The Central Board of Indirect Taxes and Customs (CBIC) has brought job work under the ambit of import of goods at concessional rate of duty or IGCR rules, allowing importers who rely on contract manufacturers to pay duty at concessional rates on goods imported for domestic production of goods or providing services. “The absence of this facility had earlier constrained the industry especially those in the MSME sector which did not have the complete manufacturing capability in-house,” the ..
Source: Economic Times
Importers taking advantage of concessional rate of import duty will have to give prior information to the customs officers about goods being imported and also its estimated quantity and value, the CBIC has said. The Central Board of Indirect Taxes and Customs (CBIC) has amended the Customs (Import of Goods at Concessional Rate of Duty) Amendment Rules, which lay down the procedures and manner in which an importer can avail the benefit of a concessional duty on import of goods required for domestic production of goods or providing services. One major change that accommodates the needs of trade and industry is that the imported goods have been permitted to be sent out for 'job work'. The absence of this facility had earlier constrained the industry, especially those in the MSME sector which did not have the complete manufacturing capability in-house. Even importers who do not have any manufacturing facility can now avail the IGCR, 2017, to import goods at a concessional customs duty and get the nal goods manufactured entirely on job work basis. However, some sectors such as gold, jewellery, precious stones and metals have been excluded. "An importer who intends to import goods at a concessional rate of duty shall give a one-time prior information of such goods being imported to the jurisdictional customs officer. "He shall also furnish the name and address of the premises of the importer and his job worker, if any; the nature and description of imported goods used in the manufacture of goods at the premises of the importer or the job worker, if any; and the nature of output service rendered utilising imported goods," the CBIC said in a circular. The importer would also have to give prior-intimation before import regarding the estimated quantity and value of goods to be imported, the exemption notification and serial number, the estimated duty forgone and the port of import with respect to a consignment. "This information may be provided by e-mail on a consolidated basis for a period not exceeding one year rather than in a transactional manner for every import," the CBIC added. Another major incentive provided in the amended rules is to allow those who import capital goods at a concessional customs duty to clear them in the domestic market on payment of duty and interest at a depreciated value. This was not allowed earlier, and manufacturers were stuck with the imported capital goods after having used them as they could not be easily re-exported. The CBIC said the Rules have been amended in view of the demands from the trade and industry and having regard to their changing needs as per prevalent global practices. "The amendments are also an effort towards creating an enabling environment for the promoting manufacturing by domestic industry to make them competitive globally and also make them self-reliant in furtherance of the goal of Atmanirbhar Bharat," the CBIC said. The rules further said an importer shall utilise the imported goods for the intended purpose or re-export the same, within a period of six months from the date of import, failing which the importer is liable to payment of duty with interest. In case the importer intends to clear the unutilised or defective goods on payment of requisite duty and interest, the import duty payable would be equal to the difference between the duty leviable on such goods but for the exemption availed and that already paid, if any, at the time of importation, along with interest.
Source: Economic Times
India's economy will do well once vaccination reaches a critical mass as pent up demand, global recovery and easy nancial conditions will boost activities, RBI's Monetary Policy Committee (MPC) member Ashima Goyal said on Tuesday. As India battles a "fearsome" second COVID wave, she also said the damage to the economy due to lockdowns is much less and is unlikely to extend beyond the rst quarter of the current scal. "India has the potential to be a centre of vaccine production and will be able to ramp it up soon. Once vaccination reaches a critical mass, the economy will do well with pent up demand, global recovery and easy nancial conditions," she told PTI in an interview. The eminent economist said the current localized reversal of unlocks has successfully bent the curve. "It is less disruptive of supply chains since it is adapted to local conditions and need not go all the way to a full lockdown," Goyal said. Recently, S&P Global Ratings slashed India's GDP growth forecast for the current nancial year to 9.8 per cent saying the second COVID wave may derail a budding recovery in the economy and credit conditions. According to Fitch, India's real GDP is expected to grow 9.5 per cent in 2021-22 (April 2021 to March 2022). Asked how the government's scal expansionism will play out with the rating agencies, Goyal said by the standards of advanced economies, India's post COVID-19 scal expansion has been relatively modest she said it will be possible to reverse it in the medium-term. "Since India's long-term growth story is intact, rating agencies will be willing to give it time," she said, adding a persistent, non-tax nanced rise in expenditure, however, can create problems. On the government's ambitious target to make India a USD 5-trillion economy by 2024-25, Goyal said "after such an extended and unforeseen pandemic, it will take longer." "Moreover, COVID-19 related uncertainties are not over yet," the eminent economist noted. Asked why Indian economy failed to move at a higher growth trajectory in the last seven years, she said India has unfortunately suered from over-reaction and pro-cyclicality in macroeconomic policies, which aected the nancial sector. "There was too much stimulus in the 2000s and too much tightening in the 2010s," Goyal said, adding that nancial regulation was also pro-cyclical. On the government's decision of privatisation of two PSU banks, she noted that while some PSU banks have to become more eicient and energetic, at present it is better to focus on increasing credit ows. "India has had the slowest rates of private credit growth in the world in the 2010s... moreover, diversity in ownership and strategies makes for more stability in the nancial sector," she said.
Source: Economic Times
The second covid wave might slightly impact the textile sector's supply and demand dynamics primarily in Q1FY22, said ratings agency India Ratings and Research (Ind-Ra). However, a sustained export demand, learnings from the first wave, stronger balance sheet and liquidity compared to Q4FY20 will enable the sector credit profile to remain stable in FY22, the agency said. "The supply chain has been impacted by the local lockdowns imposed at key textile hubs such as Tirupur, Ludhiana, Surat and Bhilwara," the agency said. "The restricted movement of goods means non-availability of inputs such as yarns and fabric is likely to have a short-term impact on the finished output." Besides, it pointed out that labour availability has also been impacted but moderately and at much lesser severity than that during the first wave. "Shop floor are likely to remain functional at a few plant sites but a restricted occupancy level. However, 1QFY22 may not be a lost quarter, thanks to strong export markets." "Moreover, most cotton textile players will have adequate inventory given the second wave has hit us in April-May and because the fresh inventory is available during November to March." Nevertheless, this supply chain disruption may lead to a 20-30 per cent YoY of reduction in toplines in Q1FY22. "Again, the recovery expectation varies depending on the sub-sector. Export-focused garments and home textiles are likely to remain resilient compared to the spinning and fabric segment." "The export order book was reported to be yoy higher at end-March 2021 with garment players. However, the 1QFY21 shipments are likely to get deferred to 2QFY22. Challenges on the availability of containers and high shipping costs however have been impacting profitability since 3QFY21 and are likely to remain in so in the near term." As such beyond 1QFY22, Ind-Ra assumes a demand recovery across the sub-segments, driven by the unleashing of pent-up demand in 2HFY22 with the start of retail, offices, educational institutions, social functions among other things, moderately countered by weak household balance sheets. "The growth rates will also benefit from the low base effect. Ind-Ra expects the export demand to remain favourable with geo-political tensions and China, Plus One story continuing to play." "Demand recovery continues in export markets, which is at least 30% of the India's total textile produce."
Source: SME times
Finance Ministry tells court it is receptive to citizens’ needs, has already offered significant duty relief Requests for relief from the Goods and Services Tax (GST) on critical COVID-19 materials will be placed before the GST Council at its May 28 meeting, the Centre told the Delhi High Court, which had asked it to consider exempting the GST levied on oxygen concentrators imported for personal use. Stating it had an ‘open mind’ on all tax relief requests, the Finance Ministry, in a counter affidavit filed before the Bench of Justices Rajiv Shakdher and Talwant Singh on Tuesday, argued that merely levying a reasonable GST rate on oxygen concentrators cannot be considered a violation of the Right to Life under Article 21 of the Constitution. If the argument of the petitioner is accepted, then it will lead to absurd consequences and interpretations, wherein citizens will be seeking exemption from property tax, since housing is an essential facet of Right of Life... or exemption from taxes on several food items since Right to Food has been held by the Supreme Court to be a part of Right of Life under Article 21,” the Ministry submitted to the court. Judgment reserved The Court, which reserved its judgment following Tuesday’s proceedings assisted by Amicus Curiae Arvind Datar, had asked the Centre to drop the GST levy temporarily till the pandemic subsides. The petitioner in the case, a senior citizen getting a concentrator as a gift from a nephew abroad, had invoked Article 21 to challenge a May 1 notification that levied 12% GST on such imports from 28% earlier. ‘Parity to deter misuse’ “Significant relief has already been provided on personal imports of oxygen concentrators with reduction of duty incidence from 77% to 12%,” the Ministry said, adding that tax parity between commercial and personal imports would prevent misuse of the latter route. “It is felt that any person importing concentrator for personal use or has sources for receiving such supplies in gifts would be in better position to afford the nominal 12% GST as compared to others who source it through commercial channels,” the Ministry said, urging the Court to dismiss the petition. Since GST rates and general exemptions are prescribed on the recommendation of the GST Council, all the representations seeking GST relief shall be placed before the Council at its next meeting, the Ministry said. “The government is receptive to the needs of the citizens... The government has an open mind to all these requests (for tax relief and exemptions) and it would intervene for further concession, as necessary, in the present unprecedented and very dynamic situation to provide relief to the public, particularly those who are not in a position by themselves to afford the COVID relief supply,” the Ministry added. Finance Minister Nirmala Sitharaman had recently shot down a request from West Bengal Chief Minister Mamata Banerjee to the Prime Minister seeking GST waivers on COVID-19 related supplies.
Source: The Hindu
The rupee slipped below 73 in intraday trade on Tuesday but scaled back to close at 73.05 a dollar following cues from the stock market, which rose strongly for the second day. The rupee had closed at 73.22 a dollar on Monday and dipped to 72.96 in the intraday trade. Currency dealers say the Reserve Bank of India (RBI) was not seen intervening in the market through a clutch of nationalised banks. The rupee’s strength was in line with other Asian currencies, which gained as the dollar weakened overnight on the expectation of a prolonged low-rate environment. Korean won and Taiwanese dollar were the highest gains in Asia. The dollar index, which measures the greenback’s strength against other major currencies, fell 0.41 per cent to 89.79. According to Sriram Iyer, senior research analyst at Reliance Securities, the absence of RBI in the spot market led to the rupee strength. “Technically, the USDINR Spot pair holds resistances at 73.20 and 73.35. Supports are at 72.90 and 72.70,” Iyer said. Abhishek Goenka, managing director and CEO of IFA Global, said the rupee’s strength was a broad-based rally, aided by flows. Currency consultants, however, warn that there is no scope of being complacent as of now, and they are advising their importer clients to hedge at every possible point. Most importers are hedging in the near term, while some are covering for the medium term as well. The forward points have inched up as a result. The one year forward premium rose to Rs 3.86, against Rs 3.84 on Monday. The rupee has shown resilience against the dollar vis-a-vis its peers in the region. The country ran a current account surplus of $27 billion till February this year. In FY21 till February, India’s net FDI inflow was $41 billion, and FPI $36 billion. The rupee has scope to depreciate, considering it is still one of the strongest currencies in the region against the dollar. Year to date, the rupee has strengthened 0.36 per cent against the dollar, whereas most of the currencies have weakened. On a one-month basis, the rupee has strengthened 2.5 per cent, the highest in the region.
Source: Business Standard
The Scottish National Party (SNP), which will continue in government after emerging as the single largest party in elections this month, aspires to ramp up trade and investment ties with India. Robert Taylor, a senior spokesman for the Scottish government in Edinburgh, speaking exclusively to Business Standard, said: “India is an increasingly important market for Scotland and is identified as one of the top 20 countries for export growth.” In general, the devolved government plans to increase the total value of exports from 20 per cent to 25 per cent of Scotland’s gross domestic product (GDP). Taylor added the “potential areas of export growth with India include engineering and advance manufacturing, food and drink, technology, energy, finance and business services, and chemical sciences.” It also seeks inward investors from India. A notable investment in the past has been by Piramal Healthcare, which has a facility in Grangemouth, Stirlingshire. This unit manufactures bio-conjugates, including antibody drug conjugates. India has a consulate in the Scottish capital of Edinburgh. Scottish exports to India today are modest. In 2018, goods and services (excluding oil and gas) accounted for £295 million or just 0.9 per cent of Scotland’s international exports. The biggest sale was food and drink, representing £140 million, or almost half of total Scottish exports to India. Scotch whisky is a significant attraction for Indian consumers, notwithstanding the 150 per cent duty being slapped on imports by India. In fact, UK Prime Minister Boris Johnson has been at pains to plead with the Indian government that the tariff should be reduced. However, the Enhanced Trade Partnership agreement signed between the two countries a fortnight ago did not extend this concession. India is the eleventh largest inward investor in Scotland. This could change if the incentives provided by the British government, combined with the gloomy climate in India in the foreseeable future leads to a spurt in outward activity on the part of Indian companies. Front and centre in the SNP manifesto was an early independence referendum. While there is no definitive feedback to suggest there is majority support for Scotland’s separation from the United Kingdom, the sentiment for cessation has certainly risen since the plebiscite of 2014. This is because Scotland voted overwhelmingly against the UK exiting the European Union in 2016, but was forcibly dragged into leaving because of the overall British inclination being in its favour. The hardline Scottish view is, therefore, to quit the UK and rejoin the EU. Johnson is firmly opposed to another referendum. He argues the 2014 test of opinion was a once in a generation opportunity, which the SNP lost. Nevertheless, a major confrontation looms next year between the central government at Westminster and the SNP. Gordon Brown, former British prime minister and a Scot, weighed in on the debate in a recent column, affirming that Johnson’s “muscular unionism” was mistaken policy. He revealed that an opinion poll carried out on the same day as when 48 per cent of voters opted for the SNP, 73 per cent of Scots favoured “better cooperation between Scotland and the rest of the UK”. An argument against an independent Scotland is that it is economically unviable. Scottish finances are kept afloat by significant grants from London. For instance, 100 per cent of outgoings on education, housing, health and justice are funded by the UK government. The difference between revenue and spending by the Holyrood government was estimated to be 8.6 per cent of GDP in 2019-20. Scotland’s GDP being £146 billion in Q2 of 2020. Besides, riches from North Sea oil and gas are now a dwindling matter. It is, thus, all the more important that, if the SNP is to advance a credible case for freedom from the UK, it majorly shores up economic engagement with other countries to demonstrate it can stand on its own feet.
Source: Business Standard
An unexpected victim of the coronavirus crisis is one of Italy’s largest Chinese communities, now dwindling rapidly after more than 30 years of growth in a small town in Tuscany. The Chinese began to settle in Prato, 11 miles (17 km) north of Florence, around the end of the 1980s, attracted by plentiful work in factories serving Italy’s clothing industry. Mostly from the eastern region of Zhejiang, they created a parallel industry producing low-cost fabrics alongside up-market Italian businesses supplying the country’s fashion houses. The close-knit community grew year by year until it numbered around 25,000 at the end of 2019, when there were about 6,000 Chinese businesses in the town of 200,000 people, making Prato one of Europe’s largest concentrations of Chinese-run industry. Then, in spring last year, the coronavirus hit. About 2,500 people, or 10 percent of the community, have since left. For many Chinese in Prato, Covid-19 was a tipping point, intensifying doubts over their future in Italy, Europe’s most sluggish economy. First, the Chinese suffered discrimination as alleged spreaders of the disease. Then, as the community emerged almost unscathed amid Italy’s growing death toll, they were held up as a model of how to fight it. Now many are giving up, worn down by the Covid-induced recession and lured back to China by its greater success in combating the pandemic and brighter economic prospects. Simona Zhou, 50, returned to Zhejiang last July after almost 30 years in Prato, leaving her knitwear factory in the hands of her family. Suffering from a chronic illness, she felt vulnerable to the coronavirus and safer staying with her mother in China where the disease had been all but stamped out. “If she came back here she would have to stay mostly at home, but in Zhejiang there are no restrictions and people don’t even have to wear masks,” says Simona’s daughter Teresa Lin, a member of Prato’s town council.
Safer in China
Italy has seen more than 124,000 Covid-19 deaths, while China has reported fewer than 5,000. However many Chinese have left because of economic hardship rather than fear of contagion, as Italy’s low-budget textile industry has been hammered by repeated lockdowns. The economy is now gradually opening up, but for many Chinese textile workers the damage is done. Huang Miaomiao, a journalist from Zhejiang who lives in Prato, estimated about 2,500 people, or 10 percent of the Chinese community, had gone back to China over the last year. Marco Wong, another town councillor, said the figure was “realistic”. Official data is out of date because it can take years for returnees to inform Italian authorities, if they bother to do so. “There is a lot of discussion in the community about going back among people who came here in the 1980s,” said Wong. “They see China’s economy is growing, and its handling of the pandemic strengthened a positive view of their country of origin compared with how things were managed in Italy.” The Italian economy contracted by a steep 8.9 percent last year, and lost half a million jobs in the 12 months to March. While growing numbers of Chinese are leaving Prato, new arrivals have dried up, according to a town council manager, who cited school enrolment numbers. Up to 2019, around 200 new Chinese pupils per year were enrolled in Prato’s schools, he said, while in 2020 and 2021 the figure was “statistically irrelevant, practically zero”.
Shadow Economy
Prato’s Chinese community has been hard hit by the recession because many worked in the shadow economy. This meant they were not eligible for government support based on businesses’ tax returns for the previous year. “Most of the Chinese firms in Prato are in great difficulty,” says Luigi Ye, president of Prato’s Italy-China Friendship Association which has offered financial help to 800 Chinese families over the last year. Prato’s Chinese traditionally help each other and shun public welfare, but this “self-help” philosophy has crumbled in the face of growing poverty due to the Covid-19 crisis. Last year the council received 449 requests from Chinese for food tokens, and 218 requests for help to pay the rent. In 2019 not a single Chinese person asked for rent assistance. “The problem is that here there is no work anymore, there is only fear,” said Luca Zhou, who heads the Chinese community’s civil protection association. “Lots of Chinese have left, and lots more want to leave.”
Source: Business of Fashion
Finnish industry group Metsa’s Kurra textile fibre has been positively assessed by the Spanish private research organisation, Cartif, focusing on the environmental and social performance. Kuura is still in a R&D phase and the production process to make it is currently being tested and further developed at a tonne per day demo plant in Äänekoski, Finland. In regard to environmental performance, when compared to other commercial man-made cellulosic fibres (viscose and lyocell), and to cotton, Kuura shows the lowest impact on climate change, supporting its viability as a sustainable solution in the market of textile fibres. More specifically, the use of local, sustainably managed wood raw material combined with the use of fully fossil free energy obtained from the existing industrial mill site and with a novel process for the production of Kuura textile fibre result in a product with a clear climate change mitigation potential compared to the use of existing commercial textile fibres, Metsä said in a media statement. The social aspects of producing Kuura textile fibre were also evaluated by Cartif as they form one of the three pillars of sustainability. The results of the social impact assessment are very positive for Kuura. In other words, this kind of industrial production, in the way outlined by Metsä, would get the highest score in all impact categories included in the assessment, Metsä said. “Using Life Cycle Thinking already in the process design phase is a smart way of keeping sustainability aspects in the spotlight from the beginning. It is encouraging to see this commitment to sustainable development in big industrial players like Metsä,” Fernando Burgoa, LCA specialist at Cartif said in a statement. “Our manufacturing concept is based on locally-sourced wood that comes from forests owned and managed mainly by our cooperative owner-members, the use of never-dried paper-grade pulp as the raw material, and a comprehensive integration to a fossil free bio-product mill. Our own early estimate told us that the Kuura concept must be competitive in both environmental and social sustainability. Having now the proper LCA results to support this estimate gives us confidence that we are on the right track,” Niklas von Weymarn, CEO of Metsä’s innovation company, Metsä Spring said. Cartif is a horizontal, private and non-profit research institution, whose main mission is providing innovative solutions to the industry to enhance their processes, systems and products, improving their competitiveness and creating new business opportunities.
Source: Fibre2fashion
The Ministry of Labour and Vocational Training has released an instructional video for all factories about how to upload an updated list of workers for the ministry’s benefits database. The video was posted on the ministry’s official Facebook page after it notified factories in the textile, garment, footwear and travel products and bags sectors on May 12 to update their workers' telephone numbers prior to May 27. "This update will make it easier to support the families of citizens who are experiencing difficulties due to the Covid-19 epidemic," it said. In addition to the 22-minute instructional video, the ministry also recommends that factories that are unsure about what to do or are unable to comply with the guidelines call its 1297 hotline during regular working hours for assistance. The Garment Manufacturers Association in Cambodia (GMAC) deputy secretary-general Kaing Monika told The Post on May 17 that the association has always advised members to follow the labour ministry’s instructions in a timely manner. However, sending the updated list of workers for some factories is difficult because some of them have changed their phone numbers and some new workers do not have their National Social Security Fund (NSSF) membership card because the issuance of NSSF cards has been suspended during the Covid-19 outbreak. "Of course, the best practice is to make these subsidy payments based on proper legal documents, because it provides accountability and it can be fully audited," he said. The ministry has warned that if any worker fails to provide their current phone number to them, that worker will be the person held solely responsible if they fail to receive the cash assistance provided by the government.
Source: Phnom Penh Post
Garment and textile companies want their workers vaccinated against Covid-19 on a priority basis, and said they could buy the vaccine directly from the suppliers. Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), said a proposal sent to the Government for the purpose is meant to speed up progress in "achieving community immunity and help enterprises stabilize production." The worsening pandemic situation in the industrial zones is a big concern for enterprises and their workers, he added. The number of infected workers was 466 as of Monday, including 369 in the northern province of Bac Giang, according to the Vietnam General Confederation of Labor. Bac Giang on Tuesday decided to shut down four industrial parks, Van Trung, Quang Chau, Dinh Tram in Viet Yen District, and Song Khe – Noi Hoang in Yen Dung District. Nguyen Van Thoi, chairman of apparel manufacturer TNG Investment and Trading JSC, which employs over 16,000 workers in Thai Nguyen Province, said the company has earmarked funds to buy vaccines for its workers and wants the government to connect it with suppliers. It has also strengthened Covid prevention measures by ensuring social distancing in its factory in Thai Nguyen and telling employees coming from the two severely affected provinces of Bac Giang and Bac Ninh to temporarily stay at home. The chief of a textile firm in Hung Yen Province, who sought anonymity, said the government should accept funding from other sources to buy the vaccines. Textile and garment exports rose 9 percent year-on-year to over US$9.5 billion in the first four months of 2021, according to the Ministry of Industry and Trade, which attributed the rise to the revival in some main export markets and free trade agreements. Vietnam has nearly 400 industrial parks, 30 border gate economic zones and 20 coastal economic zones, which employ nearly four million workers.
Source: VN Express
