Synopsis In an instruction to all Principal Commissioners of Central Tax formations, the CBIC said there is a need to focus on timely disposal of all pending GST refund claims in order to provide immediate relief to business entities, especially MSMEs, in the difficult times of second wave of the COVID-19 pandemic. The Central Board of Indirect Taxes and Customs (CBIC) has launched a special drive to clear all pending GST refunds by month-end. The 15-day Goods and Services Tax (GST) refund drive is on the lines of an ongoing similar drive organised by the CBIC for refund of customs and duty drawback claims. In an instruction to all Principal Commissioners of Central Tax formations, the CBIC said there is a need to focus on timely disposal of all pending GST refund claims in order to provide immediate relief to business entities, especially MSMEs, in the difficult times of second wave of the COVID-19 pandemic. "It is hereby instructed that a 'Special GST Refund Disposal Drive' will be launched by all Central Tax formations during the period from 15th May 2021 to 31st May 2021 for processing and disposal of all pending GST refund claims on priority," it said. The CBIC further said that the GST law provides 15 days for issuing acknowledgment or deciency memo and total 60 days for disposing of refund claims without any liability to pay interest. "It is, however, expected that all Central Tax formations will take up all the pending GST refund claims for processing on priority and endeavour to dispose them of much earlier than the statutory time limits, preferably before a period of 30 days from the date of receipt of the refund application," the CBIC added. It is expected that during this special drive, all GST refund claims, pending as on May 14, shall be disposed of by May 31, 2021.
Source: Economic Times
COVID-19 and subsequent restrictions on business activities imposed by several states, economic recovery is beginning to lose steam and the country's GDP growth is likely to be below nine per cent for the current fiscal, according to a survey. At least 80 per cent of the respondents expect consumer demand for non-essential items as well as investment to be severely impacted due to the current COVID situation, the survey conducted by Care Ratings said. "The economic recovery is beginning to lose steam with infection rates scaling record highs. Almost seven out of 10 respondents expect GDP (growth) to be below nine per cent for FY22," it said. According to the study, the majority of respondents expect the lockdown announced by several states will stay till May-end. Altogether, 54 per cent of the people, who participated in the survey, believe that the lockdown is a solution to the current COVID-19 situation in the country, it said. Little more than three-fourth of the respondents feel that the current lockdown is not as stringent as the restrictions imposed last year, it added. Another rating agency CRISIL said India's GDP growth is likely to drop to 9.8 per cent in a moderate scenario, assuming the second wave of coronavirus disease peaks by May- end. The economic growth may slip further to 8.2 per cent in the severe situation when the second wave of the pandemic peaks by June-end, it added.
Source: Business Standard
New Delhi: The GST Council will meet for the first time this year on May 28, through video conferencing. The meeting coming in the backdrop of the fresh and more deadly Covid wave sweeping the country is expected to announce a few Covid relief measures particularly on compliance matters. It may also announce a few measures to correct the inverted duty while discuss the compensation cess dues arising in 2021-22 due to a possible shortfall in cess collections. Two other important items including lowering of GST rates for two wheelers and bringing natural gas into the indirect tax fold may also be included in the agenda for discussion. "Smt @nsitharaman will chair the 43rd GST Council meeting via video conferencing at 11 AM in New Delhi on 28th May 2021. The meeting will be attended by MOS Shri @ianuragthakur besides Finance Ministers of States & UTs and Senior officers from Union Government & States," the office of the finance minister said in a tweet. The GST Council has not met since October last year when the panel of finance ministers discussed GST compensation and the borrowing formula offered by the Centre towards compensating states for GST shortfall. The 43rd meeting of the council is expected to again discuss the compensation issue for the current year but sources said it may also take a few steps to correct inverted duty structure without pursuing any increase in GST rates or move towards converging GST to a three rate structure. Sources said that the council may at the next meeting also take up two other important items including lowering of GST rates for two wheelers and bringing natural gas into the indirect tax fold. A top source in the finance ministry said that inverted duty correction, GST cut on two wheelers and inclusion of natural gas into GST fold are on the agenda and hopefully the council will offer some solution that is in the best interest of all stakeholders. Correction of inverted duty structure, especially in sectors such as fertilizer, steel utensils, solar modules, tractors, tyres, electrical transformers, pharma, textile, fabric, railway locomotives among other goods is required. Inverted duty refers to tax rates on inputs being higher than those levied on finished products. This results in higher input credit claims by goods besides several administrative and compliance issues. Currently, while duty on imported tyres is 10 per cent its inputs ie rubber attracts 20 per cent duty. Similarly, solar modules do not attract any duty while its components attract 5-10 per cent duty. Similarly, the council may also consider lowering of GST rate of 28 per cent on two wheelers to give a boost to its sales affected during the pandemic. With a pickup in rural demand, as seen with increased tractor sales, any cut in rates would help the two wheeler makers to increase sales with competitive pricing. The Council has in principle agreed to include five petroleum products under GST but has so far deferred its actual inclusion into the indirect as states fear big loss of revenue. But now, the government is considering bringing natural gas under the Goods and Services Tax (GST) regime to begin with as it would be difficult to bring the entire oil and gas sector immediately under it.Sources said that natural gas may be included under a three-tier GST structure where rates would vary depending on the usage. So, while piped natural gas (PNG) for homes may be kept at a lower rate of 5 per cent, commercial piped gas may attract the median 18 per cent GST rate and automobile fuel CNG may be kept in the highest bracket of 28 per cent.
Source: Sify.com
Textiles and paper maker Trident Ltd is planning to raise up to Rs 1,100 crore from the market by issuing NCDs and equity shares in tranches. The company's board on Saturday approved raising up to Rs 600 crore by issuing Non-Convertible Debentures (NCDs) and up to Rs 500 crore through equity shares, Trident said in a regulatory filing. The board also recommended the fund raising resolution to be approved by the shareholders in the next meeting, it added. Besides, it okayed the appointment of Naveet Jindal as CEO for Paper, Chemicals and Energy Business of the company and Swapan Nath as CEO for Budhni Location. Trident also informed BSE that its board has approved change in designation of Rajiv Dewan to act as Chairman of the board of the company with an immediate effect. Its board also approved the resignation of Pallavi Shroff as director of the company with immediate effect and the appointment of Usha Sangwan as additional director. On raising of funds, Trident said the board had cleared the resolution for raising of funds for an amount not exceeding Rs 600 crore by issue of NCDs by way of public or private offering, in one or more tranches. It also approved the resolution for raising of funds for an amount not exceeding Rs 500 crore by issue of equity shares, non- convertible debt instruments along with warrants, convertible debt instruments or by way of a public or private offering, including QIP.
Source: Money Control
BEIJING -- China's textile industry saw steady expansion in the first three months of the year, data from the Ministry of Industry and Information Technology (MIIT) showed. The added value of textile firms with annual operating revenue of at least 20 million yuan (about 3.09 million U.S. dollars) rose by 20.3 percent year on year, according to the MIIT. The firms raked in 43.4 billion yuan worth of profits, surging by 93 percent from the same period last year. Their combined operating revenue expanded by 26.9 percent year on year to about 1.05 trillion yuan.China's online retail sales of clothing products registered a year-on-year growth of 39.6 percent between January and March. Garment exports totaled 33.3 billion dollars during the period, up by 47.7 percent year on year.
Source: Big News
All Pakistan Textile Mills Association's Patron-in-Chief wrote to the government saying that sustainable export-led growth is dependant on the continuation of the RCET policy. The Patron-in-Chief All Pakistan Textile Mills Association (APTMA) Mr. Gohar Ejaz has requested the government for continuation of Regionally Competitive Tariffs of $ 6.5 / Metric Million British Thermal Unit (MMBtu) of Gas/RLNG and 7.5 cents / kWh of Electricity. On our request Imran Khan’s government reposed its confidence in the Textile Industry, providing the government’s complete support. As a result, Pakistan’s Textile Exports foresees to increase considerably i.e., $16.5 Billion during FY21 in comparison to the exports in FY18 which were $13.5 billion and will continue to grow up to $20Bn in June 2022. Making a total of $27 billion in exports in June 2021 and $30 billion in June 2022. Regionally Competitive Energy Tariffs policy proposed by the Pakistan Institute of Development Economics (PIDE) has played a vital role in the current year’s exports and is critical to sustaining enhanced exports, employment, and brings in new investment.
The importance of RCET
The textile industry has capitalized on the given incentives to help the government achieve the ultimate aim of export maximization, job creation, and the realization of economic prosperity. Pakistan’s export industries (including textiles) witnessed an exceptional growth of 9% in 9 months of Fiscal Year 2021. The increase in export demonstrates the competitiveness of Pakistan’s exports, when inputs are provided at regionally competitive prices, exports were achieved despite an unfavourable international environment. The industrial electricity tariff of other textile exporting countries is much lower than Pakistan making us uncompetitive in the increasing market competition. The objective of the Pakistani textile industry to become an export “powerhouse” cannot be achieved until power tariffs are revised to a competitive and stable level. Industry fears that the Power Sector will not be able to deliver on a sustained stable and competitive basis which will negatively impact market sentiments. Competition is the key principle for the development and expansion of the industrial market.
Source: Global Village
ISLAMABAD: The China Pakistan Economic Corridor (CPEC) is gaining momentum with every passing day of Pak-China relationship, because of which the project would continue with more strength in days ahead. With the smooth sailing of CPEC project, Pakistan is foreseeing massive economic activity during days ahead. An appreciable outcome of a novel Belt and Road Initiative (BRI) of the Chinese government, Pakistan becomes the key player in the regional economic activity. Commenting on the 70th anniversary of Pakistan-China diplomatic relations, a CPEC Authority official told APP that one key outcome of the CPEC is the construction of Special Economic Zones (SEZs) under construction across the country through the joint venture. Keeping in view the importance of the project, number of other countries had also been showing interest off and on, to invest in the project. The economic activity in the country is gaining momentum after the commencement of second phase of CPEC that largely consists of industrial cooperation. Although the SEZs planned under the umbrella of CPEC are basically meant to relocate Chinese industry and investment but both the countries have already offered third party participation in the mega project. He said in the next phase, four important sectors, including industry, agriculture, socio-economic development and Gwadar New City would progress at fast pace. The official said nine out of 22 energy projects had been completed, while five mega electricity projects in Thar, Kohala, Azad Pattan and others were in the pipeline. After completion of all the projects, Pakistan would not only become self-sufficient in the energy with addition of 17,000 MW electricity to the national grid, but would also be able to export it. Chinese Ambassador to Pakistan Nong Rong, in a recent statement, had also expressed satisfaction over the progress of CPEC projects, the official said. He said at present, work on four SEZs was underway. Some 2,000 local and foreign investors had expressed intent to invest in the Rashakai SEZ. The Rashakai Zone, the official said, would spread over 1,000 acres of land. The Federal Government had decided to develop it into three phases. About 247 acres of land would be developed in the first phase, 355 acres in the second phase and 399 acres in the last phase. Similarly, 210 MW electricity would be provided to the zone in three phases whereas the government had also allocated Rs 1.203 billion for provision of gas, the official said. He said over 400 industrial units, including garments and textile, domestic goods, electronics, electricity accessories, pharmaceuticals and others would be set up in the zone. Similarly, the official said the Allama Iqbal Zone Faisalabad was being completed on priority, which would create around 250,000 jobs for the locals. He said the Gwadar Port had now become operational. The Eastbay Expressway, linking Gwadar to Makran Coastal Highway, had been completed. The official said under the CPEC, some 1,100 kilometre roads had been completed while 850 kilometres were under construction. On the Western route, he said Hakla-Dera Ismail Khan Motorway was in the final stages. Its total length was 285 kms, which had been divided in five packages. “The first 55 kms package would be completed on priority, which started from Yarik near D. I. Khan and ended at Rehmani Khel,” he added.
Source: Profit Pakistan
Policy is way beyond tweets and textile; it needs to be proactive, participative
ISLAMABAD: There is little clarity on the long-term objectives, strategy and related policy actions as to what exactly Pakistan wants to achieve through international trade. While one of the most favourite cliches of politicians is that “we want trade not aid”, one may rightfully ask, trade of what, to where and how much? Imagine for a minute that all global markets are open for Pakistani exports, what can we export, to where and how much is the supply capacity? Did we not witness the recent episode of choking textile industry, due to shortage of raw material and labour, during a temporary spike in orders as a result of lockdown in other competing markets? Even if there is abundant raw material, cotton and labour, how much is the installed capacity in the textile sector? Why can we not think about the sectors that do not need the same level of subsidies and protection, and has much better growth potential, for example the services and agro-food sectors? Why can we not find new markets? Why do we not adopt a result-oriented commercial diplomacy approach? And by the way, who is running the show of trade diplomacy, the Ministry of Foreign Affairs or the Ministry of Commerce? Yet another institutional battle! On commercial diplomacy in particular, a new batch of commercial counsellors has been due for many months for selection, but nothing is being done on that account. Existing commercial counsellors, who are due to return, are in packing mode, thus not focused on actual tasks. One wonders what is going on and is it not one of the most important tasks in the Ministry of Commerce. The pursuit for diversification, both in export products and markets, is also a favourite cliché of trade policy managers, but not substantiated by policies and actions on ground. Recently, a good initiative namely “Look Africa” was announced, but I am still looking around to find something serious and practical about this. May I say that we are late, as usual, in reaching the African market as well. They are more focused on operationalising and benefiting from the African Continental Free Trade Agreement than welcoming Pakistani exports, if and when that happens. Apart from frequent tweets on selective statistical variations in export figures, that too mostly on textile and comparing with the corresponding months of 2020 when there was very little international trade activity and drop in exports due to lockdown, it is hard to find a serious trade strategy or policy action in Pakistan. At this point in time, one may sum up the whole trade policy paradigm in three Ts - “tweets”, “textile” and “temporary (measures and export spikes)”. This needs to be converted into three Ps, “participative (going beyond textile)”, “productivity-driven” and “progressive”. It’s been in the air for long that the Ministry of Commerce is working on the Strategic Trade Policy Framework (STPF), but nothing came out in the last three years as the latest STPF document is for 2015-18. Interestingly, the 2015-18 STPF may disturb a reader who would be looking for realistic and practical policy and targets. It is also one of the archaic bureaucratic styles to write unrealistically ambitious targets and plans, as no one bothers to question that post-facto. The Import Policy Order and the Export Policy Order of 2020 are relatively new ones, in addition to the National Tariff Policy of 2019-2024, however, this does not replace the need for a strategic trade policy with clear vision, annual action plans and targets.Interestingly, the draft Trade Related Investment Policy Framework (TRIPF) has been in circulation since 2018; better not to speculate the reason for inactivity on this. It is worth noting that over the last few years, Pakistan has not concluded any bilateral trade agreements, despite the fact that due to a stalemate at the WTO and slowing trade globalisation, countries are focusing more on finding regional and bilateral markets. Ignoring this fact is beyond even a reactive approach, let alone the proactive approach that is required for a good trade policy management. We had the biggest regional trade agreement, RCEP, in our neighbourhood, but we didn’t bother to attempt an entry into that. We could have started negotiations with the United Kingdom to clinch a good deal after Brexit, but we didn’t. And now Pakistan may be facing a problem in extension of the GSP Plus status, due to a resolution in the EU parliament, and it would be real news to hear if any serious economic diplomacy is started to mitigate this situation. Trade policy is way beyond tweets and textile, it needs to be proactive, participative and progressive. Being proactive and reliable is the only option if a country wishes to sustain and gain in international markets. It is time to get serious.
Source: Tribune
