Union Minister for Finance & Corporate Affairs Nirmala Sitharaman chaired the pre-budget consultation meetings for held in virtual mode from December 14- December 23.
More than 170 invitees representing 9 stakeholder groups participated in 15 meetings scheduled during this period.
The stakeholder groups included financial and capital markets, health, education, rural development, water and sanitation, trade union and labour organization; industry services & trade, infrastructure, energy and climate change; agriculture and agro-Processing; among other industrialists and economists.
Union MoS for Finance & Corporate Affairs Anurag Singh Thakur, Finance Secretary AB Pandey, DIPAM Secretary Tuhin Kanta Pandey, DEA Secretary Tarun Bajaj, Chief Economic Advisor Krishnamurthy Subramanian and senior officers from Ministry of Finance and other ministries also participated in the meeting.
The stakeholder groups made several suggestions on various subjects that included fiscal policy, including taxation, bond markets, insurance, infrastructure spending, health and education budget, social protection, skilling, water harvesting and conservation, sanitation, MGNREGA, public distribution system, ease of doing business, Production Linked Investment scheme, exports, branding of ‘Made in India’ products, Public Sector Delivery Mechanisms; Innovation, Green Growth; Non-Polluting sources of Energy and Vehicles, among others.
The participants lauded the government’s efforts to flatten the COVID-19 curve and a strong recovery in economic growth in the second quarter of 2020-21. They further stated that India is among very few countries whose economic activity has risen with declining pandemic induced fatalities.
Finance Minister Sitharaman last week said the forthcoming Budget for the financial year 2021-22 (FY22) will be like no other in the past and will help India emerge as the engine for global growth. She added that the government is seeking growth-inducing big ideas and inputs derived from introspection by industry, which would be used for formulating the 'budget.
The Union Budget for FY22 is set to be presented in Parliament on February 1, 2021.
Source: ET Now Digital
If officials of Ministry of Textile are to be believed, the long-awaited National Textile Policy will focus on domestic industry in addition to promoting cultivation and processing and branding of organic cotton.
It will promote and set up hubs to manufacture machinery with the help of foreign direct investment (FDI).
The draft of the policy is likely to be floated for public feedback soon.
As India imports around 75 per cent of textile machinery, the push will be to change that and manufacture the machinery in India.
As per media reports, the idea is to increase the domestic production of several components in the sector to make India a global textile player. It is in alignment with the vision of Atmanirbhar Bharat.
The policy will also focus on setting up seven mega textile hubs across the country where everything from the production of raw materials to export of finished products would take place.
A mega textile park spread over 1,000 hectares of land will boost the growth of integrated textiles.
At the same time, the proposed policy also seeks to boost handcart and handloom sectors,
Source: Apparel Online
Businesses with monthly turnover of over Rs 50 lakh will have to mandatorily pay at least 1 per cent of their GST liability in cash, the finance ministry said as it moved to curb evasion by fake invoicing.
The Central Board of Indirect Taxes and Customs (CBIC) has notified certain changes to the Goods and Services Tax (GST) Rules, bringing in stringent conditions for getting GST registration as well as for businesses to settle tax liability using input tax credit.
The CBIC has introduced Rule 86B in GST Rules, to be applicable from January 1, 2021, which restricts use of input tax credit for discharging GST liability to 99 per cent.
"... The registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of 99 per cent of tax liability, in cases where the value of taxable supply ... in a month exceeds Rs 50 lakh," the CBIC said.
However, this restriction will not apply where the managing director or any partner has paid more than Rs 1 lakh as income tax or the registered person has received a refund amount of more than Rs 1 lakh in the preceding financial year on account of unutilised input tax credit.
Further, the CBIC has amended GST rules restricting filing of outward supply details in GSTR-1 for business that have not paid tax for the past periods by filing GSTR 3B.
So far, non-filing of GSTR 3B resulted in blockage of e-way bill but will now result in GSTR 1 blockage as well. "In order to curb the GST fake invoice frauds, the Govt on the recommendations of the GST Council's Law Committee has issued a notification to deal with the menace of fraudsters who avail & pass on ineligible ITC by fake or fly-by-night firms," Finance Minister Nirmala Sitharaman tweeted.
The CBIC said it has booked about 12,000 cases of input tax credit (ITC) fraud and arrested 365 persons in such cases so far. During the last six weeks alone, more than 165 fraudsters have been arrested.
"There have been some misinformation on the recent rule changes on the social media causing confusion among the genuine taxpayers," the CBIC said while issuing a "myth v/s fact" list for the notification.
With regard to concerns over registration cancellation, the CBIC said, "The GST laws passed by the Parliament and state legislatures provide that GST registration is liable to be cancelled for those who have not filed 6 or more returns. It is, therefore, wrong to say that the cancellation will be done without reasons."
It further said that only in fraudulent cases where there are significant discrepancies based on data analytics and sound risk parameters, and not mere clerical errors, the action of suspension and cancellation will be taken up.
"Precise targeting of fraudsters is being done only in specific cases, after doing a comprehensive analysis, using advanced data analytics tools etc. Further, multiple risk indicators are checked and only then few high-risk entities are selected," the CBIC said.
AMRG & Associates Senior Partner Rajat Mohan said, "These changes indicate that government is grappling with lower tax collections and high tax evasions, burden of which will again be on honest taxpayers."
EY Tax Partner Abhishek Jain said the government has put restrictions on seamless input credit utilisation with introduction of Rule 89B, which blocks utilisation of ITC beyond 99 per cent of the output liability, for businesses having taxable turnover of more than Rs 50 lakh per month.
"With the government providing reasonable exceptions to this rule, the idea remains to prevent misutilisation of credit by businesses taking fake credits," Jain added.
With regard to blocking of GSTR-1 filing, Jain said "the government's idea here seems to be to curb input tax credit passing by businesses which have otherwise not paid their GST liability."
The CBIC has also notified authentication of Aadhaar number or physical verification of business premises for the purposes of obtaining GST registration, a move aimed at checking fraudulent registrations just for the purpose of passing on ITC.
Also, the validity of electronic way bill provisions has been amended by the CBIC according to which the e-way bill will be valid for one day for every 200 km of travel, as against 100 km earlier.
Source: The Economic Times
The Reserve Bank of India (RBI) on Wednesday cautioned the general public against unauthorised lending platforms and mobile apps.
In an official release, RBI said that there have been reports about people falling prey to digital lending scam in order to get quick and hassle free loans.
"Members of public are hereby cautioned not to fall prey to such unscrupulous activities and verify the antecedents of the company/ firm offering loans online or through mobile apps," the RBI said.
These platforms charge excessive rates of interest and additional hidden charges, adopt unacceptable and high-handed recovery methods and misuse agreements to access data on mobile phones of borrowers.
Further, the central bank urged consumers not to share copies of KYC documents with unidentified persons and unverified apps. It also asked people to report such apps or bank account information associated with the apps to concerned law enforcement agencies or use Sachet portal to file an on-line complaint.
The RBI notification came hours after reports that 19 people were arrested from Hyderabad and Gurgaon in connection with nation-wide money lending app scam. The tap-and-get-a-loan “solution” has pushed a large number of people into a trap far deeper than the financial condition they are in.
People looking for instant loans first download an aggregator app, which directs them to apps that process the loan request after collecting Aadhar, PAN details and a selfie of the applicant. They also ask for access to the users’ photo gallery and phone contact list. While the loan is sanctioned immediately, the applicant gets seven days to repay. It is when the loan is not repaid that the problems begin.
The Reserve Bank said that legitimate public lending activities can be undertaken by banks and non-banking financial companies (NBFCs) registered with RBI and other entities who are regulated by the state governments under statutory provisions. It has also mandated that digital lending platforms which are used on behalf of banks and NBFC should disclose name of the bank/NBFC upfront to the customers..
Source: The Times of India
Independent candidates have emerged as key players in the maiden District Development Council (DDC) elections in Jammu and Kashmir, winning 50 of the 280 seats.
They finished third after the BJP and National Conference in the overall DDC poll results announced this evening. They got more votes than the Congress and PDP. The BJP got 4.87 lakh votes, NC 2.82 lakh, Independents 1.71 lakh, Congress 1.39 lakh and the PDP 57,000.
Although the People’s Alliance for Gupkar Declaration (PAGD) secured a clear majority to form DDCs in Kupwara, Budgam, Ganderbal, Kulgam, Pulwama and Anantnag, Independents will play a key role in the power equation in Srinagar where they have bagged seven seats followed by the J&K Apni Party (3) and the NC, PDP and BJP (1 each).
In Jammu region, the BJP is comfortably placed in Kathua, Samba, Udhampur, Jammu, Doda and Reasi districts, but the Independents will matter in Poonch where they have won eight seats.
The PAGD has an edge in Baramulla, Shopian, Bandipora, but here again Independents will determine which way the council formation goes.
Initial signals suggest that the Independents could back the JKAP in the Valley and BJP in Jammu. Union Minister Anurag Thakur hailed the performance of Independents, saying the combined vote share of the BJP and Independents in the UT was over 52 per cent and “this is the rejection of the PAGD agenda against abrogation of Article 370”.
In Anantnag, Independent Peer Shahbaz Ahmad defeated Naseer Ahmad Mir, son of J&K Congress president Ghulam Ahmad Mir. Shahbaz was a Congress rebel.
The Gupkar alliance, BJP and JKAP are all wooing Independents to form DDCs in areas where they are short of majority. Ali Mohammad Sagar, general secretary, National Conference, said he was confident that the PAGD would form DDCs in all 10 Kashmir districts and three-four in Jammu where it had done well in Chenab region of Ramban, Kishtwar and won 35 seats in all in the Jammu region.
Independent observers, however, said the PAGD was at a disadvantage in Srinagar and would find the going tough in Bandipora, Baramulla and Shopian where Independents would play a role.
Source: The Free Press Journal
Sanitaryware makers to manufacturers of consumer durables remain optimistic about an economic revival in 2021 but cautious as the risk of COVID-19 pandemic still exists, officials said on Wednesday. Many companies across sectors are looking to make their balance sheets strong after they have experienced market disruptions in the current calendar year due to the raging global coronavirus outbreak, they said.
Firms ranging from tourism, food and beverage sectors to sanitaryware industry are focusing on the health and hygiene segment and strengthen their digital presence to overcome the challenges, the officials said, adding that the economic revival is expected in the second half of the next year, they said.
"Despite the major blow in the economy in 2020 due to the pandemic, 2021 seems to be the year of redemption and we can expect the economy to not only recover but also to show significant signs of growth," Roca Bathroom India managing director KE Ranganathan said. ..
Revenue from some of its brands has reached 90-100 per cent of the pre-COVID levels, while sales from the touchless and hygiene products have gained momentum and the company has also forayed into the safe-essentials segment, he said.
Jaquar Group director and promoter Rajesh Mehra said reduced home loan rates and attractive payment schemes will boost the pent up demand in the market for home-building related segments in 2021.
He, however, said markets will only be able to rec over in the second half of 2021.
The COVID-19 pandemic has changed the scope and range of home appliances and help the sector evolve from conventional to smart products, consumer durable goods maker Panasonic said.
"We continue to stay invested, as we look for green shoots to serve our customers. We have introduced Miraie, which is powered by the internet of things and artificial intelligence. It is our connected living platform that has been developed in-house for our appliances.
"A connected ecosystem is e xpected to gain focus as we step into the new year," Panasonic India and South Asia president and CEO Manish Sharma said.
McDonald's operator in north and east CPRL head Robert Hunghanfoo said consumer sentiments have remained good during the festive season, while avoiding large gatherings and contactless experience have become a norm.
"Customers are exploring options that reassure safety or are ordering online. We will continue to focus on implementing measures that will help them when it comes to dining-in, take-away or ordering McDelivery," he said while talking about the business prospect in 2021.
For the travel and tourism industry, the current year began on an ominous note and the lockdown brought all kinds of mobility to a standstill.
"The biggest insight was that passengers today are not just looking for timely and convenient travel experience but have started giving significant weightage to hygiene, sanitisation, and social distancing. .. Travel gradually gaining momentum and will grow in 2021," IntrCity RailYatri CEO and co-founder Manish Rathi said.
Source: The Economic Times
Indian Minister of Railways, Commerce & Industry, Piyush Goyal has assured Bangladesh, complete cooperation from India in ensuring barrier-free trade between the two countries.
Addressing a digital conference, the Minister said, “We share a very strong relationship in the Railways sector which is our bridge to greater engagement in infrastructure development. The Government of both our countries have set very high benchmarks on how Bangladesh & India together can capture a larger share of the global market in textiles. Through this, we can provide jobs to people, increase earnings from trade and support economic development.”
The statement becomes important as in recent days there were reports that businesses in Bangladesh’s port city of Chittagong have reportedly called upon India to cut non-tariff barriers while demanding enhancement of the port infrastructure of both countries to facilitate movement of goods.
Prior to that, the Indian authority issued a notification termed Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 in August.
And it was being said that this rule is going to hurt Bangladesh’s exports to India and undermine the efforts to narrow large trade imbalance between the two neighbours, according to two Government agencies.
The Minister also added that India and Bangladesh share a very warm and cordial relationship, based on mutual trust as well as friendship, which goes beyond the arithmetic of economic gains or losses.
Source: Apparel Online
Britain's transport minister said he had ordered flights and arrivals from South Africa to be halted after a potentially more infectious variant of the novel coronavirus that causes COVID-19 had spread to Britain.
"I’ve taken the decision to temporarily stop flights and arrivals entering England from South Africa from 9 am tomorrow following an outbreak of a new strain of coronavirus," Transport Secretary Grant Shapps said.
Source: The Tribune
Britain and the European Union were on the cusp of striking a narrow trade deal on Thursday, swerving away from a chaotic finale to the Brexit split that has dealt a blow to the 70-year attempt to forge European unity from the ruins of World War Two.
While a last-minute deal would avoid the most acrimonious ending to the Brexit divorce, the United Kingdom is heading for a much more distant relationship with its biggest trade partner than almost anyone expected at the time of the 2016 Brexit vote.
Sources in London and Brussels said a deal was close as British Prime Minister Boris Johnson held a late-night conference call with his Cabinet of senior ministers, and negotiators in Brussels pored over reams of legal trade texts.
“Work will continue throughout the night,” said European Commission President Ursula von der Leyen’s spokesman, Eric Mamer.
“Grabbing some sleep is recommended to all Brexit-watchers at this point. It will hopefully be an early start tomorrow morning,” Mamer said.
There was no official confirmation of a deal but a news conference was expected in London on Thursday morning - just seven days before the UK turns its back on the EU’s single market and customs union at 2300 GMT on Dec. 31.
The United Kingdom formally left the EU on Jan. 31 but has since been in a transition period under which rules on trade, travel and business remained unchanged. But from the end of this year, it will be treated by Brussels as a third country.
If they have struck a zero-tariff and zero-quota deal, it would safeguard nearly $1 trillion in annual trade, and support the peace in Northern Ireland - a priority for U.S. President-elect Joe Biden, who had warned Johnson that he must uphold the 1998 Good Friday peace agreement.
Even with an accord, some disruption is certain from Jan. 1 when Britain ends its often fraught 48-year relationship with a Franco-German-led project that sought to bind the ruined nations of post-World War Two Europe together as a global power.
After months of talks that were at times derailed by both COVID-19 and Brexit fireworks from London and Paris, leaders across the EU’s 27 member states have cast an agreement as a way to avoid the nightmare of a “no-deal” exit.
But Europe’s second-largest economy will exit both the EU’s Single Market, which former British Prime Minister Margaret Thatcher helped create, and its Customs Union.
BREXIT
When the UK shocked the world by voting to leave the EU, many in Europe hoped that it could stay closely aligned. But that was not to be.
Johnson, the face of the 2016 Brexit campaign, made clear that since 52% had voted to “take back control” from the EU, he was not interested in accepting the rules of either the Single Market or the Customs Union.
The EU did not want to allow a freewheeling, deregulated British economy that might encourage others to leave.
The result was a tortuous negotiation on a level playing field in competition - which the EU demanded for access to its market. At one point, EU chief negotiator Michel Barnier even posted a picture of himself in London staring at a playing field.
If there is to be a deal, it covers goods but not the financial services that make London the only financial capital to rival New York. Services make up 80% of the British economy.
Goods trade will have more rules, more red tape and more cost. There will be some disruption at ports. Everything from food safety regulation and exporting rules to product certification will change.
In essence, what they have agreed is a narrow free trade deal surrounded by other agreements on fisheries, law enforcement cooperation, transport and energy.
The UK, which imports about $107 billion more a year from the EU than it exports there, bickered until the end over fish - important for Britain’s small fishing fleet but worth less than 0.1% of GDP.
EU market admittance for London-based banks, insurers and asset managers is being handled outside the deal and from Jan. 1, access will be patchy at best.
Source: Reuters India
India has challenged in Singapore an international arbitration court's verdict against it over a $2 billion tax claim involving Vodafone Group Plc , a senior government official told Reuters on Thursday on condition of anonymity.
Vodafone in September had won the case against India, ending one of the most high-profile disputes in the country that had caused concern among investors over retrospective tax claims on companies.
An international arbitration tribunal in The Hague had ruled that India's imposition of a tax liability on Vodafone was in a breach of an investment treaty agreement between India and the Netherlands. India had 90 days to appeal the ruling.
India's finance ministry did not immediately reply to an email and message seeking comment on the story.
India lost another international arbitration case this week, against Cairn Energy, over a tax dispute. It has been ordered to pay the UK-listed company over $1.2 billion in damages and costs.
India is expected to challenge this ruling too given the size of the award, said the senior government official, who did not want to be named as the decision was not public yet.
India has faced a string of arbitrations by investors including Deutsche Telekom, Nissan Motor Co, Vodafone and Cairn Energy over issues ranging from retrospective taxation to payment disputes.
Source: The Economic Times
Sterling rose around 1% on Wednesday and British government bond yields posted their biggest one-day rise in more than a month on signs that Britain and the European Union were on the brink of clinching a deal to govern trade ties.
A deal is imminent and could be agreed as early as Wednesday evening, a senior EU diplomat told Reuters.
Earlier, EU member states began to prepare procedures to put in place a new trade deal with Britain from Jan. 1, sources in the bloc said, indicating a deal was imminent.
There was no confirmation from Britain, however, and sterling eased off session highs after reports that some government officials remained cautious.
“The market is anticipating that a deal will be agreed in the next day or two,” said MUG strategist Lee Hardman, adding sterling could strengthen to $1.36/$1.37
He said, however, traders would be keen to see details of any agreement, given expectations that any initial deal will be a bare bones one with specifics to be thrashed out in 2021.
“The best case scenario for the pound would be if we also see details released form the EU and UK side of things alongside the deal to try and reduce the initial disruption when we shift to a new trading arrangement.”
The pound which had earlier snapped a three-day losing streak on the lifting of a French border blockage, extended gains to $1.3569, up more than 1.3% on the day. It traded around $1.3505 by 1630 GMT.
Against the euro, the pound was 0.8% at 90.28 pence , having earlier risen to 90.05 pence.
Gilt yields rose, with 10-year yields up 12 basis points to 0.30%.
The UK yield curve was set for its biggest one-day rise since early-November as a Brexit deal would likely make it unnecessary for the Bank of England to cut rates into negative territory.
Source: Reuters India
