Sethurathnam Ravi, popularly known as S Ravi is the former chairman of Bombay Stock Exchange Limited (BSE). Currently he is the Founder and Managing Partner of Ravi Rajan & Co., an advisory and accountancy firm, headquartered in New Delhi, India. He is also an Associate Member of Association of Certified Fraud Examiners (CFE), USA, and also a registered Insolvency Resolution Professional. Sethurathnam Ravi in his latest article explains the challenges faced when investing in overseas mutual funds.

According to the Sethurathnam Ravi BSE ,the investment can be made in Indian Rupees and redemption is in Indian rupees. Investing in overseas Mutual Fund which is non-domestic has its own challenges in terms of methodology of payment, foreign exchange fluctuation and taxation, he explains. “The most preferred investment vehicle is through domestic fund houses as data and performance is readily available. Investors who have strong domestic presence the most efficient mechanism is to invest through domestic fund houses who in turn invest through various schemes in foreign stocks”, S Ravi said.

Sethurathnam Ravi also explains about the pattern of investment in overseas mutual funds. As per his affirmation the pattern of investment in international mutual fund is different from that of investments in domestic mutual funds. There are many things that need to be taken care of while investing in international mutual funds. S Ravi also explains about the term of investments that are suitable for investing in overseas mutual funds unlike domestic funds.

“An aspect which needs to be factored in this is that it is always better to invest medium or long-term perspective as one foreign stock give a good return over a period of time. Short-term investment in international mutual funds have witnessed volatility and thus should be avoided. Non-resident Indians have the liberty of investment from the country of residency. International mutual funds have delivered return of 27% in the last year. The three-year return is around 12% and the five-year return is approximately 13%”, Mr. Ravi, Former BSE Chairman affirms.

Investors still have the option to choose country specific investment through domestic fund house. There are specific schemes for investments predominantly in the US based stocks. Today the investor is equipped with data wherein fund performance is available along with NAV and returns, Sethurathnam Ravi concluded.

Also Watch:

At a time when the Covid-19 pandemic and consequent lockdowns affected the economy, the stock market was one of the very few areas where the wheels were still turning. This attracted many new investors, and a record number of new Demat accounts were opened. During then pandemic, the Indian stock market witnessed lakhs of new investors form the Tier-2 and Tier-3 cities. However, this enthusiasm seems to have waned as returns from the market have flattened in recent months. From a high of 20 lakh new investors in October 2021, it has dropped to 13 lakhs in April 2022.

According to the former BSE Chairman Sethurathnam Ravi, foreign portfolio investments or FPIs became net sellers for eight out of 12 months in 2021–22 with a net outflow of Rs. 1.3 lakh crore, against a net inflow of Rs. 2.8 lakh crore in the previous year. Mutual funds, on the other hand, made heavy investments worth Rs. 1.7 lakh crore in the Indian equity market in 2021–22, according to the Reserve Bank of India.

There was a massive rise in the number of new Demat accounts. A total of 50 lakh Demat accounts were opened in 2019–20 and 1.42 crore in 2020–21. This shot up to 3.46 crore new Demat accounts in the year 2021–22. This means that on average, 28.8 lakh Demat accounts were opened every month during 2021–22, which was higher than 11.8 lakh accounts per month in the previous year and 4.2 lakh Demat accounts per month in 2019–20.

Due to this, the Indian stock market future remained dark with the pandemic looming over us. The global supply chain was crippled. Yet, S Ravi acknowledges that India’s stock market was one of the few areas that remained more stable than other markets. Finance Minister Nirmala Sitharaman said that retail investors seemed to act as shock absorbers even when foreign portfolio investors went away.

At a time when the Covid-19 pandemic and consequent lockdowns affected the economy, the stock market was one of the very few areas where the wheels were still turning. This attracted many new investors, and a record number of new Demat accounts were opened. During then pandemic, the Indian stock market witnessed lakhs of new investors form the Tier-2 and Tier-3 cities. However, this enthusiasm seems to have waned as returns from the market have flattened in recent months. From a high of 20 lakh new investors in October 2021, it has dropped to 13 lakhs in April 2022.

According to the former BSE Chairman Sethurathnam Ravi, foreign portfolio investments or FPIs became net sellers for eight out of 12 months in 2021–22 with a net outflow of Rs. 1.3 lakh crore, against a net inflow of Rs. 2.8 lakh crore in the previous year. Mutual funds, on the other hand, made heavy investments worth Rs. 1.7 lakh crore in the Indian equity market in 2021–22, according to the Reserve Bank of India.

There was a massive rise in the number of new Demat accounts. A total of 50 lakh Demat accounts were opened in 2019–20 and 1.42 crore in 2020–21. This shot up to 3.46 crore new Demat accounts in the year 2021–22. This means that on average, 28.8 lakh Demat accounts were opened every month during 2021–22, which was higher than 11.8 lakh accounts per month in the previous year and 4.2 lakh Demat accounts per month in 2019–20.

Due to this, the Indian stock market future remained dark with the pandemic looming over us. The global supply chain was crippled. Yet, S Ravi acknowledges that India’s stock market was one of the few areas that remained more stable than other markets. Finance Minister Nirmala Sitharaman said that retail investors seemed to act as shock absorbers even when foreign portfolio investors went away.

Sethurathnam Ravi (S Ravi) is the former BSE Chairman and founder of Ravi Rajan & Co. In his past career he held the position of Union Finance & Revenue Secretary at India Ministry of Finance. Presently, Mr. Ravi holds the position of Non-Executive Chairman of Tourism Finance Corp. of India Ltd. and Director & Managing Partner at RRCA & Associates. Sethurathnam Ravi shares his views on how to protect yourself from fraudulent app scams.

According to Mr. S Ravi BSE, fraud applications have been a menace to many users who have lost money unknowingly. They are fake applications that are mirrors of legitimate applications available on the market. Fraudsters and scammers create applications to induce people to use them. These applications could be similar to popular applications to mislead users who download them on their phones or laptops. It can be a jumble of words that are more or less similar to frequently used applications. However, these applications have one thing in common; they are disguised as genuine applications and are well constructed.

“It is public knowledge that many of these fraudulent apps have also been promoted and advertised on Google networks, Facebook, Instagram, TikTok, etc. As per published information, more than 5 lakh Indians were cheated by using Chinese applications amounting to approximately ₹150 crores. Many investment applications were used to swindle small investors”, Mr. Ravi says.

There are too many cash applications that have witnessed a high percentage of fraud. Cash applications have been chosen carefully as this directly causes financial damage. Such applications are Ultima Keyboard space 3D pro, GT Sports Racing Online, Fitness Ultimate 2o21, Wi-Fi pass code unlock, video mixer editor pro, RT news, UC Browser, Clean It Reface Ultra, live photo animator, ultra-camera HD, water drinker reminder, magic mix, etcetera. Researchers have identified more than 151 applications that, once installed on phones, can carry out fraudulent activities.

Sethurathnam Ravi BSE Chairman also acknowledges that the government of India has taken measures to eradicate cyber-crime. Local police have consistently arrested fraudsters and also investigated promoters of such applications. The government of India banned Chinese applications to protect investors. A comprehensive list of fake applications was circulated to spread awareness, Mr. Ravi concludes.

The government believed that a streamlined tax system and a single market would increase operational effectiveness, particularly for MSMEs

According to the Ministry of Micro, Small, and Medium Enterprises, there were more than 7.9 million MSMEs in India as of March 27, 2022. These enterprises account for more than 29 per cent of the GDP and 50 per cent of all exports from India. Additionally, MSMEs are responsible for 30 per cent of the country’s manufacturing production. In the 2022 Statistareport, almost 110 million Indians worked in MSMEs in FY16. Urban areas have much higher MSME employment than rural ones. Micro businesses, of all firm sizes, represented the greatest proportion of employment in the country during the studied period.

MSMEs form the backbone of India. To bring more ease to this crucial sector, the Indian government introduced the Goods and Services Tax (GST) Act on March 29, 2017, which became effective on July 1st of that same year. The government believed that a streamlined tax system and a single market would increase operational effectiveness, particularly for MSMEs.

The Benefits of GST

The Benefits of GST Sethurathnamravi write about Business MSMEs

The following are the benefits and future objectives of the GST Act:

The number of indirect taxes has decreased.

Since there are fewer GST compliances, filing your GST return won’t take up a lot of your time.

Complete GST registration can be done online.

After obtaining GST registration, it is simple to conduct interstate business through e-commerce operators.

Through online procedures, the GST has regulated unorganised business sectors.

Once a GSTIN is allotted, it can be used for all GST facets.

GST provides a composition plan to pay taxes at a set rate while lowering the amount owed in taxes and tax rates.

Having fulfilled the compliance, you can easily claim an input tax credit.

Under GST registration, tax avoidance is easy to spot.

The endeavour is to put ever more companies under the GST.

The consumption of goods and services will be encouraged.

GST sets reasonable prices for a product or service.

However, a study done by the Reserve Bank of India (RBI) on GST’s one-year completion shows that the new tax act has unquestionably raised operating expenses for MSMEs. These enterprises find it challenging to separately invest in computer infrastructure and GST-related services from CPAs and tax experts. Despite the fact that GST offers a lot of benefits, MSMEs seem to be taking time to become accustomed to the new tax structure.

As the GST Turns 5, How Are Businesses Faring?

Earlier this year, in 2022, Local Circles reached out to Indian business people, collecting their feedback on the new role of GST in their professional lives. The findings of the survey include:

Compared to pre-GST business taxation, 37% of enterprises are spending more time on GST compliance.

50 per cent of enterprises claim that their monthly accounting costs have risen since the introduction of GST.

75 per cent of enterprises find the matching of invoices for outputs and inputs to be the primary problem with GST.

Only 45 per cent of enterprises are delighted with 5 years of GST, whereas 24 per cent express discontent.

Connection troubles, logging-in delays, and submitting the information are some of the other major issues businesses are facing while on the GSTN website.

Concerns and Recommendations with Respect to GST

Over-MB documents cannot be uploaded to the portal; this limitation has to be extended.

E-invoicing is valid for 24 hours only; either the time restriction should be extended or e-invoices should automatically be emailed to enterprises.

From October 1, 2022, e-invoicing is applicable if the turnover exceeds Rs 10 cr; it should not be so for MSMEs.

GST registration is done online, but physical verification is carried out by state GST departments. As a result, MSMEs must interact with the GST department staff, which might give way for corruption.

It is challenging to determine if a new registration falls under state or central jurisdiction. Regarding their state jurisdiction office details, new registrants or taxpayers often face a lot of misunderstanding.

There are numerous legal and factual disputes; thus, the Income Tax Department needs a separate tribunal.

Petroleum products are still exempt from GST.

How the Indian Government Is Relaxing GST for MSMEs

The Government of India has been taking numerous actions to create a more favourable environment for the growth of MSMEs because it is aware of the enormous contribution of the sector. It has relaxed various MSME-related rules as part of the GST regime. For example, the initial exemption level for commodities, which was Rs. 20 lakhs, has been raised to Rs. 40 lakhs. The annual threshold for the Composition Program was raised to Rs. 50 lakhs for services and Rs. 1.5 crore for commodities. Those dealing in composition are now permitted to offer services.

GST intends to broaden the base of taxpayers, mostly MSMEs, and it might place a burden on them in terms of compliance and the related expenditures. However, in the course of time, GST will make these MSMEs more competitive by creating a level playing field between them and large corporations. Additionally, these Indian MSMEs would be able to compete with overseas rivals from low-cost manufacturing hubs like Bangladesh, China, and the Philippines.

Author:

Sethurathnamravi Ravi

Sethurathnam Ravi BSE(S Ravi) is the former Chairman of Bombay Stock Exchange Limited (BSE) and Founder and Managing Partner of Chartered Accountants’ firm Ravi Rajan & Co., an advisory and accountancy firm, headquartered in New Delhi, India. S Ravi is a Post Graduate in Commerce and holds a diploma in Information System Audit (DISA). Mr. Ravi gives his suggestions on how to make GST friendly, for most of the people to abide by the tax paying mechanisms.

Sethurathnam Ravi BSE (S Ravi) is the former Chairman of Bombay Stock Exchange Limited (BSE) and Founder and Managing Partner of Chartered Accountants’ firm Ravi Rajan & Co., an advisory and accountancy firm, headquartered in New Delhi, India. S Ravi is a Post Graduate in Commerce and holds a diploma in Information System Audit (DISA). He is an Associate Member of Association of Certified Fraud Examiners (CFE), USA and is also registered as an Insolvency Resolution Professional.

Sethurathnam Ravi BSE on his latest talk on 5 years of GST with Tarun Nangia, presents his views on the journey of GST in India since its introduction 5 years ago. According to him, the Goods and Services Tax has been a major reform across India and so far, it has been a successful journey. He also makes four suggestions on how to make GST friendly, for most of the people to abide by the tax paying mechanisms.

“First of all, on the platform side, what happens is one person makes a wrong entry and there needs to be a corrective step which takes time. So for that, there should be empowerment which will happen slowly at the assessing person’s level, through the online system where we can produce documents to make the correction. That is one thing which will go a long way in sort of practically helping the cause because the rectification itself is a process”, Mr. Ravi explains.

The second point he details is that, when looking at the compensation sess, we can find that it is something to be done with. He also says that it was of course addressed by the last GST council. “But I think it has to be done with, because compensation sess is one thing that we do away as there are no freebies as far as this is concerned” Mr. Ravi said.

Sethurathnam Ravi, popularly known as S Ravi is the former chairman of Bombay Stock Exchange Limited (BSE). Currently he is the Founder and Managing Partner of Ravi Rajan & Co., an advisory and accountancy firm, headquartered in New Delhi, India.

When the Finance Minister of India Nirmala Sitharaman was all set to present the Union Budget on February 1, for the financial year 2022-23, rebate in taxation, simplifying investment and offering of further incentives to the Indian start-ups and MSMEs were the expectations from the same. After the presentation of the budget, Sethurathnam Ravi, the financial expert shares his views on the present taxation rates, the GST and how it affects the SMEs and the MSMEs.

Sethurathnam Ravi (S Ravi) Founder and Managing Partner, Chartered Accountants’ firm Ravi Rajan & Co. said, "Expectation on rationalization of GST is there so that there is relief to small producers specifically within the food and Pharma sectors. I believe that there will be larger focus on few industries like semiconductors, lithium batteries, infrastructure for renewable energy and Electric Vehicles and special boost to Green Energy therefore we can expect major measures in this direction."

After the presentation of the Union Budget 2022, Sethurathnam Ravi expects that there will be some relief for the SME and MSME space with over 40 percent workforce engaged in the latter. In the last few years, we have seen, despite a strong covid outburst, a very strong recovery in terms of collection in the form of GST. According to Mr. Sethurathnam Ravi it has been a very progressive journey. It was full of challenges of acceptability. But now it has been accepted. The financial expert says that what is more important is how we address to the lower category of people, i.e., the MSME and the SME's who have to bring in more awareness and to make the cost of compliance lesser.

Sethurathnam Ravi also suggests that a platform should be created where data sharing can happen, an open-source data platform between the banks, the SMEs, the MSMEs and the GST collection. With this possible, the bankers can review the collection, the credit record, turnover record, services record etc, in a harmonious way. Mr Ravi concluded by saying that this is very important from the long-term perspective.

Sethurathnam Ravi, popularly known as S Ravi is the former chairman of Bombay Stock Exchange Limited (BSE). Currently he is the Founder and Managing Partner of Ravi Rajan & Co., an advisory and accountancy firm, headquartered in New Delhi, India. He is also an Associate Member of Association of Certified Fraud Examiners (CFE), USA, and also a registered Insolvency Resolution Professional.

Sethurathnam Ravi, popularly known as S Ravi is the former chairman of Bombay Stock Exchange Limited (BSE). Currently he is the Founder and Managing Partner of Ravi Rajan & Co., an advisory and accountancy firm, headquartered in New Delhi, India. ​ When the Finance Minister of India Nirmala Sitharaman was all set to present the Union Budget on February 1, for the financial year 2022-23, rebate in taxation, simplifying investment and offering of further incentives to the Indian start-ups and MSMEs were the expectations from the same. After the presentation of the budget, Sethurathnam Ravi, the financial expert shares his views on the present taxation rates, the GST and how it affects the SMEs and the MSMEs. ​ Sethurathnam Ravi (S Ravi) Founder and Managing Partner, Chartered Accountants’ firm Ravi Rajan & Co. said, “Expectation on rationalization of GST is there so that there is relief to small producers specifically within the food and Pharma sectors. I believe that there will be larger focus on few industries like semiconductors, lithium batteries, infrastructure for renewable energy and Electric Vehicles and special boost to Green Energy therefore we can expect major measures in this direction.”

After the presentation of the Union Budget 2022, Sethurathnam Ravi BSE expects that there will be some relief for the SME and MSME space with over 40 percent workforce engaged in the latter. In the last few years, we have seen, despite a strong covid outburst, a very strong recovery in terms of collection in the form of GST. According to Mr. Sethurathnam Ravi it has been a very progressive journey. It was full of challenges of acceptability. But now it has been accepted. The financial expert says that what is more important is how we address to the lower category of people, i.e., the MSME and the SME’s who have to bring in more awareness and to make the cost of compliance lesser.