Fewer GST slabs possible in the future, says CEA

Government could merge the 12% and 18% rates and slabs may be simplified to reduce the tax burden, says Arvind Subramanian.

Hyderabad : The Finance Ministry’s Chief Economic Advisor (CEA), Arvind Subramanian, on Friday, said the union government may rationalise the goods and services tax (GST) rates  going forward by merging the 12% and 18% slabs.

“Over a time the 12% and 18% rates can probably be collapsed into one rate. So over a time we will see fewer rates,” Subramanian said delivering a lecture at the ICFAI University in the southern city.

At present, there are five tax slabs under goods and services tax– 0%, 5%, 12%, 18% and 28%. Going forward, the number of items under the highest tax slab may also be reduced by keeping only luxury items and sin goods under 28%, he said. “As we get comfortable with revenues, I think we will be looking at further simplification over the next few months,” he said.

The GST Council had earlier this month rationalised GST rate structure by bringing 178 items to the 18% tax bracket from the 28% bracket.

Subramanian, however ruled out moving to a single goods and services tax rate. “We will not ever have one rate because that is too difficult to achieve,” he said.

He had earlier suggested moving to a three slab goods and services tax structure — a poor man’s rate combining 0% and 5%, a core rate combining 12% and 18% and a demerit rate of 28%. Referring to the initial glitches during the implementation of the new indirect tax regime, Subramanian said the system may take six to nine months to streamline, reports Cogencis. The government has welcomed feedback on the GST. Earlier in the month, a six-member advisory panel formed by the union government, and mandated to simplifying and rationalising the goods and services tax, had received over 700 representations on problems faced by industry over return filing, the e-way bill, input tax credit, and exports, according to media reports.

Speaking at the ICFAI event in Hyderabad, Subramanian said the goods and services tax was the most transformational fiscal reform ever implemented in the subcontinent and its core aim was to progressively move towards the white economy from the black economy.

Prime Minister Narendra Modi’s government introduced the goods and services tax, which has subsumed most indirect taxes at the central and state level, on Jul 1, 2017. The GST is a destination-based taxation system.

Rlys tender for 7,000 km track electrification by Mar

New Delhi : The Indian Railways (IR) is looking to float tenders for electrification of 7,000-km of track by March 2018 under the engineering, procurement and construction (EPC) mode, a source told Cogencis.

The national carrier will conduct pre-bid meetings, which for the first time may include foreign companies, the source added.

“Tenders will be of suitable size considering issues like geographical proximity and to achieve the economies of scale,” the source said. The budgetary allocation for the plan is 34.56 billion rupees.

Railway Minister Piyush Goyal had earlier indicated that the network may offer large size tenders in place of the 30-40 km route size it traditionally offers.  He was in favour of offering each tender for 500 km and above to save on costs. “With electrification, seamless traction will be possible and the cost of fuel will reduce substantially,” the source said. Indian Railway aims to complete the electrification of the country’s busiest rail route in the next 36-42 months and of the entire network by 2021, Railway Board member Ghan Shyam Singh had said on October 27. State-owned Indian Railways, under the Ministry of Railways, at present has 30,000 km of electrified track, which accounts for 45% of its overall network, the fourth-largest in the world.

Alibaba’ Singles Day fest fetches $12bn in two hours

Shanghai: Chinese e-commerce giant Alibaba on Saturday announced the sale of about $12 billion worth goods within two hours of launch of its 11.11 Global Shopping Festival. “Nearly $11.9 billion worth of total Gross Merchandise Volume (GMV) (sales in dollar value of goods sold over a certain period) was generated within the first two hours of the shopping festival,” Alibaba Group Holdings Limited said in a statement here.

The ninth edition of the much-anticipated 24-hour annual shopping festival began at midnight here on a gala note. Held on China’s Singles’ Day, the event is one of the largest online shopping festivals in the world. Nearly 325,000 orders were processed per second by Alibaba Cloud (the cloud computing arm of Alibaba) within the first hour of the shopping extravaganza, the company said.

“Nearly 256,000 payment transactions per second were processed by Alipay (Alibaba’s online payment platform) within the first hour,” it added. More than 60 leading international brands like Apple, Nike, Samsung, Zara, Gap among others sold over $15 million worth goods each within the first hour of the fest.

The festival will have promotions and offers from over 140,000 brands and 15 million product listings this year. Started in 2009, the festival grossed about $18 billion during the 24-hour period in 2016, making the festival about 2.5 times bigger than Black Friday and Cyber Monday (two of the biggest shopping festivals in the US) put together.

The event aims to raise awareness on the value of online shopping among merchants and consumers. For this year’s festival, Alibaba has deployed a “new retail” strategy to bring together the online and offline shopping experiences.

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The company has converted about 100,000 retail stores to “smart stores”, which will allow consumers to receive customised shopping experience with the use of facial recognition, “cloud shelf” and location-based store and discount recommendations. Alibaba has also introduced Hema Stores, wherein consumers can walk in to the offline store and scan each of the products present in the store through their mobile phones to know more information about it.

Logistics network Cainiao is expected to employ over three million logistics personnel to deliver over one billion packages brought during the shopping fest. Alibaba’s logistics partners would also launch chartered flight delivery services from over 10 countries in North America, Europe and Asia to expand the company’s global reach.

Trade ministers agree Asia-Pacific trade pact without US

Danang: Trade ministers from 11 Asia-Pacific countries agreed today to press ahead with a major trade deal without the United States, as the world’s largest economy seeks to go it alone under President Donald Trump’s ‘America First’ policy. Trump pulled his country from the Trans-Pacific partnership (TPP) at the start of the year, dismaying allies and casting into doubt an agreement heralded for tying lowertariffs to strong environmental and labour protections.

In a joint statement this morning, the remainingcountries — dubbed the TPP-11 — said they had “agreed on thecore elements” of a deal at the sidelines of the APEC summitin the Vietnamese city of Danang, after days of stalled talksraised fears it could collapse altogether. Francois-Philippe Champagne, Canada’s trade minister ,described the breakthrough in a tweet as “big progress”. Canada had held out to maintain environmental and labourprotections linked to freer markets in the deal.

Those elements were thrown into jeopardy by America’ssudden withdrawal from the deal earlier this year, whichforced the remaining countries to reconsider the merits of apact suddenly shorn of access to the world’s largest economy. Canada had dug in over those progressive clauses. Butthey are much less attractive to countries like Vietnam ,Malaysia, Chile and Peru now that the carrot of access to thehuge US market has been pulled. Trump’s election has upended years of American-led movesto open up global trade. The US president is among leaders attending the APECsummit in Danang and yesterday he ladled out more of histrademark ‘America First’ rhetoric.

In a strident address he said his country will “no longertolerate” unfair trade, closed markets and intellectualproperty theft. “We are not going to let the United States be takenadvantage of any more,” he added, taking a swipe atmultilateral trade deals. Shortly after, China’s leader Xi Jinping offered astarkly different vision, casting his country as the newglobal leader for free trade. Beijing is not included in the TPP, a deal initiallydriven through by the former US administration as acounterweight to surging Chinese power in Asia.

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China has since sought to fill the free trade gap left bythe United States, even if much of its own market remainsprotected. Japan, the world’s third largest economy, has beenparticularly active in pushing for a swift consensus on TPP, fearful that delays could lead to the collapse of the pactafter years of negotiations and hand more regional influenceto China. Today, Trump and Xi will join leaders from across theAsia-Pacific region for closed door summit talks, includingRussia’s Vladimir Putin, Japan’s Shinzo Abe and Canada’s Justin Trudeau.

The original TPP deal was once described by the US as a”gold standard” for all free trade agreements because it wentfar beyond just cutting tariffs. It included removing a slew of non-tariff restrictionsand required members to comply with a high level of regulatorystandards in areas like labour law, environmental protection, intellectual property and government procurement. Without the US, TPP-11 only represents 13.5 percent ofthe global economy but the remaining countries are scramblingto avoid the deal’s collapse, especially given theincreasingly protectionist winds sweeping through the United States and Europe.

Car sales down 5.32%; passenger vehicles dip marginally in October

New Delhi: Domestic passenger vehicle sales declined marginally to 2,79,837 units in October from 2,80,677units in the same month last year. Car sales were down 5.32 percent to 1,84,666 units last month as against 1,95,036 units in October last year, according to the data released by the Society of Indian Automobile Manufacturers (SIAM) today.

Motorcycle sales last month declined by 3.50 percent to11,04,498 units compared to 11,44,512 units in October 2016. Total two-wheeler sales in October were also lower by2.76 percent to 17,50,966 units compared to 18,00,668 units in the year-ago month. Sales of commercial vehicles, however, rose by 6.44 percent to 69,793 units in October, the SIAM said. Vehicle sales across categories registered a decline of1.79 percent to 21,62,164 units, from 22,01,489 units in October 2016, it added.

Linking Aadhaar with insurance policies mandatory: Irdai

New Delhi, Regulator Irdai today said linkage of the unique identity number Aadhaar with insurance policies is mandatory and asked insurers to comply with the statutory norms. “The Authority clarifies that, linkage of Aadhaar number to Insurance Policies is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017,” the Insurance Regulatory and Development Authority (Irdai) said.

The government in June had notified the Prevention of Money Laundering (Maintenance of Records) Second Amendment Rules, 2017 making Aaadhar and PAN/Form 60 mandatory for
availing financial services including insurance and also for linking the existing policies with the same.

In a communication to all life and general insurance companies, Irdai said the rules have “statutory force” and as such they have to implement them without awaiting further

Commenting on the communication, MD and CEO of ICICI Lombard Bhargav Dasgupta said it is a progressive and logical step towards creating a unified platform for financial services and at the same time promote the government’s digitisation agenda.

“While there may be some short term challenges to overcome, we see significant long term benefits in terms of preventing frauds and streamlining the KYC process,” he said. There are 24 life insurance companies and 33 general insurers (including standalone health insurers) operating in the country.

ASSOCHAM solicits relief for exporters under GST

New Delhi: In lieu of the 23rd meeting of the Goods and Services Council in Guwahati starting Thursday, the ASSOCHAM recommended examining the impact of the taxation scheme on exports in a bid to help exporters receive their tax refunds without any further delay.

Further, the chamber also urged easing rules for the GST administration on exports to maintain the growth momentum. ASSOCHAM listed several issues such as refund of GST paid on capital goods,  export obligations, transfer of drawback  scrips  and early clearances of their dues on account of tax refunds for resolution by the GST Council and the Finance Ministry.

“The growth in exports has picked up, providing momentum which must be maintained by making our goods competitive. We should fully tap the uptick in the global economy to our advantage. It is pertinent to ensure that our exporters remain fully funded and do not face any working capital shortage,” it said.

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As per section 16 of the IGST Act, the exporters have an option not to pay any IGST on the exports and claim refund of the GST paid on procurement of inputs and input services. However, no refund is available for GST paid on the capital goods per section 54(8) (a) of the CGST Act.  Since, in case of exporters, there is no output GST liability, this results in blockage of credit of GST paid on capital goods, impacting the financial health of the exporters.

Also in the GST regime, for non-fulfilment of export obligation on imports made during pre-GST regime, while the importer is required to repay the customs duty saved, including CVD and SAD component, its credit is not available in absence of enabling provisions under GST law. This results in such CVD and SAD component becoming a cost to such exporters in GST regime.

In the pre-GST regime, scrips under the Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) were allowed to be used to pay excise duty/service tax on the procurements. However, similar facility is not available under GST law, and the MIES and SEIS scrips can be used only for making payment of the basic customs duty. Due to such restriction, the exporters are not able to fully derive the benefits under these schemes and this impacts their financial health, the chamber noted.

It also said significant amount of refunds pertaining to pre-GST period have not yet to be granted to the assesses. The refunds are stuck either due to delay in processing of the refunds or in the litigations relating to eligibility/procedural aspects for refund claim. This has caused significant amount of funds blockage for the exporters, the chamber opined.

On a related note, the two-day meeting of the GST Council is scheduled to begin today. While today’s meeting is among the officials, Friday’s session will be chaired by Finance Minister Arun Jaitley. Reports suggest that the council is likely to take up the issue of benami properties and inclusion of real estate under the GST ambit during the meeting. The council is also expected to review some items under the 28 percent tax slab, along with a review of slashing tax rates on restaurants and proposals on extended liberalisation of SMEs.

Godrej Agrovet makes impressive market debut, shares jump 37%

MUMBAI ;In rather good news for the business industry amidst the gloom of demonetisation and GST, Agribusiness company Godrej Agrovet, a subsidiary of Godrej Industries, made an impressive market debut on stock exchanges today. Godrej Agrovet shares jumped as much as 37 per cent to Rs. 630 on the National Stock Exchange (NSE) against the issue price of Rs. 460. With a 37 per cent gain on the listing day, Godrej Agrovet joins the league of successful IPOs in 2017 which include Prataap Snacks, Capacit’e Infraprojects, Dixon Technologies, CDSL, Hudco, Avenue Supermarts and Shankara Building Product.

The trend for the Godrej Agrovet as the initial public offer (IPO) of Godrej Agrovet, which ended on October 6, was subscribed over 95 times with strong demand coming from qualified institutional investors (QIB) and non-institutional investors. The non-institutional investors’ segment was subscribed 236 times while the segment reserved for QIBs saw subscription of nearly 151 times, reported NDTV.

Godrej Agrovet, in such a short period of time, has already made huge strides and raised Rs. 292 crore of fresh equity capital through this issue, which it wants to use for repayment of working capital loans and commercial papers.

Incorporated in the year 1991, Godrej Agrovet is a diversified, R&D focused, agribusiness player with operations spread across five business verticals – animal feed, crop protection, oil palm, dairy and poultry and processed foods. It is also the largest crude palm producer in India and 4th largest animal feed producer in Bangladesh through its 50:50 joint venture ACI Godrej.

The impressive returns have seen Godrej Agrovet reporting a net profit of Rs. 274 crore on revenues of Rs. 4,911 crore in FY2017. Its revenue and net profit grew at a CAGR of 15.5 per cent and 27 per cent respectively over last 5 years. The company has consistently reported more than 30 per cent return on equity between FY14-16. In FY17 the company reported a ROE of 27 per cent.

Aditya Birla SUN Life AMC launches new fund scheme

Mumbai, Aditya Birla Sun Life AMC Ltd has launched a new fund scheme which will invest mainly in equity and equity-related securities. The Aditya Birla Sun Life Resurgent India Fund – Series 5, a close-ended equity scheme with tenure of 3.5 years, opened for subscription on September 20 and closes on October 4, the company said in a statement.

The fund aims to generate capital appreciation by investing primarily in equity and equity-related securities, that are likely to benefit from recovery in the Indian economy, it said. The scheme will allocate around 80-100 per cent of assets in equity and equity related securities(including options premium), and 0-20 per cent in money market and debt instruments, the statement said.

Aditya Birla Sun Life AMC Ltd CEO A Balasubramanian said, “We believe that a confluence of multiple factors – administrative and economic reforms, new initiatives and plans by the government and favourable macro environment, makes equities especially attractive over the next 3-5 years.”

The scheme looks to provide investors an opportunity to benefit from companies which stand to appreciate in the long run, and gain from the turnaround in the Indian economy over the 3.5-year horizon, Balasubramanian said.

Reserve Bank of India likely to introduce Rs 200 notes from September

The Reserve Bank of India will issue Rs 200 denomination currency notes from probably last week of August or first week of September. According to reports, The central bank this time will make it sure that the black marketing of Rs 200 notes does not take place. RBI has indicated that to start with the total of new Rs 200 notes would by around Rs 50 crore.

However, according to sources, there is no other denomination available between Rs 100 and Rs 500 and RBI is expecting Rs 200 notes to become very popular and that’s why it is taking every step to ensure availability of it. Meanwhile, in case of Rs 2,000 notes that were issued in the aftermath of demonetisation effected on November 8 last year, the RBI had received complaints of hoarding and widespread illegal trade from various quarters. The recent revelation from the RBI comes close on the heels of the central bank making it public that it will soon issue new Rs 50 denomination notes.

RBI shifts focus to Rs 200 notes, stops printing of Rs 2000 notes
Chief Economist at State Bank of India Soumya Kanti Ghosh pointed out in an interview to a leading newspaper that the new notes will ease the ‘operational difficulties’ faced by the common man.

The ‘abrupt’ recall of Old High Denomination (OHD) currency notes sucked out over Rs 16 lakh crore worth of currency notes in circulation, thus triggering a panic scenario among the populace. A day after, it caused a huge rush to the banks and cash machine booths, a ‘grim’ situation that lasted for over two-and-a-half months.

The fresh supply of new Rs 200 currency notes worth Rs 50 crore will give a further push to the government’s efforts toward remonetisation that aims to ensure ample amount of cash in the banking system. It will also increase the share of smaller denomination currency notes in circulation, as, after the Specified Bank Notes, were banned, the government had introduced only higher denomination notes of Rs 2,000 and Rs 500 value. The move to introduce the Rs 200 notes is expected to lessen the problem of unaccounted, untaxed-for cash in the Indian economy.

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