“In reference to the Press release by Central Board of Direct Taxes on “Launch of new eling Portal of the Income Tax Department - Nonavailability of e-ling services from June 1- 6, 2021”, it is informed that some DGFT services wherein CBDT PAN validation services are being consumed in the DGFT IT systems will get impacted during this period,” DGFT said in a statement. The government on Wednesday said that services of the Directorate General of Foreign Trade such as application for a new importer-exporter code (IEC), modication applications and one-time linking of Aadhaar for e-sign purposes will not be available from June 1-6 due to non-availability of PAN Validation Services. “In reference to the Press release by Central Board of Direct Taes on “Launch of new e-ling Portal of the Income Tax Department - Non-availability of e-ling services from June 1-6, 2021”, it is informed that some DGFT services wherein CBDT PAN validation services are being consumed in the DGFT IT systems will get impacted during this period,” DGFT said in a statement. The services include application for a new IEC, application for amendments/modication in an IEC, and one-time linking of Aadhaar for e-sign purposes. DGFT said that in case of any queries/ issues, exporters, importers and other members of trade may contact DGFT Helpdesk at 1800- 111-550 from 9:00 am to 6:00 pm Monday to Saturday.
Source: Economic Times
Leading to higher refunds, affecting govt revenues The GST Council meeting on Friday is expected to take a call on removing the anomaly of inverted duty structures for footwear and textile industries…………
Source: The Hindu Business Line
Raise turnover threshold to ₹5 cr.: CIA The Consortium of Indian Associations (CIA) has urged the Centre to increase the turnover threshold limit for micro enterprises to facilitate their exemption from the Goods and Services Tax (GST).
Source: The Hindu
According to the latest data available with the government, India’s exports reached $50.7 billion during the first seven weeks of the fiscal year, 11% higher than the corresponding period in 2019-20. India’s exporters are not complaining about the order book, despite some hiccups in recent weeks due to lockdowns across states. According to the latest data available with the government, India’s exports reached $50.7 billion during the rst seven weeks of the scal year, 11% higher than the corresponding period in 2019-20. The initial weeks of the last financial year were washed out due to a strict country-wide lockdown in India, which coincided with a similar situation across large parts of the world. But with Europe, the US and China opening up, this year is looking different. “Even in these weeks, when there were restrictions in several parts of the country, we have done well. It gives us optimism that the numbers for the full year will be much better this time,” a government source told TOI. While exporters tend to agree, there is also a bit of concern over their sustainability. “There is growth, which is a feel-good factor. But we can’t rejoice unless it is sustainable,” said Sharad Kumar Saraf, president of lobby group Fieo, while attributing a part of the increase to higher realisation due to a spike in commodity prices as well as freight. “The anti-China sentiment in several countries has also helped Indian exporters,” he added. Others, however, appear more optimistic, although they complain of labour shortage holding them back. “The demand is good, but the problem is manufacturing because some of our workers have gone back home. So, things may slow down a little in June and July, although April and May have been good,” said Colin Shah, chairman of the Gems & Jewellery Export Promotion Council. Similarly, A Sakthivel, who leads the Apparel Export Promotion Council, says the current financial year promises to be better, although exporters are facing problems in Karnataka.
Source: Times of India
Shortfall estimated at Rs 2.7 trn; Rs 1.1 trn may be met via cess collection The Union government has proposed market borrowing of Rs 1.58 trillion in the current fiscal year (FY22) to compensate states for the goods and services tax (GST) revenue shortfall in view of inadequate cess collection this year. This will be the second straight year of additional borrowing as the Covid-19 pandemic extends into 2021. The Centre has pegged the GST compensation requirement at Rs 2.7 trillion for FY22, of which Rs 1.1 trillion is expected to be met through cess collection. Like last year, a revenue growth of 7 per cent has been assumed to forecast the shortfall and borrowing ..........
Source: Business Standard
While the revenue department will take a final call on the hike, sources said the total allocation for FY22 may finally jump to about Rs 25,000-30,000 crore. The government will likely raise the allocation for its flagship export tax refund scheme from the budgetted Rs 13,000 crore for FY22, as the current outlay is expected to fall way short of the amount required to implement recommendations of the GK Pillai panel, an official source told FE. While the revenue department will take a final call on the hike, sources said total allocation for FY22 may finally jump to about Rs 25,000-30,000 crore. The Pillai committee was tasked with the job of recommending rates for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. It is supposed to reimburse various embedded levies (not subsumed by the GST) paid on inputs consumed in exports. The suggestions are being vetted by both the revenue and commerce departments. The RoDTEP rates are expected to be announced in two weeks. However, the RoDTEP outlay is expected to be much lower than that for the Merchandise Exports from India Scheme (MEIS), which was replaced by this scheme. The government has approved Rs 39,097 crore for MEIS for FY20. Of course, both the schemes are not strictly comparable. While RoDTEP is an export levy refund scheme, MEIS was typically an incentive programme. In March, Pillai, who was formerly commerce secretary, had told FE that “low budget outlay” was unlikely to be a constraint for meaningful implementation of the scheme. “The finance minister has already indicated that enough funds would be made available…,” he had added Since exporters themselves have no fool-proof data or even complete knowledge of all taxes embedded in the export products, the committee has had a difficult task of determining the RoDTEP rates for as many as 8,000 tariff lines. The exercise has been done in a manner as comprehensive as possible in keeping with principle that taxes are not meant to be exported, Pillai had said, but added the scheme could still take 2-3 years to stabilise. Sections of the exporters’ community, however, apprehend that the government could reduce the RoDTEP rates or the coverage of the scheme to limit the cost to the exchequer. Any such move, they have warned, will delay a recovery in exports, which have started to surge from March after maintaining a roller-coaster ride in the wake of the Covid-19 outbreak. The government, they said, should keep the RoDTEP outgo open-ended and not curtail the rates to limit refunds to a certain annual budgetary outlay, if the idea is to keep exports truly zero-rated in sync with global best practices. The RoDTEP replaced the “WTO-incompatible” MEIS from January 2021 but the refund rates are yet to be declared. Under MEIS, most exporters were getting scrips amounting to 2-5% of the freight-on-board value of the shipment. Merchandise exports surged a record 196% year-on-year in April, driven mainly by a favourable base. However, even in absolute term, exports in April stood at $30.6 billion, up almost 18% from the same month in 2019 (before the pandemic struck), mainly on the back of improved order flow. The government has now set an ambitious target of $400 billion for FY22, against $291 billion last fiscal. For this to be achieved, the government should try and address the liquidity woes of exporters, who have been awaiting the release of tens of thousands of crores under the MEIS, exporters have said. For its part, the government, faced with a resource crunch and the urgent requirement of boosting healthcare spending to fight Covid-19, has already started processing the MEIS benefits, a senior official recently said.
Source: Financial Express
Footwear and readymade garments may have higher rates of goods and services tax (GST) with the GST Council expected to take up correcting the inverted duty structure in its meeting on Friday. The fitment committee, which recommends rate changes to the Council, has proposed increasing the rate on footwear (less than Rs 1,000), readymade garments, and fabrics to 12 per cent from 5 per cent now. For inputs like manmade fibre and yarn, the panel has proposed reducing the rate to 12 per cent from 18 per cent to correct the distortion. The fitment panel comprises officers from the ...
Source: Business Standard
While overall COVID cases have started to decline, key focus states witnessing a surge in cases have changed from north/western states earlier to the east/southern states now With the world's worst pandemic outbreak scarring nascent economic recovery, the government may at the beginning of the unlock phase announce another stimulus package for the most hit sectors such as small business and selfemployed, Bernstein said. The brokerage in a note said its macro index suggests a deterioration in economic activity during April/May. Energy consumption has moderated, with power down over 4 per cent and oil consumption down over 16 per cent in May so far (all 2-year CAGR). E-waybills are down 16 per cent, suggesting the impact of scale down in factory production for some product categories, owing to the shut down in retail outlets. This is limiting the ability to scale up production, even as supply chains are not as deeply impacted, as the most regional government have lower restrictions on factory operations," it said. However, the initial strength in the summer crop sowing season (acreage up 21 per cent year-on-year) should limit inationary risks and help support the rural economy. "We believe that irrespective of the ability to spend, there will be another stimulus announced by the government when the unlock phase commences," Bernstein said, adding this is according to a usual script. We believe that the most impacted part of the economy remains the unorganised end markets (SMEs/Self-employed). While the impact on the lower middle class remains, this time we have argued that consumer sentiment in the uppermiddle class could be weak and this aspect needs to be addressed," it said. A stimulus, the brokerage said, in the form of loans and guarantees is required anyway, as downside support but the government needs to improve consumer sentiment. "We wonder if there is any tool to manage that, as tax breaks or direct stimulus cheques for discretionary spends will be limited by budgetary constraints. Time is a healer for sentiment, though, and we think it will be the same this time as long as another wave doesn't emerge," it added. While overall COVID cases have started to decline, key focus states witnessing a surge in cases have changed from north/western states earlier to the east/southern states now. The second wave of COVID cases started to peak from the second week of May, as cases started to fall in the key 5 states. Daily COVID cases have halved from the peak of 4 lakh cases to 2 lakh cases daily. The top 5 states (Maharashtra, Karnataka, Delhi, Chhattisgarh, and Uttar Pradesh) which account for 36 per cent of India's GDP, were witnessing an upsurge in cases in April. These states have started to see a reduction in cases and they now account for around 30 per cent of new cases reported (down from 70 per cent in April). Apart from those 5 top states, other states which are witnessing an increase in cases are Tamil Nadu, Kerala, Odisha, West Bengal, and Andhra Pradesh - which now constitute 48 per cent of new cases reported (as of May 24). These 5 states collectively account for 25 per cent of India's GDP. Of the 36 states and UTs in India, 31 are currently witnessing some form of lockdown, with the severity of lockdown depending on the COVID caseloads. Regional lockdowns that commenced from mid-April have continued until now with various state governments, extending it on a weekly or biweekly basis. Currently, lockdowns for most of the states have been extended till May-end/early June. "Despite what we see in the economy, there is no element of shock this time. Macro is deteriorating but at a slower pace than seen in March-April last year, as economic activity has not fully stalled. "The risk is the persistence of the weakness for a bit longer, especially because even after the previous phase, the economy was continuing to see some impact even until a few months back," Bernstein said.
Source: Economic Times
The challenge before New Delhi and Washington is how to translate their fundamental, societal and geopolitical convergences into actionable policies, S Jaishankar said on Wednesday. India-US ties are one of the major relationships in the world and the challenge before New Delhi and Washington is how to translate their fundamental, societal and geopolitical convergences into actionable policies, External Affairs Minister S Jaishankar said on Wednesday. Emphasising that he has "big agenda" for the US-India relationship going forward, Jaishankar said, "I think our relationship has come a long way. It's today one of the major relationships in the world and my own sense is that in Washington today, there is a real appreciation of the potential of this relationship, what it can do. And it's true of New Delhi as well." During a virtual conversation with former US National Security Adviser General HR McMaster in Battlegrounds' session on 'India: Opportunities And Challenges For A Strategic Partnership' presented by the Hoover Institution, Jaishankar said that keeping in mind issues such as impact of the COVID-19 pandemic, rise of different powers, "today we all recognize that it's not a question of one or two or three countries who will decide how the world." "The world is truly much more multipolar and if it is multipolar, then it's all the more important for countries to learn how to work with each other more effectively. And I see a big change in the American mindset in that regard, Jaishankar said responding to a question on the trajectory of US-India relations. "So the United States has not only an enormous ability to reinvent itself, it also has a great ability to assess its situation and re-strategise in a way." Noting that when it comes to the big issues of the day, "maybe because we are pluralistic societies, because we are political democracies, because we are market economies, that we have fundamental convergences." He said these convergences are societal and geopolitical. "I think the challenge before us is how to translate those convergences into actionable policies, he said, adding that he certainly looks forward to working on these with the Biden administration. Jaishankar, who arrived in New York Sunday and met UN Secretary General Antonio Guterres, travelled to Washington Wednesday where he is expected to meet US Secretary of State Antony Blinken. A State Department spokesperson said Blinken and Jaishankar would discuss a wide range of issues, including COVID-19, efforts to strengthen Indo-Pacific cooperation through the Quad, enhanced UN and multilateral cooperation. In addition to meeting his counterpart, Jaishankar is scheduled to meet US National Security Advisor Jake Sullivan, other senior officials of the Biden Administration, influential lawmakers, think-tanks, leaders of the corporate sector and members of the Indian American community. It is the first visit by a senior Indian minister to the US after President Joe Biden assumed office in January.
Source: Business Standard
“Based on the home state PPoB (principal PoB), sellers can register an ecommerce operator’s warehouse as an APoB and conduct business,” the body said in a letter to minister of state for finance Anurag Thakur. Industry experts said online sales are now enabling survival opportunities instead of being an additional revenue stream. The Federation of Indian Micro and Small & Medium Enterprises (FISME) has written to the government ahead of the GST Council’s meeting on Friday, urging it to permit MSMEs to register ecommerce operators’ warehouses across states as additional place of business (APoB) to get business through the online retail route. “Based on the home state PPoB (principal PoB), sellers can register an ecommerce operator’s warehouse as an APoB and conduct business,” the body said in a letter to minister of state for nance Anurag Thakur. Industry experts said online sales are now enabling survival opportunities instead of being an additional revenue stream. FISME also sought that the 18% GST rate slab be applicable to all auto parts and components. “Having one rate for all the parts and accessories will save retailers and small producers of harassment and greatly ease transactions,” said the letter. The industry body also sought resolution of inputta credit (ITC) accumulation, which has a considerable impact on MSMEs operating on low capital margins. The issue is more acute for sectors facing inverted GST structure, it said. “ITC may be allowed to be converted into tradable instruments (secured) to unlock capital; this will unlock working capital as well as free liquidity in the market,” the body said.
Source: Economic Times
Due to the lockdown, if the units are unable to execute these orders, this will result, not only in the short term loss of orders and export earnings, but also a long term loss of the buyers, AEPC chairman A Sakthivel said. The Apparel Eport Promotion Council (AEPC) on Wednesday urged the government to declare apparel eports as essential services and exempt the exporting units from lockdowns across India. Most of the apparel exports are season and fashion sensitive, and their salvage value becomes zero if the production and shipment are not done in time, it said. We request that the Central government should issue necessary instructions to all the state governments to declare apparel exports as essential services and exempt them from shutdown," AEPC Chairman A Sakthivel said in a communication to Prime Minister Narendra Modi. He said that considering the perishable nature of the product, apparel exports should be seen as essential services. Sakthivel stated that many neighbouring and competing countries have already accorded apparel exports the status of essential services. The sector, he said, showed resilience in getting back on track after being badly hit in 2020 with huge export order cancellations, bankruptcies and labourers going back to native places. "Export orders from the US and Europe have revived but now the Indian apparel exporters face the danger of losing these to competing countries as the second wave of COVID-19 crisis has resulted in lockdowns in several states," he added. Due to the lockdown, if the units are unable to execute these orders, this will result, not only in the short term loss of orders and export earnings, but also a long term loss of the buyers, the chairman said. "Our competing countries like Bangladesh, Vietnam, Cambodia and Pakistan are making all eorts to take orders from these regions and if we lose our buyers at this point, they will not come back in the near future,” Sakthivel added. Further in a webinar, he has asked the buying houses and agents to explain to the international clients that the situation in India is getting better by the day. He said that they should convince their clients not to cancel their orders as he believes India will bounce back by midJune. Though buyers are not looking at mass cancellations, like it happened in 2020, certain products will not be able to ship, the council said. The apparel industry engages about 13 million direct workers.
Source: Economic Times
At all levels, MSMEs are the ones that are really getting hit across the board. There is denitely a need for some kind of stimulus for them, be that at any level. It has to be concentrated, it has to be focussed and it has to be a combination of both state and Centre, said Vineet Agarwal, President, ASSOCHAM at ET Now's India Development Debate.
Source: Economic Times
As the global economy recovers from the pandemic, the Turkish textile industry wants to start a new era of collaboration with international companies and brands to exceed its $ 100 billion production capacity. Turkey, the world’s fifth-largest supplier of textiles, expects to export approximately $ 12 billion worth of textiles ($ 30 billion including apparel) in 2021. The Istanbul Textile and Raw Materials Exporters Association said in a press release that Turkey’s textile and apparel industry’s $ 90 billion capacity could be boosted with stateof-the-art production infrastructure and qualified capacity facilities. The imminent recovery of international trade offers a great opportunity for cooperation between Turkish textile companies and foreign partners,” said Ahmet Oxes, chairman of the Istanbul Textile and Raw Material Exporters Association, in a release. .. “We are experiencing an era in which global brands, especially technical textile companies, need more and more cooperation. We want to turn the era of pandemics into an era of opportunity by building win-win relationships. Our domestic textile sector already boasts a number of leading businesses with a proven track record in the global market, “added Öksüz. The rising momentum of the technical textile sector in recent years, the impressive capacity of this sector, and Turkey’s strategic position between Europe and Asia have the potential to bring significant benefits to all stakeholders. It enables partnerships and will soon be reflected in the country’s trade value. It’s a very dynamic sector characterized by a spirit of innovation and entrepreneurship,” said Öksüz. “Our deeply rooted and integrated textile business is an industry that is constantly updated, backed by R & D and innovation capabilities, revealing the industry’s cutting-edge infrastructure and dynamism.” The Customs Union Agreement between Turkey and the European Union, which came into effect in 1996, makes Turkey’s textile industry fully compliant with EU standards and standards. Fiber2Fashion News Desk (KD) As the global economy recovers from the pandemic, the Turkish textile industry wants to start a new era of collaboration with international companies and brands to exceed its $ 100 billion production capacity. Turkey, the world’s fifth-largest supplier of textiles, expects to export approximately $ 12 billion worth of textiles ($ 30 billion including apparel) in 2021.
Source: Eminetra
The government of Tanzania has waived import duty on machines and materials used for processing leather to encourage investments in the leather industry. It aims to promote local processing of leather products and is implementing a project to train over 419 livestock keepers in methods that help add value to the hides and skins of their livestock. The announcements were made by Kitila Mkumbo, the Tanzanian minister for industry and trade, in the Parliament last week while tabling the budget proposals for the year 2021-22. The project for training livestock keepers has already started in three districts of Arusha region. It is being conducted by the state-run Tanzania Industrial Research and Development Organization and financed by the Tanzania Commission for Science and Technology, said Tanzanian media reports quoting Mkumbo. The Tanzanian government will also be mobilising the development of the textile and garment industries and improving the ease of doing business in the country. The government has amended two laws through the Finance Act of 2020 and is in the process of introducing the Trade Remedies Act of 2021 to protect local businesses and control importation of products and market distortion by subsidised products which come to the local market at lower prices.
Source: Fibre 2 Fashion
The Challenge Fashion Group, a Chinese company on Wednesday vowed to expand its business under the China-Pakistan Economic Corridor (CPEC) in Pakistan which would create over 20,000 jobs for locals, CPEC Authority Chairman Lt General (R) Asim Saleem Bajwa said. He said the Chinese investor had already established a textile factory in Lahore which was a huge export-oriented unit. In his tweet, Bajwa said the textile factory being run by the Chinese Challenge Fashion Group had produced over 5,000 jobs for locals. During his visit to the factory in Lahore, Asim Bajwa expressed satisfaction over the establishment of the unit of international standard, saying that the owner of the company was now keen to establish a separate Special Economic Zone in Pakistan that would be exclusively an export-oriented zone. He said a number of Chinese investors were lined up for investment in Pakistan’s industrial sector and soon all would be accommodated. He said this was the model for new SEZs which would boost the industrial output and exports. Earlier this week, Prime Minister Imran Khan had lauded the strategic and bilateral partnership between Pakistan and China and directed the relevant authorities to introduce a new visa category for foreign investors. “In order to transform these relations into strong economic ties, it is necessary to promote investment in areas of mutual interest and provide all possible incentives to investors,” he had said. In the meeting, different investment projects under the CPEC were discussed.
Source: The News
