Gold to be taxed at 3 percent, beedis at 28 percent

Jun 4, 2017 0

New Delhi– The GST Council on Saturday completed the work of bringing all items under a 4-slab tax structure with gold attracting 3 per cent rate, ending suspense on the item dear to Indians, even as all states barring West Bengal agreed on the rollout of the new indirect tax regime on July 1. Industry said that traders need to gear up for the transition as more delay was unlikely.

“Gold currently has an excise of 1 per cent and state charge around 1 per cent VAT… keeping these various taxes in mind, and after a lot of debate in the GST Council, we have finally reached a consensus on 3 per cent for gold and gold jewellery,” Union Finance Minister Arun Jaitley, who heads the Council, told reporters here after its 15th meeting.

Besides, rough diamonds will have a nominal tax of 0.25 per cent in order “to keep the audit trail” of transactions, he said.

While beedi leaf, or “tendu” will be taxed at 18 per cent, beedis will be levied tax at 28 per cent, he said, adding they, unlike cigarettes, which not attract cess over and above these taxes.

Footwear costing below Rs 500 will be taxed at 5 per cent, while those costing more will attract 18 per cent.

Regarding items of use by the common man, Jaitley said that even manufactured apparel costing less than Rs 1,000 would be taxed at 5 per cent.

Revealing that textiles was a major topic of discussion as it is a mass consumption item, he said that while cotton and all other natural fibres are in the 5 per cent bracket, “man-made” fibre will attract a levy of 18 per cent.

All yarn will be taxed at 5 per cent but man-made fibres at 18 per cent.

“Fabric of all categories will have 5 per cent tax, while for ‘made-up apparel’ it will be 12 per cent,” Jaitley said.

“Packaged food items sold under registered trade marks, which are sold at a much higher price (than food) would carry a rate of 5 per cent,” he said, adding biscuits, both of cheap and expensive varieties, would be taxed at 18 per cent.

The GST Council had convened here for its 15th meeting to finalise the rate fitment of the remaining six items, including gold as 1,211 other items had been decided at its previous meeting in Srinagar last month.

Jaitley also said that in view of the many representations received on the fitments, the committee of officials would take up these cases.

These, as well as other pending matters, would be discussed at the next meeting of the GST Council that has been scheduled to be held here on June 11, he added.

The GST Network (GSTN) made a detailed presentation at Saturday’s meeting on their IT preparedness for implementation.

“Members questioned the GSTN extensively on their level of preparations and the GSTN expressed confidence it is fully ready for the work assigned to it,” Jaitley said.

However, West Bengal Finance Minister Amit Mitra, who had earlier this week voiced serious doubts about the preparedness of the industry for GST by July 1, continued to be doubtful about the GSTN’s readiness.

“Entire GST will depend on one IT system of GSTN. The presentation given by them clearly shows that they are not ready and need more time. They have appointed 34 Suvidha providers for the whole country.. will that be sufficient?

“We are not opposing GST. We support it. But the July 1 deadline should be extended. There should be more meetings, discussions,” he told reporters.

Queried about Mitra’s position, Jaitley said that “the others did not share that view”.

Rajeev Dimri, Leader, Indirect Tax, BMR and Associates LLP, said that with the decision to implement GST from July 1, the “onus now lies on the industry to prepare” as “adequate information is now available in the public domain vis-a-vis return formats and rules, thus it is critical for the industry to gear up their IT systems for meeting reporting requirements..”

Confederation of All India Traders Secretary General Praveen Khandelwal said that “much preparedness is required at the level of traders”. “Obviously many challenges will occur which needs to be sorted out and as such trial period is required,” he said.

Welcoming the 3 per cent tax rate on gold, World Gold Council’s Managing Director, India, Somasundaram P.R. termed it an “encouraging step in the current context to stabilise the industry and address the concerns of the millions employed in the industry”.

The Cotton Textiles Export Promotion Council (TEXPROCIL) Chairman Ujwal Lahoti said that the 5 per cent was is very progressive and will lead to the growth and development of the entire value chain.

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Construction, transport, retail may create most jobs: Assocham

Jun 4, 2017 0

New Delhi– Amid the controversy on jobless growth in India, industry chamber Assocham on Sunday cited its report holding that sectors like real estate, retail, wellness and transport and logistics may create most jobs in the near future.

The Associated Chambers of Commerce and Industry of India (Assocham)-Thought Arbitrage Research Institute joint report also said India’s information technology and IT-enabled services (ITeS) sector may add at best one million jobs in the next five years.

“The IT and ITeS (sector), which is under pressure at present, in any case, was to expand at a lesser pace in job creation. On the employment base of 3.3 million in 2013, the much-touted sector had an incremental human resource requirement of 2.2 million by 2022, of which about one million have been added in the last 3-4 years,” it said.

“Thus, as a country which requires at least 15-20 million jobs a year, we need to look quite broader and at those areas which expand not only in the export market but also within the country,” Assocham Secretary General D.S Rawat said in a statement.

According to the report, building, construction and real estate, including infrastructure, sector would require 31.1 million incremental jobs.

“The sector has been the worst-hit because of multiple factors including high level debts and non-performing assets, delays in delivery of housing projects, and environmental and regulatory hurdles. We need to get these issues out of the way in a manner that it becomes a robust engine of job creation and economic growth,” Rawat said.

Besides, organised retail can create incremental level of at least 10-12 million new jobs in the next five years, while textiles and clothing can also be a potential area of job creation, the report added.

The central government think-tank the Niti Aayog on Friday trashed unemployment surveys as unreliable and said it has set up a task force to produce authoritative annual nationwide employment data based on household surveys.

“We don’t have an existing survey from which we can get the numbers (of unemployed). In the process, the debate on jobs has happened in a vacuum,” Niti Aayog Vice Chairman Arvind Panagariya told reporters, while referring to surveys done by the Labour Bureau in 2015 which showed that only 135,000 jobs were added by certain sectors that year.

“There is serious problem with these surveys in eight sectors of the economy, where the total workforce covered is three crore, out of a countrywide workforce of around 47 crore,” he said.

“Even these three crore come from 11 states. It is a non-random survey sample from which you’re trying to arrive at the population numbers, which you cannot. One can’t extrapolate from the sample to the population,” he added. (IANS)

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Tech Mahindra leads as global engineering R&D services provider

Jun 4, 2017 0

Bengaluru, June 4 (IANS) Software major Tech Mahindra has been recognised as a global engineering and R&D services provider based on the comprehensive assessment of its ‘Design to Build Engineering’ capabilities by management consulting firm Zinnov, the company said on Sunday.

The study titled ‘Zinnov Zones – Product Engineering Services (PES) 2016’ placed Tech Mahindra Integrated Engineering Solutions (IES) in the ‘Leadership Zone’ in seven industries — such as aerospace, automotive, telecom, industrial, energy and utilities, transportation, and consumer electronics — and ‘Expansive and Established’ zone for two horizontals — Mechanical Engineering Services and Embedded Systems.

“We are delighted to be recognised as a leader among global engineering players. The ratings are testimony of our ability to integrate design, styling, new age customer experience through design thinking approach and help transform our customers as a product engineering partner,” said Karthikeyan Natarajan, Global Head (Engineering, IoT and Enterprise Mobility), Tech Mahindra.

The rating validates Tech Mahindra’s capabilities across parameters including breadth and depth of services — non-linear offerings, innovation, talent, delivery excellence, customer connect, strategic partnerships, infrastructure and new engagement/business models.

For the study, Zinnov selected top 50 R&D Product Engineering service providers from an initial list of 200+ service providers across geographies like India, China, Russia, Eastern Europe & APAC. (IANS)

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Ministry will process Niti Aayog report on Air India sale: Jaitley

Jun 1, 2017 0

New Delhi–The Niti Aayog has given its recommendations on the government disinvesting stake in Air India to the Civil Aviation Ministry, which will take a decision on the matter, Finance Minister Arun Jaitley said on Thursday.

“The Niti Aayog has given its recommendations to the Civil Aviation Ministry, which will decide on the process of disinvestment in Air India,” Jaitley said in response to a query on the issue at a briefing here on the three years of the NDA government.

According to sources here, the Niti Aayog in a recent report has recommended strategic disinvestment from the loss-making Air India, by which government control would be transferred to a private owner.

Air India officials said the national carrier has an accumulated debt of around Rs 60,000 crore, which includes around Rs 21,000 crore of aircraft-related loans and around Rs 8,000 crore working capital. (IANS)

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India’s manufacturing sector expansion eases in May

Jun 1, 2017 0

Mumbai– India’s manufacturing sector output slowed down last month due to a softer expansion in new orders and production, a key macro-economic data showed on Thursday.

The Nikkei India Manufacturing Purchasing Managers’ Index (PMI), which is a composite indicator of manufacturing performance stood at 51.6 from the index reading of 52.5 reported in April 2017.

An index reading of above 50 indicates an overall increase in economic activity, and below 50 an overall decrease.

“The upturn in the Indian manufacturing sector took a step back in May, with softer demand causing lower expansions in output and the amount of new work received by firms. Moreover, there was a renewed decline in new export orders,” said Pollyanna De Lima, economist at IHS Markit and the author of the report.

“Echoing a more positive tone, the PMI dataset highlighted a stronger increase in businesses’ input purchasing, while optimism reached a six-month peak. Additionally, cost inflationary pressures cooled.”

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71 percent Indian small and mid-size businesses optimistic about domestic economic growth in 2017: Survey

Jun 1, 2017 0

New Delhi– Around 71 per cent of the small and medium-sized enterprises (SMEs) in India are more optimistic about domestic economic growth over the next 12 months compared to their Asian counterparts, a survey said here on Thursday.

According to the survey commissioned by American Express and carried out by Oxford Economics, Indian SMEs are confident about their business performance in 2017 and 76 per cent of those surveyed expect revenue growth of at least four per cent during the year.

In terms of optimism on the domestic economy, India was followed by Japan at 62 per cent, China at 54 per cent, and Singapore at 26 per cent.

The survey — American Express Global SME Pulse 2017 — was carried out among senior executives and decision-makers across 15 countries with the purpose of understanding the priorities and aspirations of the SME community. The companies surveyed form part of India’s mid-market organisations having revenues of up to $90 million, including SMEs.

The survey revealed that the confidence of Asian countries is substantially higher than the global average of 45 per cent.

“In terms of global economic outlook, SMEs in India have higher optimism at 65 per cent than Asian counterparts with Japan at 58 per cent, China at 47 per cent and Singapore at 20 per cent,” the survey said.

“In terms of profitability, Indian SMEs are similarly upbeat with 45 per cent forecasting a profit of eight per cent per annum by 2020. This is in excess of the global findings which show 27 per cent of SMEs forecasting net profits of eight per cent over the same period,” it added.

The survey said Indian SMEs cited domestic policies and uncertain laws and regulations as major concerns over the next year.

“With a conducive policy framework and positive regulatory steps taken by the government, the SME sector has seen substantial growth. This survey clearly highlights the optimism and confidence among SMEs, and businesses are deftly navigating through challenges to thrive in India,” said Saru Kaushal, Vice President and General Manager, Global Corporate Payments, at American Express India.

“With SMEs focusing on expansion and investing in latest technologies, they need to manage their expenses effectively. Financial discipline can help companies tackle slower business growth even in a slackened economic environment,” Kaushal added.

Other findings of the survey included 69 per cent of the SMEs noticing lower barriers to entry and better business opportunities on government’s recent initiatives and support to boost the sector.

Over the next year, Indian SMEs plan to source funds through public equity markets (at 50 per cent) and bank loans (at 46 per cent), the survey said.

Besides, 38 per cent of Indian SMEs feel that expansion into new domestic market segments will be a top priority for their business over the next three years, while almost 32 per cent said they recognise expansion into new international markets as a pathway to improved financial performance over the same period.

“According to the research, the majority of Indian SMEs understand the growing importance of technology and want to make investments in the same. 77 per cent of Indian SMEs felt the importance of applying the latest technology in their businesses over the next three years,” it added. (IANS)

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Ford India sold 23,503 units in May

Jun 1, 2017 0

New Delhi–Car maker Ford India Pvt Ltd on Thursday said it closed last month with a total sales of 23,503 units.

In a statement issued here, Ford India said it continued its growth trajectory in May 2017 selling 23,503 units (domestic 6,742 units, exports 16,,761 units) as against 17,279 units (domestic 5,780 units, exports 11,499 units) sold during May 2016.

“Amidst uncertainties caused in the wake of the final notification on GST (Goods and Services Tax), Ford has continued to grow faster than the industry,” it quoted Anurag Mehrotra, Ford India’s newly appointed Managing Director as saying.

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Strategic Partnership will push defence manufacturing, FDI inflow: Jaitley

Jun 1, 2017 0

New Delhi–The government is focused on expanding defence manufacturing in the country and the new Strategic Partnership model will supplement the opening of foreign investment in the defence industry, Defence Minister Arun Jaitley said on Thursday.

Asked if liberalising the policy on Foreign Direct Investment (FDI) in defence has shown any results, the Minister said opening foreign investment, which was done in phases ultimately allowing for 100 percent FDI in case of access to ‘modern technology’, was only meant to open the doors.

“FDI change merely opens the door. They are enabling… They themselves do not ensure that immediately entry of participants will take place,” Jaitley said.

“The reason is very simple… There is only one purchaser (of defence equipment) within India, that is the Government of India. Unless opening of FDI is accompanied by some reasonable possibility of a possible investor getting orders, he is not going to set up an establishment,” he said.

The Minister said the government is laying “big emphasis” on expanding defence manufacturing within the country.

“There is a big emphasis on expanding defence manufacturing within the country.”

He said the government is looking at a “balance” between the Defence Public Sector Units, and bringing private sector in defence manufacturing “so that all national resources” is committed to it and “its potential can be unleashed”.

He said the Strategic Partnership policy has been brought for this and it will help in bringing foreign companies either through FDI route or through technology transfer.

“That is why Strategic Partnership policy has been brought in, because it is going to supplement the FDI policy, whether the SP partner comes through the FDI route or just a tech tie-up, they would be free (to choose),” the Minister said.

The Strategic Partnership policy envisages the establishment of long-term strategic partnerships with qualified Indian industry majors, wherein the Indian industry partners would tie up with global original equipment manufacturers, to seek technology transfer and manufacturing know-how to set up domestic manufacturing infrastructure and supply chains in defence manufacturing.

It was finalised by the Defence Acquisition Council on May 20, and the Union Cabinet took note of it on May 24. The final policy was uploaded by the Defence Ministry as the seventh and final chapter of the new Defence Procurement Procedure (DPP) on Wednesday.

Jaitley also said the Defence Ministry has cleared procurement proposals at an “unprecedented” rate in the last three years, and alleged there was “inaction” during the term of the previous UPA government.

“The manner in which proposals cleared by the Defence Acquisition Council (DAC) over the last three years is unprecedented, when you compare it with the inaction during the previous ten years,” Jaitley added. (IANS)

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Treat illicit trade as national threat, Ficci urges government

Jun 1, 2017 0

New Delhi–The Federation of Indian Chambers of Commerce and Industry (Ficci) on Thursday urged the government to tackle smuggling and counterfeiting of goods as national threat, as they result in India losing around Rs 39,239 crore in taxes every year.

In a letter to various ministries concerned, including Finance Ministry, Ficci’s Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (Cascade) said the top five goods where seizures by the Directorate of Revenue Intelligence (DRI) had been the highest in the past few years have been gold, cigarettes, machinery parts, fabric/silk yarn and electronic items.

The Ficci had earlier revealed facts about and impact of illicit trade in its report “Invisible Enemy – A Threat to Our National Interests”.

In the letter, the premier business chamber also shared the outcome of a recent interactive session held on “Illicit Trade and Its Impact on Consumers, Industry and Economy”, where it was felt that stringent action needs to be taken to counter and bring down illicit trade in the top smuggled sectors of the country.

“The existence and operation of illicit trade, counterfeiting and smuggling has been an enduring problem that has escalated in scope and magnitude, impacting industries, government, economies, and the health and safety of the consumers,” read the letter.

“India today has the potential to become a global manufacturing hub. However, widespread smuggling and counterfeiting, in the absence of an adequate enforcement mechanism to stop it, can act as a dampener in achieving this goal.

“It is time that we call for stern and resolute counter strike force against such ill-intentioned activities,” said Ficci Secretary General A. Didar Singh.

As per the Ficci Cascade report, owing to the illicit trade, various Indian industries are losing Rs 1,05,381 crore annually.

“Amongst the various sectors, the maximum revenue loss to the exchequer on account of counterfeiting and illicit trade is attributed to tobacco products, estimating a revenue loss of Rs 9,139 crore, followed by mobile phones at Rs 6,705 crore and alcoholic beverages at Rs 6,309 crore,” said the report. (IANS)

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India to start FTA negotiations with Eurasia soon, says DIPP

Jun 1, 2017 0

St. Petersburg, Russia– India and the Eurasian Economic Union (EAEU) will soon start negotiations for a free trade agreement (FTA), Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek said on Thursday.

“India’s trade with the EAEU region is barely $8.4 billion and this is well below potential. It is for this reason that India and the EAEU had decided to set up a Joint Feasibility Study Group on the India-EAEU FTA at St. Petersburg International Economic Forum (SPIEF) in 2015.

“This report has since been finalised and accepted by India and individual EAEU countries, following which negotiations on the FTA are to be launched,” Abhishek said here.

He was speaking at a session on “Eurasian Economic Union (EAEU)-India: A Strategic Partnership”, being organised as a part of the SPIEF.

Abhishek stated there was a need to promote connectivity between India and the EAEU region and that the International North South Transport Corridor would be extremely critical for this purpose.

The DIPP Secretary also highlighted the role being played by the “Green Corridor” in promoting trade facilitation between India and Russia. He felt that this Corridor could be extended to the other EAEU countries in due course.

Speaking at the session, Veronika Nikishina, Minister for Trade, Eurasian Economic Commission, stated that the EAEU had so far concluded only one FTA with Vietnam and India would be the second. (IANS)

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