Important Keyword: F. No. 275/22/2017-CX.8A, Circular No. 25/25/2017-GST, rules 104 and 106 of the CGST Rules, 2017, notification No. 55/2017-Central Tax, (1) of section 168 of the Central Goods and Services Tax Act, 2017, (1) of section 97 of the CGST Act, section 49 of the CGST Act, section 48 of the CGST Act, section 49 of the CGST Act, section 100 (2) of the CGST Act, section 100 of the CGST Act,
F. No. 275/22/2017-CX.8A Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs GST Policy Wing
New Delhi, dated 21st December, 2017
Circular No. 25/25/2017 – GST
Table of Contents
To,
Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioner of Central Tax (All) Principal Director Generals/Director Generals (All)
Sub: Manual filing of applications for Advance Ruling and appeals before Appellate Authority for Advance Ruling – reg
As per rules 104 and 106 of the CGST Rules, 2017 (hereinafter referred to as “the CGST Rules”) the application for obtaining an advance ruling and filing an appeal against an advance ruling shall be made by the applicant on the common portal. However, due to the unavailability of the requisite forms on the common portal, a new rule 107A has been inserted vide notification No. 55/2017-Central Tax, dated 15.11.2017, which states that in respect of any process or procedure prescribed in Chapter XII, any reference to electronic filing of an application, intimation, reply, declaration, statement or electronic issuance of a notice, order or certificate on the common portal shall, in respect of that process or procedure, include the manual filing of the said application, intimation, reply, declaration, statement or issuance of the said notice, order or certificate in such Forms as appended to the CGST Rules.
2. Therefore, in exercise of the powers conferred by sub-section (1) of section 168 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’) on the recommendations of the Council and for the purpose of ensuring uniformity in the processing of such manual applications till the advance ruling module is made available on the common portal, the following conditions and procedure are prescribed for the manual filing and processing of the applications.
Form and Manner of Application to the Authority for Advance Ruling
3. An application for obtaining an advance ruling under sub-section (1) of section 97 of the CGST Act and the rules made thereunder, shall be made in quadruplicate, in FORM GST ARA-01. The application shall clearly state the question on which the advance ruling is sought. The application shall be accompanied by a fee of five thousand rupees which is to be deposited online by the applicant, in the manner specified under section 49 of the CGST Act. It is reiterated that though the application shall be filed manually till the advance ruling module is made available on the common portal, the fee is required to be deposited online in terms of section 49 of the CGST Act.
4. In order to make the payment of fee for filing an application for Advance Ruling on the common portal, the applicant has to fill his details using “Generate User ID for Advance Ruling” under “User Services”. After entering the email id and mobile number, a One Time Password (OTP) shall be sent to the email id. Upon submission of OTP, Systems shall generate a temporary ID and send it to the declared email and mobile number of the applicant. On the basis of this ID, the applicant can make the payment of the fee of Rs. 5,000/- each under the CGST and the respective SGST Act. The applicant is then required to download and take a print of the challan and file the application with the Authority for Advance Ruling.
5. The application, the verification contained therein and all the relevant documents accompanying such application shall be signed-
in the case of an individual, by the individual himself or where he is absent from India, by some other person duly authorised by him in this behalf, and where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf;in the case of a Hindu Undivided Family, by a Karta and where the Karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family or by the authorised signatory of such Karta;in the case of a company, by the Chief Executive Officer or the authorised signatory thereof;in the case of a Government or any Governmental agency or local authority, by an officer authorised in this behalf;in the case of a firm, by any partner thereof, not being a minor or the authorised signatory thereof;in the case of any other association, by any member of the association or persons or the authorised signatory thereof;in the case of a trust, by the trustee or any trustee or the authorised signatory thereof; or
in the case of any other person, by some person competent to act on his behalf, or by a person authorised in accordance with the provisions of section 48 of the CGST Act.
Form and Manner of Appeal to the Appellate Authority for Advance Ruling
6. An appeal against the advance ruling issued under sub-section (6) of section 98 of the CGST Act and the rules made thereunder shall be made by an applicant in quadruplicate, in FORM GST ARA-02 and shall be accompanied by a fee of ten thousand rupees to be deposited online, in the manner specified in section 49 of the CGST Act. It is reiterated that though the application shall be filed manually till the advance ruling module is made available on the common portal, the fee is required to be deposited online in terms of section 49 of the CGST Act. The payment of fee shall be made as detailed in para 4 above.
7. An appeal made by the concerned officer or the jurisdictional officer referred to in section 100 of the CGST Act and the rules made thereunder shall be filed in quadruplicate, in FORM GST ARA-03 and no fee shall be payable by the said officer for filing the appeal. As per section 100 (2) of the CGST Act, the appeal shall be filed within a period of thirty days from the date on which the ruling sought to be appealed against is communicated to the applicant or the concerned officer or the jurisdictional officer, as the case maybe.
8. The appeal, the verification contained therein and all the relevant documents accompanying such appeal shall be signed-
in the case of the concerned officer or jurisdictional officer, by an officer authorised in writing by such officer; and
in the case of an applicant, in the manner specified in Para 5 above.
9. The application for advance ruling or the appeal before the Appellate Authority shall be filed in the jurisdictional office of the respective State Authority for Advance Ruling or the State Appellate Authority for Advance Ruling respectively.
10. If the space provided for answering any item in the Forms is found to be insufficient, separate sheets may be used. Further, the application, the verification appended thereto, the Annexures to the application and the statements and documents accompanying the Annexures must be self-attested.
11. It is requested that suitable trade notices may be issued to publicize the contents of this circular.
12. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board.
Important Keywords: Asset Turnover Ratio, Efficiency, Financial Metrics, Revenue, Asset Utilization, Business Performance, Investment, Industry Peers, Financial Analysis, Indian Entrepreneur.
Table of Contents
Introduction
In the intricate world of business finance, there’s a handful of financial ratios and metrics that serve as guiding stars, helping entrepreneurs navigate the labyrinth of profit and loss. One such guiding star is the Asset Turnover Ratio. This financial metric acts as a beacon, illuminating the efficiency with which a company uses its assets to generate revenue. In this article, we will delve into the nitty-gritty of the Asset Turnover Ratio, uncovering its importance, how it’s calculated, and its role in evaluating business performance.
Deciphering the Asset Turnover Ratio
The Asset Turnover Ratio is a numerical depiction of how effectively a company employs its assets to churn out revenue. It’s a simple yet powerful indicator of operational efficiency. The ratio highlights the harmony between a company’s revenue and the value of its assets.
To put it in perspective, picture this: your company is like a ship, and your assets are the oars. The faster and more efficiently your oars (assets) propel the ship (company), the more revenue you generate. When the Asset Turnover Ratio is high, it signifies that your company is masterfully navigating the seas of business, making the most of its assets. Conversely, a low ratio suggests that your ship may be meandering, not harnessing its assets efficiently.
Calculating the Asset Turnover Ratio
The formula for this ratio is simple yet insightful:
Here’s a step-by-step breakdown of how to calculate it:
Locate Beginning and Ending Assets: Start by identifying the value of your company’s assets at the beginning and end of the fiscal year. These are the oars that will power your business ship.
Calculate Average Assets: Add the beginning asset value and the ending asset value, then divide the sum by 2. This gives you the average asset value for that specific year. Think of this as the average strength of your oars throughout the year.
Total Sales: Locate the total sales or revenue generated during the same fiscal year. This is the outcome of your voyage, the treasure you’ve collected along the way.
The Final Calculation: Divide the total sales value by the average asset value for that year. This final step in the calculation reveals how efficiently your oars are moving your ship.
The Indian Entrepreneur’s Journey
Now, let’s imagine you’re an Indian entrepreneur. Your business is like a boat sailing on the vast ocean of opportunities. You’ve invested in various assets, including machinery, inventory, and property, and your goal is to maximize revenue. The Asset Turnover Ratio can be your guiding star.
For instance, let’s say you’re running a textile manufacturing company. You want to ensure that your looms, fabrics, and other assets are used efficiently to drive sales. At the beginning of the fiscal year, your assets are worth INR 2 crore. By the end of the year, they’ve grown to INR 2.5 crore. Your total revenue for the year is INR 5 crore.
A calculated Asset Turnover Ratio of approximately 2.35 suggests that, on average, for every 1 INR worth of assets, you generate 2.35 INR in revenue throughout the year. This means your boat is sailing smoothly, with your oars (assets) effectively driving your business forward.
Advantages of the Asset Turnover Ratio
Efficiency Indicator: It’s like a dashboard that showcases how efficiently you’re using your resources to generate revenue.
Performance Evaluation: The ratio lets you measure your company’s performance against its own historical data or against industry peers.
Investor Magnet: Potential investors use this ratio to evaluate the efficiency of your business, influencing their decisions to invest.
Disadvantages of the Asset Turnover Ratio
Industry Variations: The ideal ratio differs from one industry to another, making comparisons challenging.
Not All Assets Are Equal: The ratio treats all assets as equal. Some assets may contribute more to revenue than others, which this ratio doesn’t differentiate.
Conclusion
In the labyrinth of business finance, the Asset Turnover Ratio serves as a guiding star for entrepreneurs. It sheds light on the efficiency of asset utilization, helping you fine-tune your strategies. As an Indian entrepreneur navigating the vast ocean of opportunities, this ratio can be your compass, ensuring your assets efficiently power your business voyage.
So, the next time you’re analyzing your company’s performance, remember to consider the Asset Turnover Ratio. It’s a simple yet powerful tool that can steer your ship toward smoother sailing and more profitable horizons.
Important Keywords: Beta, Capital Asset Pricing Model (CAPM), Market volatility, Systematic risk, Risk assessment, Covariance, Variance, Investment decisions, Expected returns, Indian investors.
Table of Contents
Introduction:
Beta, a fundamental concept in finance, plays a crucial role in understanding investment risks and market behavior. It’s extensively used in the Capital Asset Pricing Model (CAPM) and serves as a measure of market volatility or systematic risk. In this guide, we’ll unravel the complexities of beta, exploring its calculations, significance in CAPM, and its relevance to investors. The aim is to explain this financial term in simple language for the average Indian with limited English grammar skills.
Sub-headings with Short Paragraphs:
The Essence of Beta: Beta is a yardstick of risk used in the investment world, particularly in capital markets. It gauges the market volatility of a portfolio or a specific security concerning a benchmark or the market at large. This metric provides investors with insights into how a stock might move concerning the market’s swings.
Beta’s Role in CAPM: In the Capital Asset Pricing Model (CAPM), beta signifies the relationship between expected returns on a capital asset and the systematic risk of particular shares. This model is widely used to price risky securities and estimate expected returns for capital assets by considering the cost of capital and assets’ risk.
The Mathematics of Beta: The formula to calculate beta is based on covariance and variance. Beta coefficient equals the covariance of returns of an individual stock (Re) and the overall market (Rm), divided by the variance of the market returns (Rm). It essentially indicates how a stock’s returns move concerning the market’s returns.
Advantages:
Risk Assessment: Beta helps investors assess the risk associated with a particular stock or portfolio in comparison to the overall market.
Pricing Securities: It’s a crucial tool in pricing securities, providing a basis for estimating expected returns for investors.
Understanding Volatility: Beta assists in understanding the volatility trends, aiding investors in making informed investment decisions.
Disadvantages:
Historical Basis: Beta is based on historical data, making it less effective for investors trying to predict future movements, especially in dynamic markets.
Assumes Efficiency: The calculation of beta assumes that markets are efficient and that past performance can predict future behavior, which may not always hold true.
Limited for Short-Term: Beta is more useful for short-term risk assessment, making it less suitable for investors with long-term perspectives.
Self-explanatory Bullets:
Systematic Risk Measurement: Beta helps in measuring the systematic risk or market risk associated with a specific stock or portfolio.
Market Volatility Comparison: It allows investors to compare the volatility of a stock or portfolio with the overall market, aiding risk assessment.
FAQ:
Q1: How does beta help in investment decisions? A1: Beta provides insights into a stock’s volatility concerning the market, assisting investors in evaluating risks and making informed investment choices.
Q2: Can beta predict a stock’s future performance? A2: Beta is based on historical data and may not accurately predict future performance as it assumes past trends will continue.
Q3: Is beta useful for long-term investors? A3: Beta is more suitable for short-term risk assessment, so it may not be the best tool for long-term investors.
Example:
Let’s consider an example to simplify beta for Indian readers. Imagine you’re a farmer deciding which crop to grow. You look at the past weather patterns (like beta) to predict which crop will thrive in the coming months. If the past few years had consistent rain during monsoon (like consistent stock performance in the market), you may choose a crop that thrives in such conditions, expecting a good yield. However, weather patterns can change (like market trends), so this prediction isn’t guaranteed, but it helps you make an informed choice.
Key Takeaways:
Beta is a measure of market volatility or systematic risk concerning a benchmark. It aids in risk assessment and understanding how a stock behaves concerning market movements. Beta’s calculation involves covariance and variance, providing a mathematical representation of a stock’s volatility.
Conclusion:
Beta is an essential tool in the world of investments, helping investors gauge risk and make informed choices. Understanding this metric is crucial for anyone stepping into the finance world. While it has its limitations, its significance in risk assessment and pricing securities cannot be overlooked. As Indian investors navigate the complex realm of finance, a grasp of beta can be a valuable asset, guiding them towards more informed investment decisions.
In view of the foregoing, it is respectfully prayed that the Ld. Appellate Authority, may be pleased to: set aside/modify the impugned advance ruling passed by the Authority for Advance Ruling as prayed above;
In view of the foregoing, it is respectfully prayed that the Ld. Appellate Authority, may be pleased to: set aside/modify the impugned advance ruling passed by the Authority for Advance Ruling as prayed above; grant a personal hearing;
I,______________ (name in full and in block letters), son/daughter/wife of_____________________________ do hereby solemnly declare that to the best of my knowledge and belief what is stated above and in the annexure(s), including the documents is correct.
In this article, we will explore the concept of a balanced investment strategy, which can help individuals build a healthy and diversified portfolio. A balanced approach involves carefully selecting a mix of investments to mitigate risks while aiming for optimal returns. By understanding this strategy, investors can make informed decisions and work towards achieving their financial goals.
Sub-headings with Short Paragraphs:
Understanding a Balanced Investment Strategy: A balanced investment strategy involves creating a portfolio that combines different types of investments to achieve a balanced risk-reward profile. By diversifying across various asset classes, sectors, and company sizes, investors can reduce the impact of market volatility and enhance the potential for long-term growth. This strategy aims to strike a balance between conservative and aggressive investments to preserve capital while seeking opportunities for capital appreciation.
Building a Balanced Portfolio: To implement a balanced investment strategy, investors should consider a range of factors such as risk appetite, time horizon, and financial goals. This entails selecting a mix of defensive stocks, which tend to be more stable, and aggressive stocks, which have the potential for higher returns but also come with higher risk. Additionally, factors like management quality, product mix, and regulatory environment should be evaluated to assess risk levels accurately.
Advantages of a Balanced Investment Strategy:
Risk Mitigation: Diversification across different asset classes helps reduce the impact of individual investment fluctuations, lowering overall portfolio risk.
Potential for Growth: By including both conservative and aggressive investments, a balanced strategy allows investors to capture potential growth opportunities while preserving capital.
Consistent Performance: A well-balanced portfolio tends to deliver more consistent returns over the long term, even during volatile market conditions.
Disadvantages of a Balanced Investment Strategy:
Moderate Returns: A balanced approach may not yield exceptionally high returns compared to a more aggressive investment strategy focused solely on high-risk assets.
Complexity: Building and managing a balanced portfolio requires continuous monitoring and adjustment, which can be challenging for inexperienced investors.
Self-explanatory Bullets:
A balanced investment strategy involves combining different types of investments to achieve a balanced risk-reward profile.
Diversification across asset classes, sectors, and company sizes is key to a balanced portfolio.
Factors such as risk appetite, time horizon, and financial goals should guide investment decisions.
Defensive stocks provide stability, while aggressive stocks offer growth potential.
Evaluating risk factors such as management quality and regulatory environment is crucial.
Balanced portfolios aim to mitigate risk, capture growth, and deliver consistent performance.
FAQs:
Q: How does a balanced investment strategy help mitigate risk? A: A balanced strategy diversifies investments across different asset classes, reducing exposure to any single investment. This helps minimize the impact of market fluctuations on the overall portfolio.
Q: Can a balanced investment strategy deliver high returns? A: While a balanced approach may not provide exceptionally high returns, it aims for more consistent performance over the long term. It balances the potential for growth with risk mitigation.
Q: How can I implement a balanced investment strategy? A: To implement a balanced strategy, consider your risk tolerance, investment goals, and time horizon. Diversify across asset classes, sectors, and company sizes, balancing conservative and aggressive investments.
Example:
Suppose an investor in India wants to create a balanced investment portfolio. They may allocate a portion of their funds to low-risk government securities, such as fixed deposits or long-term bonds, to preserve capital. These investments provide steady, albeit low, returns and act as a defensive component in the portfolio.
To capture potential growth, the investor can allocate another portion of their portfolio to mid-cap equity stocks of companies in expanding industries. These stocks have higher growth potential but come with a higher level of risk.
Additionally, theinvestor can include blue-chip equities, which are shares of well-established and financially stable companies, to further diversify the portfolio. These stocks offer stability and reliable dividends, adding a defensive element to the portfolio.
By carefully balancing the allocation between defensive investments and growth-oriented assets, the investor aims to achieve a balance between risk and return. This allows them to benefit from potential growth opportunities while minimizing the impact of market volatility.
Key Takeaways:
A balanced investment strategy involves diversifying across different asset classes and sectors to mitigate risk and optimize returns.
By combining defensive and growth-oriented investments, investors can achieve a balanced risk-reward profile.
Factors such as risk tolerance, investment goals, and time horizon should guide the composition of a balanced portfolio.
Balanced portfolios aim for consistent performance over the long term, capturing growth while preserving capital.
Regular monitoring and adjustments are necessary to maintain the balance and adapt to changing market conditions.
Conclusion:
A balanced investment strategy provides individuals with a method to create a well-diversified portfolio, striking a balance between risk and return. By combining defensive and growth-oriented investments, investors can mitigate risk while seeking opportunities for long-term growth. A balanced portfolio aims to deliver consistent performance and allows individuals to achieve their financial goals while preserving capital. By understanding the principles of a balanced investment strategy and making informed decisions, investors in India can work towards financial stability and success.
Important keywords: book value, assets, liabilities, net asset value, market value, investors, undervalued stocks, financial health, investment decisions, Indian investors.
Table of Contents
Headings:
Introduction
What is Book Value?
Calculating Book Value
Book Value as a Measure of Company Worth
Book Value and Market Value Comparison
Importance of Book Value for Investors
Example: Book Value in the Indian Context
Key Takeaways
Conclusion
Introduction:
In this article, we will explore the concept of book value and its significance for investors in India. We will explain what book value represents and how it is calculated. Additionally, we will discuss the importance of book value when comparing it to the market value of a company’s stock. Let’s dive in!
What is Book Value?
Book value refers to the value of an asset as recorded on a company’s balance sheet. It is determined by subtracting the accumulated depreciation from the total net value of the asset. Book value can also be seen as the net asset value of a company, obtained by deducting intangible assets (such as patents and goodwill) and liabilities from the total assets.
Calculating Book Value:
To calculate book value, a company subtracts the accumulated depreciation from the total net value of an asset. This provides an accurate representation of the asset’s worth based on its current condition. By accounting for depreciation, companies can track the decrease in value of their assets over time.
Book Value as a Measure of Company Worth:
Book value serves as an estimate of the total value that shareholders would potentially receive if a company were to be liquidated. It provides insights into the underlying assets of a company and their net worth. By analyzing book value, investors can assess the financial health and stability of a company.
Book Value and Market Value Comparison:
Comparing the book value to the market value of a company’s stock is an important analysis for investors. If the market value is higher than the book value, it suggests that investors have confidence in the company’s future earnings potential. Conversely, if the market value is lower than the book value, it may indicate that the stock is undervalued.
Importance of Book Value for Investors:
Book value can help investors make informed investment decisions by providing a basis for assessing a company’s intrinsic value.
It allows investors to evaluate the financial strength and stability of a company.
By comparing book value to market value, investors can identify potential undervalued or overvalued stocks.
Example:
Let’s consider an example to understand book value in the Indian context. Company X has total assets worth 1,00,000 rupees, including buildings, equipment, and inventory. The company also has intangible assets worth 20,000 rupees. Furthermore, it has liabilities of 30,000 rupees. In this case, the book value of Company X would be calculated as follows:
Book Value = Total assets – Intangible assets – Liabilities = 1,00,000 – 20,000 – 30,000 = 50,000 rupees
Key Takeaways:
Book value represents the net asset value of a company after deducting intangible assets and liabilities from total assets.
Comparing book value to market value can help investors determine if a stock is undervalued or overpriced.
Book value is a useful tool for assessing a company’s financial health and stability.
Conclusion:
In conclusion, book value plays a crucial role in evaluating a company’s worth and determining potential investment opportunities. By understanding book value, investors can make informed decisions and identify undervalued stocks. It is essential for Indian investors to consider book value alongside other financial indicators to assess the financial health of a company before making investment choices.
