable. The measure was initially meant to check fake currency.

The RBI said separately it would soon issue more notes with the new rupee symbol — Devnagari “R” slashed in the middle with a short line.

Kasab ward for other patients

A Rs 2-crore high-security ward in Mumbai’s JJ Hospital built for Ajmal Kasab but never used by him is part of the Maharashtra government’s expenses on the 26/11 terrorist.

The bullet-proof ward was set up in 2008 — not long after Kasab was injured in the gun battle leading up to his capture — is on the third floor of the hospital. The government’s total expenses on him stand at over Rs 29 crore.

Doctors from the hospital in south Mumbai attended to the Pakistani in his special cell inside Arthur Road prison regularly.

According to hospital authorities, Kasab had been treated by a surgeon, physician, psychiatrist and a skin specialist in the past four years before his execution yesterday.

The special JJ ward was not used because of security problems involved in shifting a high-profile suspect from the jail to the hospital, 6km away, officials said.

Dr T.P. Lahane, the hospital dean, said the ward, which could hold 15-20 patients, was now being used for other prisoners.

“Since he (Kasab) never needed it, we took permission from the government and have been using it for other prisoners in the past few months,” he said.

Kasab was put under psychiatric care during his first year as he showed signs of depression, for which he was given medication. He also suffered from hypertension, umbilical hernia and skin infection.

Earlier this month, after suffering high fever for a few days, Kasab was put through tests in his jail cell. “He had tested positive for dengue and we had treated him for five days,” Lahane said.

A team of doctors had last checked him on November 17, five days before he was hanged. “We checked his blood pressure level, blood, chest and ECG. Everything was normal,” Lahane said. The doctors conducted the tests as routine check-up as they had not been told of his impending execution.

Earlier, prisoners taken to JJ were treated in a ward in another department, taking up more area than required in the space-crunched hospital.

The high-security court prepared inside the Arthur Road prison premises for the 26/11 trial too will be utilised for other purposes, jail officials said.

Courtesy- http://www.telegraphindia.com/1121123/jsp/nation/story_16231190.jsp#.ULGsQ7WcVIo

New Mobile banking command

Very soon Bank account holders can access their accounts, transfer funds, check balances and request cheque books by simply punching in *99# from their mobile phones!

More updates expected in coming weeks.

Reliance Money gold scheme

In a bid to carve a big slice of the Rs 2.3-trillion gold market in the country, Reliance Money Precious Metals Pvt Ltd today announced a gold accumulation plan under which customers can invest as little as Rs 1,000 a month.

The subscription tenure for the scheme, called Reliance My Gold Plan, ranges from one to 15 years.

Customers can start accumulating the yellow metal using a daily average pricing methodology. Daily average pricing methodology splits the monthly subscription into equal parts. 

At the end of the selected term of the plan, customers have the option to exchange their accumulated gold grams into 24-carat gold coins or jewellery at designated outlets across India.

While the accumulation of gold will start on the day after the realisation of funds, it can be tracked using a unique customer ID. 

The plan has an administrative charge of 1.5 per cent on each subscription, a lock-in period of six months and a pre-maturity charge of 2.5 per cent.

The World Gold Council is the marketing partner for the plan.

ATM ALERT:

The system which enabled the ATM to take back cash if it is not removed within a certain time, has been WITHDRAWN.

The step has been taken to prevent the misuse of the system as RBI has received complaints about people trying to defraud banks by holding on to some withdrawn cash in ATMs and then claiming non-receipt of cash after the machine takes back the rest. 

Meaning, now if you do not take away the cash from the ATM after you keyed in for it, the cash will remain hanging there.

FYI: Banks pay you Rs 100 per day as fine when…

Fees and fines are part of our life, especially when it comes to banks. You are slapped with a fee, if you don’t maintain the minimum balance in your savings account. You pay a credit card bill late; there is a late payment fine.

If a cheque is bounced for financial or non-financial reasons (forgot to write the date on a cheque) and you have to pay up for that. 

There are hundreds of reasons as to why you could land up paying a fee to a bank. But, did you know, as per the Reserve Bank of India, banks too have to pay you a fee? To know more, read on.

Under what circumstance: Ideally, when you visit an ATM to withdraw cash, you insert your debit card into the machine. Provide your PIN number. And after a few seconds you get the cash and corresponding cash withdrawal receipt. 

But, at times, the ATM machine fails to spit out the cash, but you get a receipt stating that the amount has been withdrawn.

What’s the rule: In such a circumstance, you call up the bank’s call center or visit the nearest bank branch and inform them about the incidence of the failed ATM transaction.

The bank assures you that the wrongly debited amount will be credited into your account. As per the Reserve Bank of India, banks have to credit this wrongly debited amount into your account within seven working days from the date of your complaint.

Banks pay you a fee: If your bank fails to comply with this rule, they have to pay you a fee of Rs 100 per day after the seventh working day.

Keep in mind that you are entitled to such a compensation for delay from your bank (the bank that has issued your debit card used to withdraw the cash), only if you lodge such a claim within 30 days of the date of transaction. If you are lucky, you won’t ever face such a situation.

But, there have been many such cases in the past with failed ATM transactions and the bank’s delay in paying the wrongly debited amount. The RBI observed that at times, some banks took as many as 50 plus days to re-credit the wrongly debited amount. Hence, this rules, to pay you a fee.

Tip: Irrespective of which bank’s ATM you use, ensure that you get in touch with your bank (the bank which has issued your debit card) and file the complaint. The call center’s number will be at the back of the debit card.

Delhi eye on Israel ‘Dome’

As Israeli missiles shot down two rockets aimed at the city of Ashdod this afternoon, an officer in the defence establishment in New Delhi totted up the scores.

India is closely watching missile defences deployed by Israel in its “Operation Pillar of Defence”, the latest flare-up between the Hamas and Israel across the Gaza Strip.

These are systems that the Indian military is evaluating. Chiefly, the Indian military is focusing on the performance of a system called “Iron Dome” that is the defence mechanism for a clutch of cities and settlements in Israel — including the southern suburbs of Tel Aviv — that are within range of the rockets fired from Gaza.

Southern Israel this week has been the true test for Iron Dome — a system touted by Israeli military officials as a “game changer”. Iron Dome first became operational last year and intercepts rockets fired from short distances of up to 80km with up to 80 per cent effectiveness.

The system, largely funded by the US and developed by the Israeli company Rafael, works by using a radar detection and tracking system to determine whether rockets will fall in areas needing protection. It then fires interception missiles that destroy the warheads and engines of incoming rockets.

The Jerusalem Post newspaper reported today of 83 missiles fired from the Gaza Strip in the hours after the killing of a Hamas commander, a majority were neutralised by a missile shield.

In 2009, the Indian Air Force was Israel’s first foreign customer for the Spyder missile defence system — a Quick Reaction Surface to Air Missile (QR-SAM) — that is replacing vintage Soviet-origin OSA-AK system. The value of the contract was not disclosed.

India’s requirement of missile defence systems are huge and Israel has been a steady supplier. It supplied the Barak I that the Indian Navy has installed or is installing on almost all its frontline ships. The Defence Research and Development Organisation (DRDO) also has a project with Israel to develop the Barak NG (next generation) that will be deployed on ships that the Indian Navy has on order.

An estimate of India’s missile defence requirements is difficult to make because of the secrecy involved. The army and the air force’s missile defence systems largely made up of outdated Pechora and OSA-AK systems procured from the Soviets.

In March this year, through a letter that was leaked, the then chief of army staff, Gen. V.K. Singh, had told Prime Minister Manmohan Singh that missile defence systems were 97 per cent obsolete and that they could not protect high value targets.

India’s own short-range missile defence programmes — the Akash and the Trishul — have not been able to meet the requirements of the armed forces.

Since 2010, Rafael Advanced Systems is known to have offered two missile defence projects — the “Iron Dome” and another called “David’s Sling” to the Indian armed forces.

A developer of Iron Dome at Rafael’s headquarters said that one of the problems with the system was its high cost.

Each time an Iron Dome missile is fired it costs about $70,000 (Rs 9.3 lakh). Israeli police reported that in the first few hours of Israel’s current operation in Gaza, Iron Dome shot down 18 rockets that would have hit civilian areas.

“The problem with Iron Dome is that it is not a solution. It is not the final answer but rather assistance to the communities under fire,” the Rafael developer said.

Courtesy- http://www.telegraphindia.com/1121117/jsp/frontpage/story_16205013.jsp#.UKeA4bWcVIo

SBI to introduce new mandatory Cheque standard from 01/01/2013

India's largest lender the State Bank of India (SBI) will implement the cheque truncation system (CTS) 2010, the new standard of cheques as mandated by the Reserve Bank of India; from January 01, 2013. The measure is primarily aimed at serving duel objectives: preventing frauds related to cheque and speedy clearing of the same.

"All the customers of State Bank of India are hereby informed that as per directive issued by the Reserve Bank of India, for standardization and enhancement of security features in cheque form and its migration to 'CTS-2010' standard, all branches of our bank will now issue only 'CTS-2010' standard cheques to their customers," the banking behemoth on Monday said in a public notice.

With this, the bank will not accept all the non-CTS cheques (that you issue from your existing cheque book) and those will be out of circulation from December 31, 2012. Hence, the existing customers are now required to surrender their existing cheque book and ask for CTS-2010 benchmarked cheques.

This move is a kind of alternative to physical cheque clearing. Some key security features are added to it. Now, the paying bank will send the scanned image of a cheque instead of physically presenting it. This form of cheques will prevent fraudulent activities as well. Cheques cannot be altered under this new system. All SBI group banks too will introduce it from January 01, 2013.

SBI's move is widely expected to prompt other big banks to execute the new process. Some foreign and private sector banks already commenced the process of migration from the existing to new standard. According to a spokesperson at SBI, the bank may issue further clarification on Tuesday in this regard.

Earlier in December, 2011; RBI had issued a notification relating to the implementation of CTS 2010 standard.

The introduction of new cheque standards 'CTS 2010' was warranted on account of several developments in the cheque clearing viz. growing use of multi-city and payable-at-par cheques at any branch of a bank, increasing popularity of speed clearing for local processing of outstation cheques and implementation of grid based cheque truncation system (CTS) for image-based cheque processing

What is cheque truncation?

Cheque truncation system (CTS) was implemented by RBI at New Delhi Bankers Clearing House on a pilot basis. Chennai of late, too executed the same process.

Cheque truncation, according to National Payment Corporation of India (NPCI) is the process in which the physical movement of cheque within a bank, between banks or among banks and the clearing house is curtailed or eliminated, being replaced in whole or in part, by electronic records of their content (with or without the images) for further processing and transmission.

Some roots of corruption in India

Corruption in India is a major issue and adversely affects its economy. A 2005 study conducted by Transparency International in India found that more than 62% of Indians had first-hand experience of paying bribes or influence peddling to get jobs done in public offices successfully.

In its 2008 study, Transparency International reports about 40% of Indians had first-hand experience of paying bribes or using a contact to get a job done in public office.In 2011 India was ranked 95th out of 178 countries in Transparency International's Corruption Perceptions Index.

Some of the largest sources of corruption in India are entitlement programs and social spending schemes enacted by the Indian government. Examples include Mahatma Gandhi National Rural Employment Guarantee Act and National Rural Health Mission.

Other daily sources of corruption include India's trucking industry which is forced to pay billions in bribes annually to numerous regulatory and police stops on its interstate highways.

Indian media has widely published allegations of corrupt Indian citizens stashing trillions of dollars in Swiss banks. Swiss authorities, however, assert these allegations to be a complete fabrication and false.

The causes of corruption in India include excessive regulations, complicated taxes and licensing systems, numerous government departments each with opaque bureaucracy and discretionary powers, monopoly by government controlled institutions on certain goods and services delivery, and the lack of transparent laws and processes.

The economy of India was under socialist-inspired policies for an entire generation from the 1950s until the late 1980s. The economy was characterized by extensive regulation, protectionism, and public ownership, policies vulnerable to pervasive corruption and slow growth. In 1960s, Chakravarthi Rajagopalachari suggested License Raj was often at the core of corruption.

The Vohra Report, submitted by the former Indian Union Home Secretary, N.N. Vohra, in October 1993, studied the problem of the criminalisation of politics and of the nexus among criminals, politicians and bureaucrats in India.

The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government. It also discussed criminal gangs who enjoyed the patronage of politicians — of all political parties — and the protection of government functionaries.

As of December 2008, 120 of India's 523 parliament members were facing criminal charges. Many of the biggest scandals since 2010 have involved very high levels of government, including Cabinet Ministers and Chief Ministers, such as in the 2G spectrum scam, the 2010 Commonwealth Games scam and the Adarsh Housing Society scam, Coal Mining Scam, mining scandal in Karnataka and cash for vote scam.

A 2005 study done by Transparency International (TI) in India found that more than 50% of the people had firsthand experience of paying bribe or peddling influence to get a job done in a public office.

Taxes and bribes are common between state borders; Transparency International estimates that truckers pay annually 22,200 crores. Government regulators and police share in bribe money, each to the tune of 43% and 45% respectively.

The en-route stoppages including those at checkpoints and entry-points take up to 11 hours in a day. About 60 percent of these (forced) stoppages on road by concerned authorities such as government regulators, police, forest, sales and excise, octroi, weighing and measuring department are for extorting money.

The loss in productivity due to these stoppages is an important national concern. The number of truck trips could increase by 40%, if forced delays are avoided.

According to a 2007 World Bank published report, the travel time for a Delhi-Mumbai trip can be reduced by about 2 days per trip if the corruption and associated regulatory stoppages to extract bribes was eliminated.

A 2009 survey of the leading economies of Asia, revealed Indian bureaucracy to be not just least efficient out of Singapore, Hong Kong, Thailand, South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines and Indonesia; further it was also found that working with India's civil servants was a "slow and painful" process.

Corruption may lead to further bureaucratic delay and inefficiency as corrupted bureaucrats may introduce red tape to extract more bribes. Such inadequacies in institutional efficiency could affect growth indirectly by lowering the private marginal product of capital and investment rate.

Levine and Renelt showed that investment rate is a robust determinant of economic growth.

According to the neoclassical growth model, institutional variables contribute to determining steady-state per capital income levels and speed of convergence to its steady state, hence affecting its growth rate.

Bureaucratic inefficiency also affects growth directly, such as through misallocation of investments in the economy. Additionally, corruption results in lower economic growth for a given level of income.

Lower corruption, higher growth rates

If corruption levels in India were reduced to levels in the developed economies such as the United States, India's GDP growth rate could increase by an additional 4 to 5 percent, to 12 to 13 per cent each year. C. K. Prahalad estimates the lost opportunity caused by corruption, in terms of investment, growth and jobs for India is over US$ 50 billion a year.

The level of corruption varies in different parts of India. In a July 2011 report, The Economist for example, claims the state government of Gujarat has kept red tape to a minimum, does not ask for bribes, and does not interfere with entrepreneurial corporations.

The state, the article claims, has less corruption, less onerous labour laws and effective bureaucracy. With growth rates matching some of the fastest growing economic regions of China, Gujarat continues to outpace growth in other Indian states.