Major Indian Crypto Exchange Disables Fiat Withdrawals amid Banking Freeze

Zebpay, one of India’s largest bitcoin and cryptocurrency exchanges, is stopping customers’ fiat deposits and withdrawals as a result of the central bank’s banking curbs.

With an announcement on Wednesday, cryptocurrency wallet and exchange platform Zebpay is moving to disable all Indian rupee (INR) deposits and withdrawals for customers as a direct consequence of the central bank’s mandated ban of prohibiting banks from offering services to cryptocurrency firms.

Smartphone-app platform Zebpay, which hit 1 million domestic app downloads late last year, said in its statement:

Today we are disabling the rupee deposit and withdrawal options on the Zebpay app. This is being done in light of the bank account closures as per the RBI guideline.

As reported previously by CCN, the Reserve Bank of India (RBI)– the country’s central bank – issued a circular on April 5 to all regulated financial institutions including banks, prohibiting them from providing services to companies in the cryptocurrency sector. The RBI pointedly enforced a three-month deadline for banks to follow the mandate. That deadline comes into effect on Thursday, despite several legal attempts to challenge the RBI-led banking blockade from cryptocurrency exchanges.

In a notice to its users last month, Zebpay had warned that fiat deposit withdrawals could become ‘impossible’, urging users to proactively file withdrawal requests. At press time, a Zebpay user confirmed the exchange was still accepting requests through the mobile application. It is, however, unlikely that the exchange continues to accept requests tomorrow after the ban comes into effect.

Existing users and new users looking to register with the KYC-enabled exchange are greeted with the following message upon opening the application:

Rs 450-crore Input Tax Credit: Intelligence unit unearths fake GST bills business

The intelligence unit for the goods and services tax (GST) has unearthed a nexus among businesses that use fake bills to claim input tax credit (ITC). Given the value of the fictitious purchases is estimated to be around `2,500 crore, the undeserved ITCs pocketed by these firms are seen to be `450 crore at an average GST rate of 18%.

Sources said that the fake bill provider is absconding but the government has started issuing summons to businesses that produced these counterfeit bills to claim tax credits.

One such notice issued by the Directorate General of Goods and Services Tax Intelligence (DGGSTI) unit in Meerut has been reviewed by FE. It has invoked the erstwhile excise, service tax as well as the new GST Acts and has asked the taxpayer to “give evidence truthfully on such matters concerning the enquiry as you may be asked and produce the documents and record mentioned in the schedule for the examination”.

The invocation of service tax law ensures that the department can look into documents for the last five years as well.

The modus operandi involves businesses buying invalid bills, which enables them to claim input tax credit on the fictitious supply. A portion of this amount is paid to the providers of such bills as commission.

“Based on a fake invoices of supplies worth Rs 118, say, of goods attracting 18% GST, a taxpayer can claim Rs 18 as ITC. It pays Rs 3-5 to the fake bill seller and pockets the rest,” a source explained. He said such invoices usually show supplies of white goods or other commodities attracting higher rates.

“The racket has hampered the tax collections, as many suppliers have converted their B2C (business-to-consumer) sales into B2B (business-to-business) sales, thereby passing on the input tax credit to the recipient. The tax so paid under B2C supplies is an accrued revenue for the government, whereas taxes paid under B2B supplies is a liability which would be adjusted till a final B2C supply occurs,” said Rajat Mohan, partner, AMRG & Associates.

The government has long suspected large-scale evasion in credit claims including transitional credit, which was claimed on tax-paid goods brought to GST regime after July 1. taxpayers have claimed over Rs 1.6 lakh crore as transitional credit till December last year when the window for such claims closed.

Thereafter, the Central Board of Indirect Taxes and Customs (CBIC) culled out the top 50,000 such claimants, who are responsible for nearly 90% of the claims, for detailed verification. This exercise is stipulated to run through out this year.

Similarly, in the absence of an invoice-matching system of return-filing, taxpayers have been allowed to file a monthly summary return (GSTR-3B) with self-declared tax liability and ITC availability. Although they are required to file sales invoices also under GSTR-1 return, the matching of inward and outward supplies have been hampered leading to evasion.

Tax officials say that enforcement action is not in full swing yet as the government believes assessees need more time to adjust to the new system, matching of large amount of taxpayer data is resulting in exposing anomalies.

Fuel rates at record high: Why petrol, diesel prices are surging

As the fuel prices are sky-rocketing, the government has said that it is looking at various ways to keep the rates in check. "The Centre is sensitive towards the rising fuel prices. Various alternatives are being explored. I hope something will work out soon," Oil Minister Dharmendra Pradhan told reporters in Bhubaneswar.

Prices at the pump have surged on the back of rallying international markets for crude oil, which last week hit their strongest since late-2014 amid ongoing production cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

India is particularly at risk from stronger global prices for crude oil as it is the third biggest importer of the commodity, buying about 80 per cent of its oil needs.

With rising crude prices and a depreciating rupee, petroleum is bound to get more expensive. Diesel had already reached its all-time high and petrol too, at Rs 76.24 per litre in Delhi, hit a new high on Sunday, breaking its September 2013 record. TOI analyses petrol prices:

In the last 16 years petrol, reached the highest price of Rs 76.06 per litre in Delhi on September 14, 2013. The next four highest prices were reached in May 2018 + . The present price of diesel, on the other hand, is the highest ever in this 16-year period.

Indian rupee down 7 paise against dollar in late morning deals

The rupee pared some initial losses, to trade lower by 7 paise at 68.07 against the American currency in late morning deals on sustained dollar demand from importers and banks, despite lower local equities.

The rupee recovered from a fresh 16-month low of 67.08 against last Friday's closing level of 68.00 per dollar at the inter-bank foreign exchange here.

Later, it regained its lost ground to trade flat at 68 before falling again in late morning deals; it was trading at 68.07 per dollar at 1030 hrs.

The domestic unit hovered between 68.00 and 68.15 during morning deals.

"Sustained capital outflows, higher dollar overseas after easing trade war tension's loomed over rupee," a dealer said.

Meanwhile, the US dollar rose against basket currencies in early Asian trade after US Treasury Secretary Steven Mnuchin said the US trade war with China was on hold.

The 30-share BSE Sensex fell by 55.04 points, or 0.16 percent, at 34,793.26 at 1050 hrs.

Fall in food prices eases WPI inflation, slips marginally to 2.47% in March

 Reflecting farmers’ woes, at least in some commodities such as tomatoes, wholesale price food items saw deflation in March. This has pulled down the overall inflation rate marginally to 2.47 per cent in March, from 2.48 per cent in February, even as oil inflation more or less neutralised the impact of food inflation.

Food deflation stood at 0.29 per cent in March, compared to inflation of 0.88 per cent in February. Within food, vegetables saw deflation at 2.70 per cent, against 5.26 per cent inflation.

Among vegetables, tomatoes saw a price fall of 26.48 per cent in terms of the wholesale price index (WPI). The index stood at 92.7 points in March, which meant prices of tomatoes, on an average, were less than those in 2011-12.

There were reports of aggrieved farmers dumping tomatoes from various parts of the country.

WPI is the best way to judge prices offered to farmers, given the statistical limitations.

Sunil Kumar Sinha, director, India Ratings and Research, said earlier it was the potato and now the tomato is adding distress to farmers.

Pulses have been witnessing deflation for months now. The rate of deflation, though, came down to 20.58 per cent in March, from 24.51 per cent in the previous month.

Sinha said prices of many pulses are ruling below the minimum support price in some parts, including Madhya Pradesh.

However, food inflation was offset by fuel prices, even as liquefied petroleum gas entered the deflationary zone. Fuel and power inflation rose to 4.70 per cent in March, against 3.81 per cent in the previous month.

Fall in food prices eases WPI inflation, slips marginally to 2.47% in March

Sinha said with Brent crude oil prices going past $70 per barrel and the onset of summer likely to impact the prices of fruits and vegetables adversely, the inflation trajectory over the coming few months will be crucial for the Reserve Bank of India to decide its policy stance of whether to remain in an extended pause mode on rates or change it.