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One year of GST: The successes, failures and what's next on the agenda

ET Bureau|Updated: Jun 29, 2018, 09.18 AM IST 

One year into the goods and services tax (GST) regime, early-day jitters have given way to general acceptance that this may not be the most perfect single tax system, but it’s working. There are many issues that remain to be addressed, but the fact that some of the knotty ones have been resolved gives rise to confidence that even these will be sorted out. Here’s how the past year panned out. 

Inflation rate didn’t rise: GST, it was widely feared, would cause inflation to rise, as with many countries that launched a single tax regime. That hasn’t happened in India. The recent spike in consumer inflation has been due to high food and fuel prices, unrelated to GST. What helped? The much-criticised multi-slab structure. It ensured the levy was as close as possible to the existing rate, which meant the incidence of tax didn’t rise. The second factor was the anti-profiteering authority. Though the body was set up after the GST rollout, the prospect of its establishment was enough to ensure businesses did not abuse the transition. 

Single national market: Long queues of trucks at state borders disappeared as checkposts were dismantled, creating a seamless national market. These barriers had restricted movement of goods across the country, leading to huge delays and increasing transaction costs for the logistics sector, eventually translating into higher costs for consumers. 

One tax nationally: A consumer in Kanyakumari now pays the same tax on an item as one in Jammu & Kashmir. GST has also allowed businesses to streamline distribution systems—production, supply chain, storage—to make them more efficient, having previously been forced to design them keeping state taxes in mind. 

Formalisation kicks off, tax base begins to widen: One of the expected benefits was that GST would encourage formalisation of the economy. Evasion would stop making sense, thanks to transparent digital processes and incentive of input credit and invoice matching. With number of registrations crossing 10 million, it seems more businesses are signing up for GST. Rise in the Employees’ Provident Fund Organisation subscriber base provides further evidence of the same. More people filing income tax returns could also have something to do with GST. 

Everyone wins: As many as 17 taxes and multiple cesses were subsumed into GST, aligning India with global regimes. Central taxes such as excise duty, services tax, countervailing duty and state taxes — including value added tax, Oct roi and purchase tax — were all rolled into one. The new regime provided for free flow of tax credits and did away with cascading due to tax on tax, boosting company financials and resulting in reduced prices for consumers. It also ensured a single law for the whole country with uniform procedures and rules, which reduces compliance burden and business complexity. The government sacrificed revenues, but improved compliance should cover any gap. 

WHAT HASN’T WORKED 

Compliance has miles to go: The biggest dampener was the compliance process, as information technology glitches took more than the anticipated time to be resolved. The filing system that was put in place in the beginning was quickly abandoned as businesses struggled with compliance. A new return form is being crafted to help make the process much less painful for businesses and is likely to be available soon. 

Cumbersome registration system: Multiple registration requirements have complicated things for industry, which was expecting simplicity. In many cases, registration is required in all states. Companies fear that multiple audits and assessments due to multiple registrations could make life more difficult for them going forward. 

New cesses crop up: While GST scrapped a multiplicity of taxes and cesses, a new levy in the form of compensation cess was introduced for luxury and sin goods. This was later expanded to include automobiles. A new cess on sugar is also being examined. 

Refunds problem for exports: The refund mechanism for exporters, including data matching law, besides procedures governing them, have irked the sector, particularly smaller entities that saw their working capital requirements rise. Though several efforts have been made to address the issue, it may require more intervention. 

WIN FACTOR: CONSENSUS & AGILITY 

War room saved the day: A GST Feedback and Action Room was set up to take care of initial launch issues. The government remained open to addressing issues as they cropped up, with feedback flowing in fast via phones, messages and even Twitter. Return filing dates were deferred, tax slabs were rejigged to address industry and consumer concerns and procedures and rules were amended to ensure hardships were alleviated.The officers’ committee — comprising state and central officials — still meets regularly to draw up options for the GST Council to act upon. 

GST Council delivered: The GST Council, comprising central and state representatives, was the kind of federal arrangement that could have easily been bogged down by ego and politics. The Centre has a 33% vote while the states account for 66%, with any dispute needing 75% support to be resolved. It has never had to vote on any issues, with just one dissent recorded so far. There may have been bickering and differences of opinion, but matters were always thrashed out and a painstaking consensus achieved. The council has found solutions to most issues and these have not been shoddy compromises but sound decisions that have only improved the single tax. The council has provided a template for more such structures where the Centre and states could work together. 

Next on the Agenda 

There is consensus among experts and industry that GST has made vast progress from its early days of teething troubles. It has settled in as far as the consumer is concerned, but businesses want to see improvement. A simpler tax fi ling regime, fewer slabs and a broader tax base are some things the government needs to address in the year ahead 

Expansion of tax base 

There are many goods that are still outside the GST net, which comes in the way of seamless flow of input tax credit. Key items outside its ambit are electricity, alcohol, petroleum goods and real estate. Among fuels, it may be possible to bring natural gas and aviation fuel within GST. But it may not be easy to do that with diesel, petrol and kerosene as most states are opposed to such a move. Getting real estate under GST may also be diffi cult as it will require a constitutional amendment. 

Tax slab rationalisation 

There are as many as six slabs, excluding exempt goods.Though most goods fall in the 12%, 18% and 28% brackets, there is a case for merging slabs to reduce complexity and classifi cation disputes. The 12% and 18% bracket could be merged into one single slab in the 14-16% range. 

Lower tax rate 

There has been a substantial reduction in the number of products in the 28% bracket with goods moved to the 18% one. There is further scope for cutting the peak rate on all products other than ‘sin’ goods. Products such as cement, paint, air conditioners, washing machines, refrigerators etc should also see a reduction in the tax rate to 18% from 28%. 

GST returns simplifi cation 

This is the biggest item on the agenda as far as businesses and compliance are concerned. The government has already taken an initiative in this direction with the proposed consolidation of all periodic returns into one. The committee set up for this task has been working on the new format and the IT-related changes changes required. A new and simplifi ed return fi ling process may become effective in the next six months. 

Legislative changes 

Over the past year, several issues that need to be fi xed through legislative changes have accumulated. Some of these relate to input tax credit, and the requirement of paying tax up front on various transactions such as deemed exports and subsequently claiming a refund. The government could introduce changes in the monsoon session to fix these niggles. 

More data analytics 

The government has already started detailed analysis of a number of data sets to plug leakage. The format of the e-way bill has been designed to capture invoicerelated information so that the government can use data analytics to identify concern areas and plug revenue leakages. Businesses have already started receiving notices about discrepancies between amounts mentioned in different GST returns and those reported on the e-way portal. Income tax return forms released for this year have also sought specifi c information in relation to GST. The government can use the granular data to check tax evasion. 

Anti-profi teering agency 

The agency, which was constituted for a period of two years, has been functional for about six months and issued a few orders following investigations. The GST Council needs to decide whether to wind it up after two years or keep it going until the tax regime matures.

EXPERT TAKE 

Goal Scored in Time: MS Mani, Partner, Deloitte India 

The goods and services tax has been one of the key enablers to improve the ease of doing business in India and has consolidated a plethora of taxes levied by the Centre and states into a common, fungible tax. Despite some initial hiccups caused by post-implementation changes in rates and compliance requirements accompanied by an inadequately prepared portal, the tax is entering the growth phase as is evidenced by the stabilisation of GST collections over the past two months. 

The expansion of the tax base being a necessary concomitant for the success of GST, it is expected that, in addition to the e-way bill, a few more anti-evasion measures will gradually be put in place. It is also necessary that it becomes the only indirect tax over a period of time by including products outside its purview such as petroleum products and levies outside its ambit such as stamp duty It is essential that all future changes are introduced keeping in mind their impact on all businesses, especially small and medium enterprises (SMEs) to enable them to be prepared as the success of a nationwide consumption tax depends on its acceptability across all sections of business. While the goal has been scored, it essential to carry the entire team along in all the forthcoming matches. 

GST 2.0 Needed: Pratik Jain, Indirect taxes leader, PwC 

If you examine impact of GST from the standpoint of various stakeholders — government, industry and consumers — it is certainly directionally positive. For consumers, prices of commodities have either gone down or been stable and accessibility has improved, given supply chain efficiencies. A common rate structure across states means decision making for consumers becomes easier. 

From the industry standpoint, except the initial technological challenges in filings and blockage of funds for exporters, GST has not caused any disruption. In many cases, there has been a saving of 3-5% due to incremental credits and vendor price renegotiation. 

From the government’s standpoint, there is definite expansion in the tax base with some revenue buoyancy over last few months as well. With the wealth of data available with the government and measures such as e-way bills, tax leakage is likely to be further plugged in the next year or so. Does it mean everything is perfect? 

Certainly not! Tax rates need to be further rationalised, compliance is to be simplified, dispute resolution and administrative aspects have to be looked into and GST system aligned with global best practices. That said, it’s a moment to feel proud of the country’s achievement, with a hope that GST 2.0, which is now in the works, will be a much better version than what we have now. 

Much Achieved, More Needed: Bipin Sapra, Partner, indirect tax, EY 

The triumph of GST lies in the fact that while it has successfully subsumed several state and central indirect taxes, reduced cascading and credit blockages, created a common market and brought uniformity of indirect tax law and rates across the country, its biggest achievement has been obtaining a broad consensus among all the states and the Centre, which has strengthened the federal character of the Indian fiscal system. 

During the year, multiple rates on goods and services have been evaluated and rationalised, given the possible leakage of revenue. The e-way bill system has been successfully implemented, difficult procedures of TCS and TDS (tax collected/deducted at source) have been kept in abeyance, and the anti-profiteering law has acted as a deterrent for most companies increasing their prices on account of GST. 

While the government has worked to solve many issues, considerable intervention is still required to bring GST to its full efficiency. The proposal to have a single return will simplify compliance and do away with matching requirements. 

Registrations need to be centralised for big service providers and, if that is not possible, assessments/ audits need to be centralised to avoid multiple interpretations of issues for the same entity. A lot has been achieved in this year of GST implementation and yet GST will continue to evolve as the law, procedures and rates are modified to suit the complex Indian market. 

Toddling Through: Suresh Nandlal Rohira, Partner, leader, GST and customs, Grant Thornton India LLP 

The first year’s journey was one of ups and downs--registrations and revenues went up and multiple compliances for taxpayers went down, with ease in movement of goods eliminating naka barriers. However, in spite of significant success in its first year of implementation, there still seems to be a long way to go for both the government as well as taxpayers in attaining a simplified GST regime. 

Simplification and standardisation of compliance—a single return instead of two or three--to ease taxpayers’ burden should continue to be of prime importance for the government, especially with repeated deferment of compliance dates due to systems challenges and also the formats, which are too complicated for many micro, small and medium enterprises (MSMEs) considering small, medium businesseshave a large share of registrations. 

The government should bring down the slabs from four to three as collections have been above the mark and accordingly rate moderation should be warranted, encouraging certain sectors boosting the economy. 

Undoubtedly, GST has received positive as well as negative responses as befits its characterisation as a toddler. However, further steps will bring out the true sense of One Nation One Tax. 

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Steep fall in firms wanting to be GST Suvidha Providers

BENGALURU: A year after the roll out of the Goods and Services Tax (GST), the competition among companies to become GST Suvidha Providers (GSPs) to route invoice filings to the central system has fizzled out. According to a source in the GST Network, of the 70 shortlisted GSPs only about 25 are active, with even big names such as Tally remaining inactive. 

A GSP offers a gateway to taxpayers to the GST Network by getting access to the APIs for uploading of invoices and filing returns. Some industry players have put the number of active GSPs lower at about 15. 

Even some of the companies who are relatively active as GSPs have made losses on their investments in the technological back-end and marketing. One such company, which is an active GSP but did not wish to be identified, has made only 10% of the Rs 25 crore revenue it was expecting from this business annually. 

The limited impact of GSPs on the 1 crore taxpayer ecosystem under GST is also evident through the number of invoices routed through them. Of the 370 crore invoices received by the GSTN in the past year, about 100 crore have been routed through GSPs, the source cited above said, adding that the GSPs such as Tata Consultancy Services, Reliance Corporate IT, Karvy, Vayana Private and IRIS have routed the most number of invoices. 

The GSTN is set to delist the inactive ones and approach other companies interested to become GSPs. According to the source, the agency has already sent communication to these companies two months ago seeking a status on their readiness. 

However, some companies who were shortlisted as GSPs have cited the frequent changes in the GST regime, the shaky portal of the GSTN, as well as simplification of filings as the main reasons for not seeing a big opportunity as they had envisioned earlier. 

Bharat Goenka of Tally cited the weak technology infrastructure of GSTN to handle queries around invoice matching as well as the technical challenges involved in being a GSP as the reasons for staying behind. 

“As a GSP, we would have to ensure we provide correct invoice matching to our clients, which would require that we would have to make high frequency queries to the GSTN. However, we were unsure of the ability of the GSTN to withstand the traffic of queries and to show the data,” ” Goenka told ET. Goenka, however, said that while they have received communication from the GSTN for being inactive, Tally is working with the agency on solutions to build more efficient APIs and creating light queries. 

One of the reasons for several GSPs to have lost their edge is also the simplification of the process by GSTN, which has actually been beneficial for taxpayers, according to industry members. 

The government suspended certain complex forms such as GSTR 2 meant for reconciliation of purchases, which has meant that many taxpayers do not have to rely on companies offering software solutions and hence also prefer to file the invoices online by themselves, which is also free of cost compared to the charges of around Rs 2,000-3,000 per annum being charged by some of the GSPs. 

“It is good that the government is trying to make compliance simpler for taxpayers, since you need more people complying to later bring them under a more structured system,” said Ankit Agarwal, managing director of Alankit, which is among the active GSPs. 

However, several companies shortlisted as GSPs do not see a big market opportunity as was envisioned. 

“The rules under GST were changing so frequently that it was difficult to keep adapting to the technology,” the CEO of the company that made losses on its investments said. 

Industry members also said that only those who gave additional value-added services as application service providers (ASPs) would be able to sustain. “Being a GSP-ASP requires domain knowledge in taxation and is not just a pure tech play. That is where many players were not able to match up to the requirements,” said Harishanker Subramaniam, national leader for indirect tax services, EY. 

However, the number of active GSPs is expected to rise slightly with some players selected in the second batch going live only recently. 

KPMG went live as a GSP only this month while Zoho is also expected to go live soon.

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By Mugdha Variyar, ET Bureau|Jun 29, 2018, 08.45 AM IST   

Used for Educational Purposes only

OUR BODY NEEDS NORMAL COOLING .DO NOT MAKE YOUR AC TO WORK LIKE A REFRIGERATOR

Running your AC at 27°C vs 18°C can cut your electricity bill by over 30%

Keep your AC temperature at moderate to high levels in order for power saving as well as cutting your electricity bill

Last Published: Thu, Jun 28 2018. 01 20 PM IST

The government may issue an advisory to all AC manufacturers and commercial buildings to keep the default temperature setting at 24 degrees Celsius. Photo: Aniruddha Chowdhury/Mint

In an effort to promote energy efficiency in air conditioning, the government may issue an advisory to all AC manufacturers and commercial buildings to keep the default temperature setting at 24 degrees Celsius. The advisory will not be binding. If heeded by all consumers, this can help save 20 billion units electricity annually, said the government statement . 

But does increasing the AC temperature result in substantial power savings?

How you save

A common misconception is that setting the thermostat at 18 degrees will cool down a room faster. However, that’s not true. It will take the same amount of time for the room to reach 26 degrees—which is significantly cooler than the average current outdoor temperature of 40 degrees in Delhi—whether you set the temperature at 18 degrees or 26 degrees. Of course, 18 degrees will be much cooler than 26 degrees, if that’s what you prefer.

Click here for enlarge

But you pay a price for lower temperature. When you set a lower temperature, the AC compressor works longer, which means more power consumption. On the other hand, if you increase the temperature to, say, 24 degrees, the compressor will work for much less time, leading to less power consumption.

Once the desired temperature is reached, the compressor stops functioning, and only the AC fan works. The compressor restarts once the thermostat detects increase in temperature.

“At 24 degrees, we are comfortable, even in high humidity situations, and the amount of energy used is much less than what it would have been at 18 or 22 degrees,” said Ajay Mathur, director general of TERI (The Energy & Resources Institute). 

What you save

Prasanto K. Roy, 51, a technology policy professional whose home in south Delhi was India’s first TERI GRIHA green home, has witnessed significant savings in electricity bills by setting the AC temperature higher.

Roy, who also has a condominium in Gurgaon, sets the AC temperature at 27 degrees during the day and moves to 28-29 degrees with a ceiling fan at low speed, if required, at night. “The bill that I get in my Gurgaon apartment is around ₹ 3,000. Comparable apartments in my building get electricity bills of ₹ 6,000-10,000. Though the apartment has six ACs, only about 1-2 are used at a time, but all are set at 27-29 degrees, which means that the compressors are mostly not on or are on only intermittently,” said Roy.

A study in India shows that we are acclimatized to be comfortable at higher temperatures of up to 29 degrees, provided other thermal comfort parameters are met, said Mili Majumdar, managing director, Green Business Certification Institute (GBCI) and senior vice-president, US Green Building Council. The perception of comfort is a cumulative of temperature, humidity and air velocity, she added. 

“Each degree increase in the AC temperature can save about 3-5% electricity,” said Majumdar. 

Increasing your AC temperature from 18 to 27 degrees can help you save around ₹ 6,240 in a year. Not only that, you also end up conserving 960kWh energy in a year (assuming your AC functions for eight months).

Things to remember

The power consumption of an AC doesn’t just depend on the temperature you set it at. “How much power your AC consumes depends on its star rating, the outside temperature, the hours of usage, size of the room, number of people in the room, insulation in the room, etc,” said Mathur.

If you are setting the AC at low temperature and using a quilt or a blanket, it is not only unhealthy, it is also pure wastage of energy.

Normal human body temperature is approximately 36-37 degrees and putting your body through extreme high temperature on the outside and low temperature on the inside can affect your health.

So increase the temperature of your AC and keep it at moderate levels in order to not only conserve power, but also save on electricity bills.

First Published: Thu, Jun 28 2018. 09 37 AM IST livemint-used for Educational purposes.

NRI (NON RESIDENT INDIANS )FIN PERFECT PLAN TO ESCAPE SCRUTINY BY INDIAN TAXMAN.

NRIs giving up Indian addresses to escape scrutiny by tax authorities

By 

Sugata Ghosh

, ET Bureau|

Updated: Jun 28, 2018, 12.02 PM IST

In the past few years, hundreds of non-resident Indians (NRIs) have been either summoned or served notices by the Income Tax (I-T) Department and Enforcement Directorate (ED) — sparking fear and unease among many in the diaspora who were asked to explain assets and earnings for certain years. 

Now, many have found a ploy to escape the glare of the Indian authorities and avoid the trouble that follows. It’s simple: they are changing the Indian addresses mentioned in their passports to the their current addresses in countries where they reside. This helps to establish and reinforce their tax residency status in the country concerned and stops the automatic flow of financial information to the government of another country (India). 

A large number of individuals named in the Paradise and Panama papers happen to be NRIs. 

The new address is recorded in their documents with overseas banks where they have the accounts — either in the names of family members or, companies and offshore trusts. Banks are the prime source of information on fund movements and assets for the Indian government. 

However, this source can dry up with the change in address. Overseas banks do not share information on their ‘tax residents’ with authorities in other countries. 

As long as the account holder’s address in a bank’s records is a local one, the bank passes on information only to the government of that country (and not India). 

It’s a loophole in the systematic information sharing arrangements that countries struck with each other to access data on undisclosed assets and produce evidence of tax evasion. 

Resident Indians pay tax in India on their earnings at home as well as abroad, but the tax NRIs pay to the Indian government is only on their income in India. 

“If an NRI is paying tax in a particular country, he or she is in a position to change the address in the passport to the present address in the foreign country. He is recognised as a tax resident of that country. This interrupts any exchange of information under Common Reporting Standard-…Many NRIs, I believe, have done this to avoid the inconvenience of responding to the I-T and other departments,” said senior chartered accountant TP Ostwal. 

As per changes in international tax legislations, financial institutions worldwide are required to report customers’ account information based on tax residence to the local tax authorities where the financials accounts are held. 

The general requirement for determining tax residency is selfcertification of either passport, national identity card, driving licence or other supporting documents such as utility, credit card bills. For an NRI, tax residence generally relates to the country where the person lives and works or where she has, or has had, the obligation to file a tax return or is subject to income tax. In the CRS forms, in which bank account holders have to share their details, many NRIs do not disclose their tax position in India but only mention the country of stay where they are tax residents. 

For instance, Belgium taxes residents following a source-based taxation policy, i.e., the place where the taxpayer manages wealth, lives and works. According to the Belgium financial institution format for CRS declaration, one can provide Permanent Residency card number and local address in the form and remain silent on the Indian tax position. 

“This results in them being out of CRS for Indian Authorities. It’s similar in the UK which follows a domicile-based taxation i.e. on number of days a resident stays in the country. Indian Authorities may not have possibly received any information about NRIs with local addresses,” said Mitil Chokshi, senior partner at Chokshi & Chokshi LLP. 

Brokers, certain collective investment vehicles, and some insurance companies – besides banks – have to report under CRS. In case of trusts, CRS rules require looking through the trusts to report the names of ultimate beneficial owners or individuals who control the trusts. A CBDT spokesperson did not comment on subject. 

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for Educational Purpose only

5 tips to increase IPO allotment chances.

 

“I’VE NOT BEEN ALLOTTED ANY SHARES IN THE LAST FIVE IPOS. WHAT AM I DOING WRONG?”

This is one of the most common complaints of investors after not getting shares allotted in IPOs. Whether you are a newbie or an experienced one, allotment in several recent IPOs has left investors confused and clueless about the whole process. As most of the recent public offers are attracting massive subscriptions, it is becoming harder for investors to get allotments. In our social streams and on this website, we are often asked about the IPO allotment process so we have put together this guide. Hopefully, this explains the process while also helping to increase IPO allotment chances.

First of all, we need to understand the allotment process in detail before taking steps to improve allotment chances.

IPO allotment process in India

Prior to October 2012, market regulator SEBI had mandated registrars to allot shares in the retail category on a proportionate basis in case of oversubscription. This means that an investor making an application of INR100,000 or INR150,000 stood to be allotted more number of shares than an investor making a bid of INR15,000. In IPOs where the demand is equal or less than the shares available, it used to work fine but the process naturally helped big applications when the demand exceeded availability. Many high-networth individual (HNI) investors channeled their money into retail category to corner shares and it did not go down very well with SEBI.

In October 2012, SEBI implemented a new allotment process that called for all retail individual investor (RII) applications to be treated equally. Under the new system, applicants are allotted at least the minimum application size, subject to availability of shares in the aggregate. Again, if the demand is less than the number of shares available in the retail category, every investor will get full allotment. In case of demand exceeding the availability of shares, then the maximum number of investors who can be allotted the minimum bid lot will be computed by dividing the total number of equity shares available for allotment to the category by the minimum bid lot. Under the current guidelines, no allotment is less than the minimum bid lot size.

Maximum RII Allottees = (Total number of shares available for RIIs)/Minimum bid lot

Practically speaking, it means that for IPOs with oversubscription, investors can only hope to get a single lot if they are lucky.

How to increase IPO allotment chances?

Now that we know the logic behind allotment, it is time to see what can be done to increase IPO allotment chances. As one can sense, there is not much that investors can do if there is too much demand for IPO shares. Nevertheless, there are ways to avoid the pitfalls and optimize the allotment results. Here are five simple ways to increase IPO allotment chances:

#1. No benefit for big application

As mentioned above, SEBI’s current allotment process treats all retail applications (less than INR200,000) equally. This means there is no advantage of making a big application of INR100,000 in case of oversubscription. Big applications only make sense in large IPOs where there is reasonable surety of retail segment remaining undersubscribed. A recent example is the INR11,372.64 crore IPO of General Insurance Corporation (GIC) where every retail investor stands to get allocation. Although the reasons behind this undersubscription are different, it serves as a good example.

#2. Different demat accounts

Since large applications are ineffective, one can go for using the same amount in making multiple applications from different demat accounts. Probability of successful allotment increases to six times when one goes for six applications of single lots than making one application of six lots. It is important to understand that these demat accounts need to be linked to different PAN accounts. In other words, one can’t make more than one application in his/her own name. It is best to ask friends and family members to open demat accounts and apply in IPOs. Opening new demat accounts is a breeze nowadays and several brokers open demat and trading accounts for free. What’s more, it is a matter of just a few hours with e-KYC.

#3. Price bids v/s cut-off bids

This is a tricky part as investors are often confused between price bids and cut-off bids. By selecting a specific price, investor tells the registrar that s/he is interested in buying shares at that price while cut-off simply conveys that the investor is flexible to buy at any price within the price band. This price is determined as the point of maximum demand. In a price band of INR100-105 per share, no bids below INR105 per share will be considered in allotment if the cut-off price is decided at INR105 per share. Thus, retail investors should place their bids at either cut-off or maximum price to increase IPO allotment chances.

#4. Avoid last moment rush

Many investors rely on subscription levels in HNI and QIB categories before placing their bids on the last day. This may be quite a smart way to figure out how an IPO is perceived by these well-informed categories but could turn out to be a disaster if your bank’s internet banking is down temporarily. One may not have funds in other bank accounts and additional work of adding demat account details may be required at the last moment. Of course, there is always the option of filling up physical forms, this is hardly an effective solution at the last moment. Even if one manages to fill the form, it may be too late. Several banks stop accepting applications after 4 PM on the last day.

#5. Avoid technical rejections

IPO applications may be rejected on technical grounds without the investor knowing about the errors. Starting 1 January 2016, all IPO applications are mandatorily through ASBA (Application Supported by Blocked Amount) mechanism and most investors apply through netbanking which minimizes potential errors of spelling mistakes, name mismatch, inaccurate cheque details. Nevertheless, applications are still rejected on technical grounds and something as simple as different names in bank account and PAN may result in a lost opportunity.

These are simple yet effective steps that increase your IPO allotment chances and ensure that your IPO application isn’t out of reckoning. Happy investing!

Source :-By Krishna Bagra -  October 15, 2017 

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