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Tax arrears of Gujarat industrial units at Rs 30,000 crore

Tax arrears of Gujarat industrial units at Rs 30,000 crore

The combined tax arrears of over 48,000 industrial units in Gujarat stood at Rs 30,000 crore as on June 30, 2019. Official sources in the state finance department said the taxes that remained unpaid include sales tax and value added tax (VAT) for the period before the introduction of the goods and services tax (GST) in 2017. Of these units, there are nearly 6,400 units with tax bills of more than Rs 10 lakh.

The figure includes long-pending dues, says PD Vaghela, commissioner of commercial tax, adding that over 50% of these units have gone for appeal mostly in sales tax and VAT related cases.

“We have formed teams to speed up the recovery process of these bills. Some of the units have not even paid taxes over the period of 15 years and more. Some units have closed down, but the authorities are in the process of slapping notices to owners of these industrial units,” said a senior official. Interestingly, many units failed to pay even GST, despite the fact that there are strict provisions including that of jail terms.

Vadodara tops the list of defaulting industrial units with unpaid taxes over Rs 10 lakh, with Rs 6,431 crore due from nearly 700 such units in the city. Some of the other districts with high amount of due taxes are Kutch (Rs 4,569 crore), Surat (Rs 4,250 crore), Morbi (Rs 2,766 crore) and Bhavnagar (Rs 1,722 crore).

The Gujarat government is estimating GST income to the tune of Rs 48,000 crore in the recently presented budget for 2019-20. In such a scenario, such a huge amount of unpaid taxes would hamper various development-related schemes. Sources in the GST department said that not only recovery, but strict actions were being taken to curb GST theft as in June 2019, and over 280 raids were conducted and GST theft of more than Rs 6,000 crore caught.

Source: Financial Express

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GST: Steady decline in number of return filers in last four months

GST: Steady decline in number of return filers in last four months

Total number of entities filing GST returns has seen steady declined in the last four months for which data is available. Between February and May this year, the number of entities filing GST return has declined by almost 8 lakh, which is nearly 10% of the total GST return filed in the country. According to latest official information, the number of entities that are required to file GSTR-3B form is around 1.03 crore while the number of entities that have filed return in May this year is little over 75 lakh. It means nearly one fourth of the businesses that are required to file return under the GST law have not done that.

The government admitted in the Rajya Sabha all the taxpayers admitted under GST were filing returns.

“The government is considering to put in place an extensive plan to hunt for these missing GST payers,” Anurag Thakur, minister of state for finance told the Rajya Sabha in response to a question adding that the measures will include tax officers visiting the concerned premises.

It’s bit ironical that during the same period the total number of businesses registered under the GST has gone up by 23 lakhs to 1.03 crore while the number of GST return filers (GSTR-3B) declined by over 10%.

While in February this year, almost 84 lakh of the total over 1 crore businesses registered under the GST had filed their returns, the number of filers declined to 82.5 lakh in March.

The same trend of decline in the number of GST filers further declined to 79 lakh business in April this year while in April it further declined to little over 75 lakh.

In February this year, the government’s gross GST collection was Rs 97,247 lakh crore, then it went up to Rs 1,06,577 crore in March and it an all-time high of Rs 1,13,865 crore in April this year before again declining to Rs 1,00,289 crore in May this year.

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Source: Financial Express
Important dates to remember for GST return filings

Important dates to remember for GST return filings

Filing of returns with the Government within stipulated dates is important for a taxpayer in order to avoid incurring any Interest and Penalty.

Forms GSTR-1 AND 3B are to be filled by a person registered under GST for each month other than the people who are registered under the composition scheme.

The important dates that should be remembered for filing GST returns are:

GSTR-3B is to be filed by all taxpayers and the last -date to file is 20th July 2019.

GSTR-1 is to be paid by taxpayers whose turnover is below Rs. 1.5 Crore and also not opted for Monthly Return. The last date to file is 31st July 2019.

GSTR-1 is to be paid by taxpayer s with turnover above Rs. 1.5 Crore or opted for Monthly returns. The last date to file is 11th July 2019.

GSTR-9 is an annual return and the last date to file is 31st August 2019.

For GSTR-9A, the annual return is to be filled by Composition Dealers and the last date of filing is 31st August.

GSTR-9C is a reconciliation statement to be filled by taxpayers with aggregate turnover exceeding Rs. 2 crore from July 2017 to March 2018. The last date to file it is 31st August 2019.

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Source: KNN-India
Nirmala Sitharaman Explains How GST Filing Will Be Simplified

Nirmala Sitharaman Explains How GST Filing Will Be Simplified

Finance Minister Nirmala Sitharaman on Friday said that the Goods and Services Tax (GST) processes were being further simplified while adding that businesses with less than Rs. 5 crore annual turnover will need to file quarterly GST return.
She also announced to increase special additional excise duty and road and infrastructure cess on petrol and diesel by one rupee each, hike in customs duty on gold and precious metals to 12.5 per cent and imposing nominal basic excise duty on tobacco products and crude.

The Union Budget 2019-20 also provides for exempting import of certain defence equipment from basic customs duty, reducing customs duty on certain raw materials and capital goods, and rationalisation of export duty on raw and semi-finished leather.

“The threshold exemption limit for a supplier of goods is proposed to be enhanced from Rs. 20 lakh to an amount exceeding Rs. 40 lakh. Taxpayers having an annual turnover of less than Rs. 5 crore shall file the quarterly return,” she said.

She said that a fully automated GST refund module shall be implemented. “Multiple tax ledgers for a taxpayer shall be replaced by one,” she said. The Budget proposes to move to an electronic invoice system wherein invoice details will be captured in a central system at the time of issuance.

“This will eventually be used to prefill the taxpayers’ returns. There will be no need for a separate e-way bill. To be rolled out from January 2020, the electronic invoice system will significantly reduce the compliance burden,” said Ms Sitharaman.

The Finance Minister said that the landscape of indirect tax has changed significantly with the implementation of GST.

Terming it as a “monumental reform”, Ms Sitharaman said the GST regime has brought together the centre and the states with the result 17 taxes and 13 cesses became one and a multitude of rates instantly became four.

“Almost all commodities saw rate reduction. Tens of returns were replaced by one. Taxpayers’ interface with tax departments got reduced. Border checks got eliminated. Goods started moving freely across states, which saved time and energy. The dream of ‘One Nation, One Tax, One Market’ was realised,” she said.

The Finance Minister said that GST rates have been reduced significantly where relief of about Rs. 92,000 crore per year has been given. “There is a need to unload the baggage and allow the business to move on, as more than Rs. 3.75 lakh crore is blocked in litigations in service tax and excise,” she said.

The budget proposes a dispute resolution-cum-amnesty scheme — Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 — will allow quick closure of these litigations. The relief under the scheme varies from 40 per cent to 70 per cent of the tax dues for cases other than voluntary disclosure cases, depending on the amount of tax dues involved.

Describing ‘Make in India’ as a cherished goal, the Finance Minister proposed an increase in basic customs duty on certain items so as to provide domestic industry a level playing field. These items include PVC, cashew kernels, vinyl flooring, tiles, metal fittings, mountings for furniture, auto parts, certain kinds of synthetic rubbers, marble slabs, optical fibre cable, CCTV camera, IP camera, digital and network video recorders.

She also proposed to withdraw exemption from customs duty on certain electronic items which are now being manufactured in India.

To encourage domestic publishing and printing industry, 5 per cent customs duty will be imposed on imported books. To further promote domestic manufacturing, the budget proposes customs duty reductions on certain raw materials and capital goods.

These include certain inputs of CRGO sheets, amorphous alloy ribbon, ethylene dichloride, propylene oxide, cobalt matte, and naphtha, wool fibres, and input for manufacture of artificial kidney and disposable sterilised dialyzer, and fuels for nuclear power plants.

The Union Budget proposes to increase special additional excise duty and road and Infrastructure cess each by one rupee a litre on petrol and diesel.

“Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol,” she said.

Nirmala Sitharaman also announced an increase in customs duty on gold and other precious metals from 10 per cent to 12.5 per cent. The Budget also proposes rationalisation of export duty on raw and semi-finished leather to provide relief to the sector.

Ms Sitharaman said that tobacco products and crude attract National Calamity and Contingent duty which in certain cases is being contested on the ground that there is no basic excise duty on these items. To address this issue, the Budget proposes to impose a nominal basic excise duty on tobacco products and crude.

The Finance Minister proposed a few amendments to the >Customs Act. She said: “Recent trends reveal that certain bogus entities are resorting to unfair practices to avail undue concessions and export incentives.”

She announced that misuse of duty-free scrip and drawback facility involving more than Rs. 50 lakh rupees will be a cognizable and non-bailable offence.

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Source: NDTV.
Businesses to declare mismatch in GST returns form, outward supplies in annual returns: Finance Ministry

Businesses to declare mismatch in GST returns form, outward supplies in annual returns: Finance Ministry

The Finance Ministry Wednesday said any mismatch in GST monthly sales return and outward supply details will have to be reported in the annual return form and due taxes should be paid.

In a clarification on annual returns and reconciliation statement, the ministry said it has received queries from businesses asking whether the primary source of data for the filing of the annual return and the reconciliation statement should be GSTR-1, GSTR-3B or books of accounts.

While form GSTR-1 is an account of details of outward supplies, GSTR-3B is where the summaries of all transactions are declared and payments are made.

The ministry said information in form GSTR-1, GSTR-3B and books of accounts should be synchronous and the values should match across different forms and the books of accounts.

If the same does not match, there can be broadly two scenarios, either tax was not paid to the government or tax was paid in excess.

“In the first case, the same shall be declared in the annual return and tax should be paid, and in the latter, all information may be declared in the annual return and refund (if eligible) may be applied through Form GST RFD-01A,” the ministry said.

Further, no input tax credit can be reversed or availed through the annual return. If taxpayers find themselves liable for reversing any ITC, they may do the same through Form GST DRC-03 separately, it added.

It also said if a taxpayer has not paid, short paid or has erroneously obtained/ been granted a refund or has wrongly availed or utilized ITC then before the service of a notice by any tax authority, the taxpayer may pay the amount of tax with interest. In such cases, no penalty will be levied on such taxpayer.

“Therefore, in cases where some information has not been furnished in the statement of outward supplies in Form GSTR-1 or in the regular returns in Form GSTR-3B, such taxpayers may pay the tax with interest through Form GST DRC-03 at any time. In fact, the annual return provides an additional opportunity for such taxpayers to declare the summary of supply against which payment of tax is made,” it added.

GSTR-9 is the annual return form for normal taxpayers, GSTR-9A is for composition taxpayers, while GSTR-9C is a reconciliation statement. The last date for filing an annual return in August-end.

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Source: Economic-Times
GST proved to be consumer, assessee friendly’, writes Arun Jaitley on two years of rollout

GST proved to be consumer, assessee friendly’, writes Arun Jaitley on two years of rollout

Former finance minister Arun Jaitley, who introduced the Goods and Services Tax (GST) on July 1 in 2017, on Monday stated that the new tax regime “proved to be both consumer and assessee friendly.”

Jaitley, in a blog, wrote: “After two years, one can confidently argue, without fear of contradiction that GST proved to be both consumer and assessee friendly. The high taxation of pre-GST era pinched the consumers’ pocket and acted as a disincentive against tax compliance. The last two years have seen each of the meetings of the GST Council reducing the tax burden on consumers as the tax collections improved.”

jaitley

He mentioned that “the assessee base in the last two years has increased by 84%.”

Giving “response to certain misconceived ideas,” Jaitley said: “Many warned us that it may not be politically safe to introduce the GST. In several countries, governments lost elections because of the GST. India had one of the smoothest transformations. Within the first few weeks of the implementation, the new system settled down.”

On GST’s simplification and compliance, he said: “There is now a single registration system which works online and the procedures for the trade and business are reviewed and simplified regularly.”

Commenting on the pre-GST era, he stated that, “GST merged seventeen different laws and created one single taxation. The pre-GST rate of taxation as a standard rate for VAT was 14.5%, excise at 12.5% and added with the CST and the cascading effect of tax on tax, the tax payable by the consumer was 31%. The GST changed this scenario completely. Today, there is only one tax, online returns, no entry tax, no truck queues, and no inter-state barriers.”

He highlighted that the GST Council “worked on the principle of consensus” which “added to the credibility of the decision-making process.”

The former finance minister further stated that GST could become a “two-tier tax” process.

“Except on luxury and sin goods, the 28 percent slab has almost been phased out. Zero and 5 percent slabs will always remain. As revenue increases further, it will give an opportunity to policymakers to possibly merge the 12 percent and 18 or cent slab into one rate, thus, effectively making the GST a two-rate tax,” he said.

Source:Times-of-India.

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35th GST council meet: Single return for all businesses from January 1, 2020

35th GST council meet: Single return for all businesses from January 1, 2020

The GST Council Friday extended the tenure of the anti-profiteering authority by two years till November 2021 and allowed the use of Aadhaar as proof for obtaining GST registration while referring tax cut on electric vehicles and their chargers to an officers’ committee.

The Council’s meeting, chaired by Finance Minister Nirmala Sitharaman, also approved imposing a penalty of up to 10 percent of the profiteered amount on entities for not passing on benefits of GST rate cuts to consumers, as against the current norm of levying a maximum fine of Rs 25,000.

Also, it extended the date for the filing of annual Goods and Services Tax (GST) returns for 2017-18 fiscal by two months till August 30, 2019. Also, the date for barring non-filers of GST returns for two consecutive months from generating e-way bills for transporting goods has been extended by two months till August 21, 2019.

Briefing reporters after the 35th meeting of the Council, Revenue Secretary A B Pandey said the new GST return filing system would come into effect fully from January 1, 2020.

The Council also approved the rollout of an electronic invoicing system on a pilot basis from January 1, 2020, made it mandatory for GST-registered multiplexes to issue e-tickets, and also decided to seek Attorney General opinion on the issue of GST rate on lotteries.

Pandey said the Centre has shared details relating to the generation of fake invoices with the states, and the Council has given in-principle approval to launch a pilot project on e-invoices from January 1.

According to the proposal, entities with a turnover of more than Rs 50 crore will be required to generate electronic invoices on a government portal for B2B sales.

He said it would be mandatory for multi-screen cinema halls to issue e-tickets, which would ensure that the tax revenues accruing to Centre and states are deposited in the Exchequer.

Explaining the rationale behind seeking AG opinion on taxing lotteries, Sitharaman said the principle of taxation under GST is that it should be one rate across the country, whereas in case of lotteries there were two rates being charged. “Hence it was decided to obtain clarity on Article 340”.

Currently, a state-organized lottery attracts 12 percent GST while a state-authorized lottery attracts 28 percent tax.

An eight-member group of state finance ministers could not reach a consensus on whether a uniform tax rate should be imposed on lotteries or the current differential tax rate system be continued.

To a query on whether there were discussions on further rate rationalization, Sitharaman said, “There wasn’t any specific thing on it… We have very clearly emphasized and every state was on board that simplification is the route through which we should approach the whole thing and the objective should be towards simplification”.

Pandey said the proposal to reduce GST rate on electric vehicles to 5 percent from the current 12 percent and that on chargers for e-vehicles to 12 percent from 18 percent has been referred to the fitment committee for fine-tuning.

Asked about revenue implication, Pandey said, “Currently there is no significant manufacturing of e-vehicles in India and the government wants to encourage domestic manufacturing”.

The Finance Ministry in a tweet said that Sitharaman in her opening remarks to the Council meeting said that “GST Council has much more work to do including simplification of GST Rules, rationalization of GST rates & bringing more items in the ambit of GST among others”.

The Council also passed a resolution acknowledging the stellar role played by former Union Finance Minister and chairman of Council Arun Jaitley, expressing its gratitude and appreciation for the exemplary contribution made by him in making the GST Council a shining example of co-operative federalism.

Source: Economic-Times.

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Tax body seeks an extension of GST return filing by four months

Tax body seeks an extension of GST return filing by four months

Tax and legal consultants Wednesday complained about the time-limit of three months given to file the GST returns for 2017-18 as hundreds of amendments, notifications and circulars have made the Act very complex.

Officials of the Tax Bar Association, a body of over 400 members of chartered accountants, company secretaries, cost advocates, and tax consultants, said that the government has made the entire GST procedure and filing of returns very “confusing with hundreds of changes in the rules and taxes”.

“The government made available GST annual returns 9, 9A and 9C for 2017-18 online in March, 2019 and offline in April, 2019, after nearly 20 months and they are giving only three months to understand and file the most complex return form in the history of Indian taxation,” Tax Bar Association (TBA) president Gopal Singhania said at a press conference here.

To add to this, the taxpayers and consultants are also required to keep in mind the hundreds of amendments and clarifications issued by the government since the inception of GST in July 2017.

“To illustrate the intensity, it may be noted that besides major amendment in the GST Act in February 2019, over 200 tax notifications, including amendments in rules, about 180 tax rate notifications, over 100 circulars, 20 orders, over 125 press releases, and over 50 FAQ series and flyers have been issued till the date,” Singhania said.


Further, the press releases and clarifications on certain points “lack clarity” and at some places, these are “against the GST laws” and need reconsideration, while some clarifications have “even increased the confusion” already prevailing in the minds of taxpayers, tax consultants and auditors, he added.

Singhania suggested that a one-time revision of monthly or quarterly returns is a crucial need for proper filing of annual return and the due date of filing of GSTR 9, 9A and 9C for 2017-18 and 2018-19 should be notified to be kept together so that a total reconciliation can be done for both the years.

“This will help in better compliance and reporting, especially the SMEs who have been struggling with increased accounting needs after GST.

Alternatively, the due date for filing GSTR-9, 9A and GSTR-9C for the year 2017-18 should be extended by at least four months till October 31, 2019,” he urged, adding the problems should be resolved with clear instructions in line with the prescribed law.

TBA Vice President Sanjay Kumar Sureka said, “It is very crucial for the government to understand that the present form and law are not in agreement at certain places and are cumbersome as well as ambiguous to some extent.

“It is practical as well as reasonable to appreciate the fact that as these forms and expectations there under are unreasonably complex and prone to error and mistake, hasty and unclear filing will only deteriorate the present situation that was created due to the chaos that occurred in 2017-18.

“The association’s Indirect Taxes Committee Chairman Bikash Agarwala said that the data auto-populated in GSTR-9 does not match with monthly GST returns at many places and the form is also asking for the details, which were never required to be maintained since the inception of GST.

Explaining it further, he said: “Many details asked for in the annual return and audit report are confusing in nature and despite repeated representations, no clarification has been issued by the government till date.

Unlike other tax returns, there is no option to revise monthly or quarterly returns under GST which is the main cause of the entire prevailing situation.

“It has not even been clarified as to what should be the basis of filing the annual return, GSTR 3B or GSTR 1 or books of accounts, Agarwala claimed.

TBA member Raginee Goyal stated that the audit report in Form-9C is asking the auditor to certify “true and correct” instead of “true and fair”.

“So the age-old concept of audit under indirect taxes has now undergone a significant change in the form GSTR-9C.

Hence, it is not justified to get the certification from the auditor that the records are true and correct.

‘To err is human’ and the government must understand this fact that auditors are humans,” she added.

Goyal demanded that the concept of ‘true and fair’ must be brought back, at least till the GST law stabilizes.

Source: Economic-Times.

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All You Need to Know About the New Monthly GST Return Filing System

All You Need to Know About the New Monthly GST Return Filing System

The government on Tuesday unveiled the new goods and services tax (GST) return forms that will make the process of filing monthly returns simpler for taxpayers.

The finance ministry has also put in place a transition mechanism which allows taxpayers to try the new return filing forms during July-September, but it will become mandatory only from October. Here is everything you need to know about the new monthly GST return filing mechanism:
– Currently, companies and businesses file tax returns via GSTR-3B or summary form and GSTR-1, which entails details of outward supplies.

– The new return mechanism will have three forms – one main return form (Form GST RET-1) and two annexures (Form GST ANX-1 that will capture details of outward supplies and Form GST ANX-2 that will be the purchase form). The new mechanism comes with some offline tools as well.

– From July 2019, businesses would be able to upload invoices using the Form GST ANX-1 offline tool on trial basis for familiarisation.

– They would also be able to view and download, the inward supply of invoices using the Form GST ANX-2 offline tool under the trial programme. The summary of inward supply invoices will also be available for view on the common online portal.

– Additionally, from August, users can import their purchase register in the offline tool and match it with the downloaded inward supply invoices to spot mismatches.

– It is important to note that this trial would have no impact at the back end on the tax liability or input tax credit of the taxpayer during July-September. In this period, taxpayers shall continue to fulfil their compliances by filing GSTR-1 and GSTR-3B. Failure to do so will attract penalties.

– Large taxpayers, with aggregate annual turnover over Rs 5 crore in the previous fiscal year, would upload their monthly Form GST ANX-1 from October 2019 onwards.

– Small taxpayers, who have a turnover of up to Rs 5 crore and file returns quarterly, will need to file the first compulsory Form GST ANX-1 only in January 2020 for the quarter ended December 2019.

– Invoices can be uploaded in Form GST ANX-1 on a continuous basis both by large and small taxpayers from October 2019 onwards.

– Form GST ANX-2 may be viewed simultaneously during this period, but no action shall be allowed on such form.

– During October and November 2019, large taxpayers would continue to file Form GSTR-3B on monthly basis. They would file their first Form GST RET-01 for the month of December 2019 by 20 January 2020.

– Small taxpayers would stop filing Form GSTR-3B and would start filing Form GST PMT-08 from October 2019 onwards. They would file their first Form GST-RET-01 from 20 January 2020 for the quarter December 2019.

– From January 2020 onwards, Form GSTR-3B shall be completely phased out and all taxpayers shall be filing Form GST RET-01.

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Source: News18.
Restaurant body suggests dual GST structure to FinMin

Restaurant body suggests dual GST structure to FinMin

The National Restaurant Association of India (NRAI) has, in a letter written to the Finance Ministry, suggested a dual GST structure for the industry, reported The Economic Times.

The body, which represents over five lakh restaurants across the country, has demanded that restaurants be given the choice between the current five percent levy and a higher rate of 12 percent, but with the right to claim a refund on input taxes.

The current GST rate of five percent does not allow restaurants to claim input tax credit (ITC) against taxes they paid on expenses such as rent and raw materials.

The GST levied on taxes was reduced from 18 percent to five percent in November 2017. While the 18 percent rate allowed them the right to claim input tax credit (ITC), the five percent rate did not.

In the letter to the government, NRAI said denial of input tax credit has severely impacted the food industry and even led to the closure of 20,000 outlets last fiscal.

The letter added that in order to reduce their operating costs, food service providers were relying on unregistered, non-tax paying suppliers for almost half of their inputs.

“When ITC (input tax credit) is denied, it nudges a restaurant to go illegal. We are suggesting an option — those who don’t want to claim the input tax credit be levied 5 percent GST and those who are ready to pay 12 percent be allowed to claim the refund,” the article quoted NRAI President Rahul Singh as saying.

As per the letter, growth in the restaurant sector slowed to two percent in FY19, with most players having suspended their expansion plans. “Besides (other levies), 18 percent GST paid on food service from aggregators such as Swiggy and Zomato has become an additional cost to restaurants. The government is losing annual GST revenue of Rs 2,937 crore due to denial of input tax credit,” the report quoted the letter as stating.

The letter also pegs the size of the food industry at Rs 4 lakh crore in FY19, with a GST contribution of over Rs 14,500 crore (solely from the organised sector). An additional Rs 13,000 crore could potentially be added in tax revenue, taking into account the unorganised sector (which constituted around 65 percent of the industry in FY19), the report stated.

A dual GST structure would benefit 19.6 lakh restaurants that have an ITC of less than two percent of their turnover without GST. At the 12 percent GST rate, those with an ITC of between four percent and eight percent of their turnover would benefit six lakh restaurants, it added.


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Source: Money-Control.