Execs Rush to Foreclose Car Leases Before GST

Lease rentals could rise by 25-30% in new tax regime

Corporate executives are rushing in their droves to foreclose existing car leases fearing a substantial increase in monthly payments once the goods and services tax (GST) is in place on July 1due to the absence of any transition mechanism.

Cab aggregators such as Uber and Ola that have about 30,000 leased cars also face this threat. Lease rentals could rise by 25-30% in the GST regime due to the rise in tax incidence.

The Centre is likely to raise the issue at the GST Council, the apex decision-making body, on June 30, when it meets before the midnight launch of the new tax, but no one is willing to take a chance.“We are looking at the issue and will take it to the GST Council,“ a senior government official said.

The transition rules provide relief to goods but leases seem to have fallen through the cracks.

An industry grouping that includes ALD, LeasePlan, Arval, TranzLease, Orix, Magma, AVIS, Clix Capital, Tata Capital, Ola, Uber, Sundaram Finance as well as the Tractor Manufacturers Association have petitioned the government seeking exemption from central goods and services tax on existing leases to prevent double taxation as central excise duty has already been paid on the vehicles. “We are flooded with requests to foreclose,“ said Hari Kaushik, president of TranzLease. “Our teams are working overtime to address this issue.“

Business dynamics for the industry are set to change completely with lease owners’ monthly payments rising.

The peculiar situation has arisen because such leases are treated as goods and not services and were accordingly being levied value added tax (VAT). The central excise tax had already been collected when these cars were purchased.

Under GST, which subsumes central excise and many state taxes, the levy will mean a kind of double taxation as excise has already been paid.

For example, if the basic monthly lease rent of a midsize car is ` . 25,000 under the current regime, it would face 12.5% VAT of . 3,125, taking the total to ` ` . 28,125. Under GST, however, the total will be ` . 35,750.That’s based on GST of 28% plus a 15% cess, making for an increase of 30%.

“At Ola Fleet Technologies, we run a leasing programme for tens of thousands of driver-partners who may not be able to afford buying a car of their own,“ said Shalabh Seth, CEO of Ola Fleet Technologies Ltd, a wholly owned subsidiary of Ola.

These driver-partners currently pay 14.5% VAT. In the proposed GST regime, they will have to bear GST rates of 29% to 43% on cars already leased, as an outcome of double taxation on existing leases.

“This will have an adverse impact on their livelihoods, setting them back by over ` .1 lakh for the remaining period of the lease, making it unviable to sustain their business,“ he said.

It’s not just cars that could be hit. More than 150,000 tractors are also impacted on account of incre account of incremental tax burden besides trucks, according to industry experts.


Date: 26th June 2017

Source: Economic Times

5 mistakes to avoid as a new employee

If you have joined a new workplace, make sure you don’t commit these gaffes as these can affect your career progression or mar your reputation, says Riju Dave.


Every office has its own norms of functioning and work practices. The biggest favour you can do yourself as a new employee is to observe and adapt to this routine, instead of following your previous office’s schedule or simply doing as you please. Be it the way office communication is carried out, paperwork is handled, work flow takes place, or dress code is followed, you should pay close attention and ask questions, if necessary. If you try to be different or show disregard for the work processes and protocol, you not only risk being ostracised by colleagues but, more importantly, it could harm your career as you may end up offending your boss.


Eager to please the new bosses, many employees make the mistake of taking on too many assignments and then failing to deliver. This is a blunder for an employee at any stage, more so for a fresh worker. Do not set targets you can’t possibly achieve. The best way to tackle this problem is to make a realistic work plan, discuss it with your boss and proceed accordingly. At the same time, don’t follow a set schedule, doing only what you are asked to do.Take the initiative to do more than your mandate, assume greater responsibility, help colleagues and multitask without acting arrogantly.This will easily endear you to your new boss and colleagues.


There is no bigger put-off than a new colleague who is a slouch, is unhygienic or has poor social skills. The way you dress, talk, maintain your cubicle, treat support staff and handle your work schedule, all have a bearing on how you will be treated or how long you will last in the organisation. If your attire is too casual or garish, your work area is messy, you come in late or leave early habitually, speak rudely to the housekeeping staff or are generally overbearing in your attitude, you will not be tolerated for very long. Make sure you are polite, dressed well and are genial in your dealings with the staff.


This is one of the most obvious and, yet, among the most flouted of rules. While it is natural to feel intimidated in a new environment, don’t isolate yourself and pass up opportunities to talk or socialise with your colleagues. This may create a wrong impression of being snobbish or having low confidence and self-esteem. At the same time, don’t act arrogant, be too talkative or familiar with colleagues, or take every chance to display your knowledge and skills at the expense of other team members. You will be sidelined immediately. Instead, show keenness to know and learn about the new work.


This is another big no-no. Never gloat about your previous office, praise its work culture, act as if it was a better place to work in or constantly compare it with the existing company. It will be seen as an indirect criticism of your current organisation and will not go down well with your colleagues or bosses. If you are in a senior, managerial position, don’t be in a hurry to change the work systems according to your previous workplace. Appreciate the existing culture and bring in changes slowly, giving the team time to absorb these. At the same time, don’t criticise your former employers because you will be seen as a whiner or, worse, a gossip.


Date: 26th June 2017

Source: Economic Times

MANPOWER MANAGEMENT – `Benches’ Turn into Marketplace for Ideas at IT Cos

As founder of IT firm Mindtree, Ashok Soota proscribed the use of the term `on bench’, preferring to call it `investment time’. He carried this approach to the next company he set up, Happiest Minds, where employees who are not working on a project are either being reskilled, involved in internal projects or are functioning as shadow resources for an existing team.

“There will always be people between projects. It is incumbent on us to use the time to invest in the person and invest in our programmes,“ said Soota, executive chairman of Happiest Minds.


Mindtree, meanwhile, has brought in the concept of an `uberised workforce’, or an internal marketplace where employees can view open projects and apply to work on something outside their vertical.


As manpower costs rise and new project wins slow down, IT companies are increasingly finding it impractical to keep a large number ofpeople idle, or `on bench’.Traditionally used as a pool of employees from which workers could be assigned to new projects, IT companies are now tapping into this resource for internal projects and to generate new ideas.


While the `bench’ size varies from one company to another, the utilisation rate is mostly in the mid-70s, meaning there are at least a few thousand employees who are in-between projects at any given point in time.


Ram C Mohan, head of automation at Mindtree, said, “As the organisational silos grow, you lose visibility of people who may be suitable for a role. This is very effective as employees can pick and choose opportunities, based on what they want. While it is important to optimise costs, as maintaining an extended bench can be financially taxing, it also has a negative effect on people.“


Software services giant Infosys has a `zero bench’ project that allows people in-between projects to work on other assignments, depending on the requirement. Its CEO Vishal Sikka recently likened the Infosys bench to Amazon Web Services and Uber. The company’s HR head, Richard Lobo, said, “Zero bench is a next generation people initiative that aims to maximise the potential of our talent who are in-between projects, i.e. `on bench’. We want to ensure that every employee is actively contri buting towards organisation goals by opening up opportunities for short-duration work assignments. We do this through an open, disintermediated, internal marketplace called “Accelerate“.


This is a gamified platform for people to post modular work based on their project requirements and for anyone on bench in Infosys to signup for the same.“ Over the last two years, over 40,000 work packets were created, and Sikka said 2,000 ideas had already been implemented by the firm.


Similarly, Persistent Systems has done away with the concept of the `bench’ and employees who are not engaged on client projects mandatorily have to undergo training in new tech.


“In 2015, we did away with the concept of the bench -some of our employees are on projects paid for by customers and so aren’t.These people work on short term proof of concepts to solve customer problems or create new things,“ said Mrityunjay Singh, the company’s president. Persistent Systems routinely holds hackathons for this pool of employees toenable them to experiment with new ideas.



Universal Sompo launches new 2-wheeler policy


Private sector non-life insurer Universal Sompo General Insurance today said it has launched its new motor product offering, two wheeler long term package policy for the existing and prospective two wheeler vehicle customers for a comprehensive protection ride up to 2-3 years.


The Two Wheeler Long Term Package Policy will indemnify the insured towards any damages caused by the insured vehicle to a third-party vehicle/property as well as Own Damages incurred to the insured vehicle andrider/owner along with a vehicle theft cover.

The unique selling proposition of the company’s new product is the dual no claim bonus benefit that is being extended to customers at the time of renewing the long term two wheeler policy.

Alternative facts: The alarming trend impacting 85% of hiring managers

Planning on adding staff sometime in the near future? It appears that there’s some new urgency to double- and triple-check those resumes and ask plenty of follow-up questions during the interview process.  Reason: A staggering 85% of employers discovered lies on job applicants’ resumes in the past year, according to a recent 2017 Employment Screening Benchmark Report by HireRight.

That’s  a huge jump from the 66% of employers that said they found lies on resumes just five years ago.

While lying on a resume is nothing new, the steep jump hiring managers uncovering untruths in such a short time frame is certainly disturbing.

3 lies to look for

So what should HR pros do to avoid falling victim to a lying job candidate. As we’ve covered previously, the best defense is being aware of the more common resume lies.

Here are three of the more common resume tweaks, according FakeResume.com, a Web site that advises job seekers on how to bend the truth and get away with it:

  1. Covering up employment gaps

Many candidates are concerned about explaining periods when they were out of work. FakeResume’s recommendation: Pretend you were volunteering.

It’s a lot tougher to verify volunteer work than employment history. But if you’re suspicious, don’t just brush past the issue. Ask probing questions about the work and, if possible, check references at the organization.

Another tactic to cover employment gaps or inflate experience is the so-called “functional resume,” which lists experience and accomplishments grouped by type, followed by a list of previous employers, rather than a chronological list of past positions. Not everyone who uses a functional resume is lying — but it might put you on alert.

  1. Fake references

Most resume lies can be caught by checking references — so candidates who are serious about their dishonesty will provide references that are fake or impossible to check.

FakeResume recommends candidates provide the name and phone number of a fictitious supervisor at a large company. The number actually belongs to a friend who pretends to be an admin and tells the caller the company only provides references via letter. The candidate then mails a fake reference letter.

Candidates also place “typos” in a former employer’s address or phone number, hoping HR won’t bother when they can’t contact the person.

If you’re concerned about the references someone gives, experts recommend finding the company’s Web site and contacting the supervisor through the main phone number.

  1. Phony responsibilities

Most fraudulent resumes don’t contain outright lies. More often, candidates stretch the truth, beefing up previous titles and exaggerating the responsibilities they had in previous positions.

The best way to catch those fibs is to ask detailed questions and not let the candidate off easy if you get vague or suspicious answers. Another tactic: Bring in somebody who’s already doing a job similar to the one the person’s applying for. Dishonest applicants will try to fake their way through an interview using buzzwords and generalities but break down when someone who’s actually experienced in the field asks for details.

“Comparing life insurance with mutual funds is not appropriate”

In a conversation with Babar Zaidi, Anuj Mathur talks about the usefulness of term plans and why sub-5% returns from endowment policies is not such a bad deal.

Some insurance companies have added new features to their term insurance plans. How useful are these variants of term plans?

These new variants have additional features that suffice the need of the buyer in some way or the other. While the buyer has an option to pick from the variants, at all times he can opt for the pure vanilla term plan which is also available.

Some of these variants don’t really offer value to the buyer. For instance, the return of premium plan gives back the entire premium after the policy term. But it also charges a much higher premium.

A term plan is a simple product that provides financial security in case of untimely death. But theIndian consumer (conventionally) has always been looking for a defined benefit from an insurance policy. To satisfy this, insurance companies have come out with plans that return the premium after the policy ends. Having said that, the consumers are also evolving and we see a perceptible change in the way insurance is bought in India. People have begun to understand the value of protection and are hence opting for solutions which meet their needs. Insurance companies also are playing their part in increasing this awareness.

A simple term plan is the best way to insure yourself. So why do companies and agents push endowment plans and other costly policies?

A distributor looks at the needs of the buyer when he offers advice. If pure protection is the objective, then obviously a term plan, whether bought online or offline, is the best solution. But say, if you want to save for your child’s education then a child Ulip is a more suitable product. Similarly, for saving for a long-term goal like retirement, an endowment plan will be a better fit. Hence different needs demand different solutions.

But endowment plans give very low returns of barely 5%. Financial planners say a mutual fund will beable to create more wealth for investors than an endowment policy.

Comparing life insurance with mutual funds is not appropriate. Most people suf fer from a recency bias, hence end up comparing the returns of recent years and don’t take into account the fluctuations of the past. Mutual funds do not offer either guaranteed returns or life cover for that matter, an endowment life insurance policy will offer both.

Besides, a product offering life insurance with a guaranteed return of 5% over 20-25 years is a decent deal.

But there are other investment options, such as EPF, PPF and other small savings schemes that offer assured returns.Won’t they be better options than endowment policies that offer 5%?

Not everybody is covered by the EPF. As for the PPF, it is an administered rate.There is also a `1.5 lakh limit on how much you can invest in a year. PPF rates are fluctuating and have been coming down over the past years (now below 8%). As bond yields come down further, PPF rates will also decline.

Hence in a falling interest rate scenario, it is important to lock your returns over longer periods . One should also not forget that life insurance is the core solution and the debate on returns should be over and above the primary offering.

Another variant of the term plan is the monthly payout plan. However, they offer far less than what a simple FD would fetch. What do you think of this option?

It boils down to the requirement of the family. If the family is not able to deploy the insurance money on its own, a monthly income option is definitely a good idea.The returns may not match those of fixed deposits because these are for the long term (usually 15-20 years). Fixed deposits are for 5-10 years. The company takes the risk of offering long-term returns in a falling interest rate regime. What is the guarantee that the fixed deposit rate will not fall below 6% in the coming years? Moreover, the income from fixed deposits is taxable while monthly income received from an insurance company is tax free. The monthly payout plan hence offers considerable advantage over the conventional fixed deposit.

Mutual fund houses are supposed to declare if senior officials have invested in any scheme of the fund house. Do you think insurance companies should also make such declarations?

How much life insurance one has and the policies held by a person is confidential information. We don’t think such details should be given out in the public domain because it could lead to a moral hazard. It is hence not advisable to tread this path.

Source: Economic Times

Date: 12th June 2017

A 7-Point Survival Guide for those Between Jobs

How do you keep your head when you suddenly find yourself out of a job? It’s a problem an increasing number of people seem to be grappling with of late, as they find themselves victims of layoffs, automation or downsizing. Sreeradha D Basu gets you tips from experts on how to best manage the transition till the next opportunity comes knocking.


Is cost-optimisation by companies the sole reason or would you blame non-performance or redundant skills as well? Even tech disruption is rapidly automating various jobs. At this juncture, all interim jobseekers could immensely help their cause by taking a long hard look at themselves. “Irrespective of the years of experience, every professional should periodically reassess the marketability of their existing skillsets and identify their improvement areas by doing a skill-gap analysis,“ said Rajeev Banduni, CEO, GrowthEnabler.

The most-in-demand skills by the end of this decade, as predicted by the World Economic Forum, are as follows: In 2020: Top 10 Skills Complex problem solving Critical thinking Creativity People management Coordinating with others Emotional intelligence Judgment and decision-making Service orientation Negotiation Cognitive flexibility


With Industry 4.0 knocking at the door, the topmost priority for CEOs is incessant growth despite competition. Thus it is utterly imperative for every professional to acquire new core skills that solve business problems such as increasing customer acquisition or boosting user confidence. “Doing a short certification course (quite a few online are free) or even pursuing a new hobby is a good idea,“ said Kunal Sen, senior vice president, TeamLease Services.


The world judges every book by its cover, and jobseekers are no exception, said Banduni. In today’s neo-digital age, to be sought after by the right people at the right time, it’s mandatory for all jobseekers to ensure online visibility, accuracy and completeness of their professional profile on networking sites such as LinkedIn and AngelList, Sen said.


Branding is a crucial component of orga nisational success and it applies equally to individuals. Do everything it takes to build a positive impression in the mind of potential employers. “This includes updating your resume and updating your social media presence to show off your latest work and skills,“ said Sen.


This is the time to hustle; get out there and talk to as many relevant people as possible, who may well be the ticket to your next job. “Speak with peers or seniors to get leads on job opportunities as well as keep an eye on industry trends,“ said Sen.


With the global startup ecosystem now driving the dynamics of world business, corporate jobs are neither the sole beehive to swarm nor the most happening place to be, said Banduni. “Startups at various maturity stages are always looking for people with corporate experience due to the dearth of qualified talent in novel technologies like data science, robotics, artificial intelligence, machine learning, etc,“ he said. “Discounting the startup employment options due to the risk of business continuity and job stability is not something career experts would recommend.“


Often, situations such as these may trigger some bouts of self-doubt or depression, which may eventually lead to lack of confidence. Lohit Bhatia, business headstaffing at Ikya Human Capital Solutions, said that’s why professionals need to equate the unplanned breaks with those gaps in games wherein the coach makes one sit out a few games only to change the team. During the period, the sportsperson is often asked to work on his or her style, talent or fitness. “Besides upgrading skills, spend some time for fitness, sports, music ­ anything that interests you and allows positive thoughts,“ said Bhatia. “Unplanned breaks could also be used to provide time for self and family, which often takes a backseat in busy careers. Use the downtime to get closer to them.“

No matter how severe the situation might seem today, with the support of family and friends you will spring back to life and work sooner than you realise, he said.

Source : The Economic Times

Date : 09-06-2017