ASSIGNMENT- 03

Demonetisation

UBE ASSIGNMENT
NAME: SNEHIL. S.PERIWAL
ROLL NO :103
FMB26-B

We are into Textile Fabric and Weaving Of Sarees

Business and also into Jobwork Business in
Textiles
 Q.1 What is the stated objective of demonetisation ?
Demonetisation was reported on November 8 , 2016 with the
accompanying goals :
• To Battle against defilement, counterfeit notes, dark cash and
psychological warfare subsidized by fake notes.
• The Higher Division Notes of Rs 500/ - and Rs 1000/ - were simpler to
store and convey than littler section notes or different stores of
significant worth, for example, gold, thusly PM's arrangement of
lessening the extent of HDN's in a money subordinate economy, for
example, India's could diminish the money accessible for defilement
purposes and decrease the measure of dark cash.
• Demonetisation was finished with the goal of flagging a routine
change concentrating on the administration's assurance to rebuff
the unlawful exercises and the related riches.
Q.2 What was the extent of black money in India ?
• "Black Cash" alluded to cash earned through either lawful or
illicit exercises, on which assessment had not been paid.
• As on February 2012, information from Focal Agency of
Examination uncovers that Indians held "$500 Billion of illicit assets"
in remote duty safe houses.
• Many studies including those from McKinsey and Organization
and the Bank of America Merrill Lynch evaluated the portion of dark
economy in India to be approximately a "fourth of India's Gross
domestic product".
• A significant measure of dark cash was held as "land and gold
and in outside records abroad"
Q.3 Identify two effects of demonetisation on Indian Economy ?
ANS:
• Impact on Dark Cash

o Only a little part of dark cash is put away as money.

o Usually dark cash is kept as physical resources like

gold, land and structures, and so on.

o Hence the measure of dark cash countered by

demonetization rely on the measure of dark cash held as
money and it will be littler than anticipated.

o But more than all else, demonetisation has a major

promulgation impact. Individuals are presently much
persuaded about the need to battle dark salary, such an
across the nation mindfulness and urge will urge
government to turn out with even solid measures.

• Impact on Bank store and loan costs

o Deposit in the present moment may rise, yet in the

long haul, its impact will descend. The investment funds
with the banks are really fluid money individuals put
away.

o It is hard to expect that such prepared money once

put away in their grasp will be put into investment funds
for a long haul. They set aside this cash into banks just to
change over the old notes into new notes.
 o These are not willful reserve funds intended to get
intrigue. It will be changed over into dynamic liquidity by
the savers when undeniable new cash supply happen.

o This implies that new reserve funds with banks is

just transient or momentary store. It might be encashed
by the savers at the suitable time. It isn't important that
demonetisation will create huge investment funds in the
financial framework in the medium term.

o Most of the reserve funds are acquired by big deal

open part banks like the SBI.

o They may decrease financing cost in the

short/medium term. Be that as it may, they can't tail it in
the long haul.
Q.4 What has been the impact of demonetisation for your industry ?
ANS:
• I am from the Textile Material business.
• We essentially exchange Extravagant Saree and Creator Textures.
• We are into assembling and Manufacturing of Saree and Saree Fabrics
also we are in Jobwork and process dying .
• Demonetisation was a financial change which the material business was
influenced in all respects adeversely.
• Since the material business is a disorderly industry it works significantly
on money and numerous individuals had immense measures of dark cash.
• Demonetisation resembled a Torrent who swiped individuals who were
working significantly on dark cash.
• However, numerous individuals were such who were are as yet alive and
doing great business who whose records didn't have the dark cash
content in it.
• Overall , the material business endured because of extreme reliance on
dark cash yet the couple of players who didn't have dark cash simply
confronted a liquidity smash for couple of days and they were back to
typical.

Q.5 What is the impact of GST on your business ? Discuss with your
mentor and write the impact in
a) First 3 Months
b) After 2 Years
ANS:
 GST is a Roundabout Expense which has supplanted numerous
Backhanded Assessments in India. The Products and
Administration Expense Act was passed in the Parliament on
29th Walk 2017.

 The Act became effective on first July 2017; Merchandise and

Administrations Expense Law in India is an extensive, multi-
organize, goal put together duty that is demanded with respect
to each esteem expansion.

 In straightforward words, Merchandise and Administration

Expense (GST) is a circuitous duty exacted on the supply of
products and enterprises. This law has supplanted numerous
aberrant duty laws that recently existed in India.

 GST is one circuitous duty for the whole nation.

a) Initial 3 Months
 Once GST was propelled some essential issues were
confronted:
 The bookkeeping programming was not prepared to agree to
all the new guidelines which made a few issues.
 Knowledge about documenting of GST return was an issue as
the records staff was OK with Tank and Administration
Assessment and didn't have appropriate information
concerning what should be done in GST.
 The CA in CA Firms additionally were in the learning stage the
same number of changes were presented in the GST law so it
was brief time stage where the CA's utilized to think about the
law comprehend the advantages and disadvantages and at
exactly that point they were in a situation to support their
customers (we) which made a postponement in many
bookkeeping related fields.

b) Following 2 Years

 After 2 Years many beginning issues which we confronted

began to disappear away and the framework began to stream
line :

 From 2018 onwards GST demonstrated extremely supportive to

us.
 It demonstrated to be much simple and a superior law than the
past Tank and Administration Assessment.
 Procedures turned out to be simple.
 It was anything but difficult to check different gatherings status
as to they have recorded their GST Profits for time or no.
 Claiming information duty credit (ITC) is a lot simpler as now we
need to pay GST independent of we purchase merchandise or
administrations however in the old framework we used to pay
Tank on buy of products and Administration Assessment on
taking a few administrations where ITC was accessible subject
to specific standards and guidelines much confounded than
GST.
 Being ready to guarantee higher measure of ITC liquidity
position improved.