The GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on December 31 and discuss, among other things, report of the panel of state ministers on rate rationalisation The GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on December 31 and discuss, among other things, report of the panel of state ministers on rate rationalisation. This will be a physical meeting, which will also discuss correction in duty inversion in certain goods. The 46th GST Council meeting will be held on December 31 in Delhi, an official said, adding that it will be an extension to the pre-budget meeting with state finance ministers on December 30. The Group of Ministers (GoM) on rate rationalisation will submit report to the Council. The panel has reviewed items under an inverted duty structure to help minimise refund payout. Besides, the Fitment committee, comprising tax officers from states and the Centre, has made many "sweeping" recommendations to the GoM regarding slab and rate changes and taking items out of the exemption list. Currently, GST is a four-tier slab structure of 5, 12, 18 and 28 per cent. Essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. On the top of the highest slab, a cess is levied on luxury and demerit goods. There have been demands for merging the 12 and 18 per cent slabs as also taking out certain items from the exempt category to balance the impact of slab rationalisation on revenue. West Bengal's former finance minister Amit Mitra has urged the Union finance minister to roll back a proposed hike in textile from 5 per cent to 12 per cent saying this would lead to closure of around one lakh textile units and 15 lakh job losses. Telangana Industries Minister K T Rama Rao has also urged the Centre to withdraw its proposed plan to increase GST rates. Industry has also opposed the rise in tax from five per cent, citing higher compliance cost especially for the unorganised sector and MSMEs besides making the poor man's clothing expensive.
Source: Business Standard
Textile and footwear industries have been up in arms against the GST Council’s decision in September to correct the inverted duty structure by increasing the GST rates on textiles and footwear with effect from January 1. The Goods and Service Tax (GST) Council, which will meet in New Delhi on Friday, may discuss deferment of hike on GST rates on textiles and footwear from 5% to 12% and give more time to the group of ministers on rationalisation of tax rates and slabs to submit its report. Textile and footwear industries have been up in arms against the GST Council’s decision in September to correct the inverted duty structure by increasing the GST rates on textiles and footwear with effect from January 1. At present, tax rate on manmade fibre, yarn and fabrics is 18%, 12% and 5%, respectively. Apparel and clothing up to Rs 1,000 per piece currently attracts 5% GST. Synthetic and artificial yarn have been changed to 12% but natural yarn like cotton, silk, wool yarn are still in 5% slab. For footwear also, the price differential has been done away with with a uniform 12% GST rate. At present, footwear up to Rs 1,000 a pair attracts 5% GST. The Council could also look at giving more time to e-commerce operators (ECOs) such as Zomato and Swiggy, to comply with the requirement for them to pay the 5% GST on restaurant services supplied through them from January 1, to modify their software as the invoicing responsibility has also shifted from restaurants to them. In September 2021 it was announced that tax liability will be on ECOs for restaurant services provided through them. However procedural aspects like invoicing and other compliances were only clarified by a circular issued by the revenue department on December 17, giving them less than two weeks time to change software. The Council will also likely extend the time given to the seven-member group of ministers led by Karnataka chief minister Basavaraj S Bommai to suggest measures to rationalise GST rates as the two month time given to it has ended on November 27. The GoM will review the current tax slab rates and recommend changes as needed to garner more resources as well as review special rates and recommend rationalisation measures, including merger of tax rate slabs, required for a simpler rate structure in GST. Its terms of reference also include review of the supply of goods and services exempt under GST with an objective to expand the tax base and eliminate breaking of input tax credit (ITC) chain. It would also review the instances of inverted duty structure other than where GST Council has already taken a decision to correct the inverted structure and recommend suitable rates to eliminate inverted duty structure as far as possible so as to minimize instances of a refund due to inverted duty structure.
Source: Financial Express
The Union budget for FY23 may introduce a raft of changes to customs duties as the government leans on tariff rationalization to promote local manufacturing, a person aware of the discussions said. The Centre held public consultations on the culling of obsolete duty exemptions and has received representations from the industry about high input costs in several sectors. Promoting local value addition and improving cost-competitiveness will get special attention in the FY23 budget, the person cited above said on condition of anonymity. The budget may reduce the duty on basic raw materials, including metals, which have seen prices soar in recent months while withdrawing concessions for an identified list of products, including various intermediates used in manufacturing where domestic capability has improved over the years, the person cited above added. Duty concessions given in the past for items like fasteners and buckles used in apparel, upholstery fabrics and various intermediates used in the manufacturing sector may face the axe. An email sent to the finance ministry seeking comments for the story remained unanswered till the time of publishing. Experts said the budget needs to rationalize duties across the value chain, from raw materials and intermediates to finished products, while industry representatives called for customs duty relief for supplies and equipment used in covid-affected sectors such as hospitality. The budget may simplify import procedures, especially on rules of origin, and certain schemes like manufacturing and other operations in warehouse regulations, said Bipin Sapra, a tax partner at EY India. “The industry has been hoping for a dispute resolution scheme, and there is a need to further digitize import processes on lines similar to GSTN for ease of doing business," Sapra said. “During the first two waves of covid-19, tourism was one of the hard-hit sectors. It is a strategically important sector as it provides opportunities to skilled as well as unskilled job seekers, thereby providing employment to all sections of society. To revamp growth, it is important to rationalize customs duties on procurements by the hotel industry," said Pradeep Multani, president of industry lobby group PHDCCI. Multani said items such as air-conditioning equipment, beds and mattresses and furniture, which are key items of capital spending by the hotel industry, are subject to 20- 25% customs duty, which will need to be reduced to around 10%. India also needs to rationalize basic customs duties on specialized transport vehicles such as ambulances, which stand at more than 100%, he said. Businesses are also asking for integrated GST relief on imports of covid-related medical supplies, which was given during the second wave of the pandemic, till the end of next year. The Narendra Modi administration is currently wooing investments into specified sectors such as textiles, electronics and IT hardware by offering production-linked incentives and to the infrastructure sector through tax incentives
Source: Live Mint
The government will soon circulate revised versions of the ecommerce policy and ecommerce rules to spell out comprehensive guidelines for all online transactions, covering all digital commerce and service providers, including marketplaces, ridehailing companies, ticketing and payment companies, said people aware of the development. The idea is that the two drafts will be released at the same time and be in sync with each other, reducing the scope for misunderstanding. The Department for Promotion of Industry and Internal Trade (DPIIT) under the ministry of commerce will release the draft ecommerce policy, which will lay down the ground rules for online trade and address gaps in overall digital commerce policy. The ministry of consumer affairs, food and public distribution will release the draft ecommerce rules aimed at ensuring consumer interest is protected. "Bringing out both (policy and rules) at the same time will ensure greater synergy and more clarity for the industry," said one of the people cite. 'Ecommerce Sector may Grow to $188 b by 2025' Both departments have released drafts in the past that were not in tandem with each other and had created confusion for businesses. The latest draft of the policy by the DPIIT is expected to focus on setting up a regulator, framing an ecommerce law, and penalties for violations. It will cover all ecommerce companies - Indian as well as foreign-funded ones. "This will be a comprehensive policy for all ecommerce companies operating in India," said one of the persons cited above. The earlier draft of the ecommerce policy had mainly laid down principles for usage of data for development of the industry by Indian and foreign-funded companies to prevent misuse and access of such information. In June, the Ministry of Consumer Affairs released draft ecommerce rules for public consultation. They sought to bar affiliated entities from selling on ecommerce platforms, as well as restrict flash sales. That was opposed by top industry groups and didn't find favour with the finance and corporate affairs ministries, as well as the government's public policy think tank, Niti Aayog. However, the latest version is expected to cover all ecommerce firms - Indian and foreignfunded - and focus more on safeguarding consumers. The ecommerce sector is expected to grow to $188 billion by 2025 from $64 billion in 2020, according to estimates by accounting and advisory firm Grant Thornton. The online retail sector - one of the country's biggest job creators - has faced flak from small traders and offline retailers for alleged predatory pricing, preferential treatment for related parties and flouting of several regulations.
Source: Economic Times
India has initiated several measures to provide relief and financial support to various sectors of the COVID-19-hit economy, while at the same time, fiscal consolidation is also under focus, a finance ministry report said recently. Fiscal deficit for this fiscal has been estimated at ₹15,06,812 crore, which is 6.8 per cent of projected gross domestic product (GDP) of ₹2,22,87,379 crore. The union budget had projected a fiscal deficit of 6.8 per cent of GDP for this fiscal ending in March 2022. There has been a definite uptick in tax collections and government's revenues till September and the gross tax revenue (GTR) at the end of September 2021 was ₹11,83,808 crore, it said. Increasing the buoyancy of tax revenue through improved compliance, mobilisation of resources through monetisation of assets, improving efficiency and effectiveness of public expenditure etc. are the important measures directed towards this goal, the report said. The fiscal deficit of ₹5,26,851 crore in the first half of this fiscal was about 35 per cent of the budget estimate, it said. Lower fiscal deficit during H1 implies that the economy is, slowly but surely, getting back on the rails, the ministry report was quoted as saying by Indian media outlets. Better fiscal results are expected with the increased momentum of the economic recovery in the second half the current financial year, it said.
Source: Fibre 2 Fashion
Leoht Africa has partnered with the Indian Chamber of Commerce to boost the retail sector of Nigeria’s textile industry and position it as a leading hub in the Central and West African market. According to the Managing Director, Leoht Africa, Bunmi Aliyu, the partnership aims to build a yearly and sustainable international sourcing platform for organisations to trade and secure orders from corporate buyers and resellers. Aliyu disclosed this at the 2021 edition of the Source Textile and Apparel and Retail Sourcing Fair West Africa Exhibitions. She said the past two years have been a challenge with the effects of COVID-19 and its impact on travel as well as the ability to trade, travel and meet new suppliers. She noted that the Nigerian retail sector has survived, adapted and thrived despite the challenges, just as research by the Global Retail Development Index, showed that Nigeria is the leading retail market in Africa with $295bn of retail sales recorded in 2020. “We focus solely on showcasing the best textile, home and gift products and brands to local buyers. The concentration of professional visitors from this targeted sector ensures that everyone you meet at the exhibition will be a useful connection,” Aliyu added. On his part, the Regional Director, Indian Chamber of Commerce, Kolkata, Debmalya Banerjee, said the textile sector in Nigeria was one of the largest private employers in the past as it provided employment to over one million Nigerians and had always been a major player in the manufacturing sector of the economy. He said the large vibrant consumer market, talented and enterprising young population, attractive geographical location and launch of the African Continental Free Trade Area (AfCFTA), provide the right opportunity for Nigeria to become a leading textile hub in the Central and West African market. Banerjee said India, with its position as one of the largest cotton growers in the world and producers of textiles, is capable of helping Nigeria in reviving its textile and apparel sector. He revealed that India is working to boost its technical textile industry and would be willing to partner with and support Nigeria in terms of provision of textile machinery, technology, capacity building and training in the entire textile value chain. Banerjee said, while Nigeria is diversifying its economy to boost non-oil revenue and is focused on strengthening its agricultural and manufacturing capacity, the textile sector offers tremendous opportunities. The Governor of Lagos State, Babajide Sanwo-Olu, said the India-West Africa trade offers an opportunity to rethink ways in which people do business, trade and investment across countries and continents. Sanwo-Olu, who was represented by Head, Public Affairs, Office of Sustainable Development Goals and Investment, Sanusi Abdulateef, said people should explore ways of ramping up the use of new and emerging technologies to improve the trade and business environment, and to maximise the benefits of global trade. He, however, commended the Government of India for its partners with Nigeria, as well as the “Look Africa Policy”, which recognises the immense potential of Africa as the home of the world’s largest free trade area by number of participating countries and the fastestgrowing economies in the world. Sanwo-Olu said the partnership, which is not just for Nigeria but for the entire West Africa, is very necessary, especially as the countries move into the implementation stage of the African Continental Free Trade Area Agreement (AfCFTA).
Source: Guardian
"Since India will be adding over USD 130 billion or so in the current fiscal, we should aim to build on the same and thus aim much higher. "Since we are likely to cross USD 400 billion in 2021-22, we should focus and aim for exports in the vicinity of USD 525-530 billion in 2022-23," FIEO President A Sakthivel said in a statement. The country's exports are expected to register healthy growth rate in the financial year 2022-23 and might touch USD 530 billion as exporters are "flushed" with orders, the Federation ofIndian Export Organisations (FIEO) said on Wednesday. It added that additional exports will come from some of the PLI (productionlinked incentive) sectors in the next fiscal. "Since India will be adding over USD 130 billion or so in the current fiscal, we should aim to build on the same and thus aim much higher. "Since we are likely to cross USD 400 billion in 2021-22, we should focus and aim for exports in the vicinity of USD 525-530 billion in 2022-23," FIEO President A Sakthivel said in a statement. He said exporters across sectors are flushed with orders for the next fiscal , which will push the growth prospects in the next fiscal.
Source: Economic Times
He was speaking at an event on 'Weaving Growth for Textiles', organized as part of the Vibrant Gujarat Global Summit (VGGS) 2022 has become the best destination for investments due to industry-friendly policies implemented by the state government, Chief Minister Bhupenmdra Patel said here on Wednesday. He said the state government has provided several incentives for "technology upgradation, skill enhancement-development, and promoting textile parks-clusters in its textile policy." He was speaking at an event on 'Weaving Growth for Textiles', organized as part of the Vibrant Gujarat Global Summit (VGGS) 2022. "Gujarat has a conducive environment for all industries, including textiles. The state has made significant contribution to the textile industry through Prime Minister Narendra Modi's 5-F formula, that is farm to fiber, fiber to fabric, fabric to fashion, fashion to foreign," he said. He further added that with the help of new technology, patterns, skill up-gradation, the state's textile industry is growing fast, with Surat's contribution being very significant. "Gujarat produces 37 per cent of the country's total yarn and is known as the country's textile capital. This industry accounts for 13 per cent of India's total exports. Gujarat has also added a textile course to its 25 ITIs, with arrangements made not only for large-scale industries but also for developing small and medium scale industries," he said. On the occasion, Union Minister of State for Textiles Dharshana Jardosh said, under the leadership of PM Modi, the Centre has implemented a number of schemes for the development of the textile sector to make the country a global leader. The PM has announced the construction of seven textile parks in India at a cost of Rs 4,500 crore, she said. The PLI scheme will provide a huge benefit to ready-made garments, man-made fibers and technical fiber sectors, she added.
Source: Business Standard
For China, the Regional Comprehensive Economic Partnership (RCEP) agreement will facilitate establishment of the new dual-circulation development pattern, which takes the domestic market as the mainstay while letting domestic and foreign markets reinforce each other, as it contains high-level opening-up commitments by member countries for both trade and investment. The full implementation of the agreement will bring zero-tariff treatment to nearly 30 per cent of Chinese exports, according to official Chinese media. The agreement will also bring more opportunities for Chinese enterprises to invest in related economies, according to estimates by the ministry of commerce. In 2020, China's exports to RCEP members exceeded $700 billion, which accounted for 27 per cent of the nation's total exports. China's imports from the RCEP region were worth around $778 billion, or about 38 per cent of the country’s total imports. The implementation of the RCEP agreement will also reshape the economic relations between China and Japan, thanks to the formation of direct free-trade relations between the two for the first time, Chinese media reported. Under the agreement, ASEAN member states will significantly expand duty-free treatment to Chinese products as well. Chinese enterprises will also be able to lower import costs related to advanced technology, key equipment, key components, consumer goods, pharmaceuticals and medical devices, and production services like design, research and development, energy conservation and environmental protection, to better meet the domestic market's needs for consumption updates. RCEP’s implementation will usher in a new wave of growth for China's cross-border ecommerce sector as well, according to experts.
Source: Fibre 2 Fashion
The logistics market of China expanded by 9.7 per cent year-over-year (YoY) to reach 288.8 trillion yuan (approximately $45.34 trillion) between January 2021 and November 2021, according to the data from the China Federation of Logistics and Purchasing. The market grew despite a sudden increase in COVID-19 cases and global supply chain crisis. The logistics sector of China collectively made a revenue of 10.8 trillion yuan between January and November, up 15 per cent YoY with a 2-year average growth of 8.2 per cent. Import logistics had reduced by 0.2 per cent YoY in the 11-month period, but it bounced back in November, growing by 8.9 per cent YoY, according to the federation. Coal imports of China increased significantly as the growth rate went up to 200 per cent in November and 10.6 per cent YoY between January and November.
Source: Fibre 2 Fashion
The Fashion Revolution’s ‘Out of Sight’ report shows that the problem of transparency in fashion supply chains still persists. Sustainability generally stands out with its environmental aspect for all sectors including fashion, but it also has economic and social dimensions. In this sense, transparency is of great importance for consumers to know what they are wearing and by whom, under what conditions their clothes are made and with what environmental impact. Fashion Revolution, a non-profit organization, shared developments in transparency in the fashion supply chain in the 2021 update to their ‘Out of Sight: A Call for Transparency From Field To Fabric’. In the report, it was stated that supply chain transparency has increased among 63 major fashion brands and retailers, but progress has remained rather slow and shallow. “Only 2 out of 63 brands are disclosing the full list of their textile production sites” Only 2 out of 63 brands are disclosing the full list of their textile production sites, an increase of 1 compared to last year, while 49 of them are disclosing the first-tier manufacturers where their garments are cut and sewn, an increase of 2 compared to last year, according to the report. 29 brands are disclosing processing facilities such as dyehouses, while only 28 brands are disclosing production sites such as fabric mills and 44% of brands are disclosing at least some of their textile production sites. This means an increase of 13 percentage points since last year. Lack of transparency of fashion brands hinders accountability The report points out that the lack of visibility of supply chains allows unsafe working conditions and environmental destruction to thrive, as well as obscuring who has the responsibility and power to redress these issues. For many years, there have been reports of labour abuses that continue to emerge in the textile mills, informal workshops, tanneries, dyehouses, and farms around the world that supply materials to the global fashion industry. Recent investigations into the forced labour of Uyghur people to produce cotton and textile products in Xinjiang, China, are among the recent prominent examples in this sense. A lack of transparency from global fashion brands surrounding where their cotton is produced prevents a chain of accountability for the human rights crisis. “There is a real need for transparency beyond the first tier of manufacturing” Fashion Revolution Policy and Research Coordinator Ciara Barry said; “There is a real need for transparency beyond the first tier of manufacturing, where millions of hidden workers face labour abuses to make the fabrics in our clothes”. Barry emphasized that brands must urgently take responsibility for environmental and human rights impacts across their entire supply chains and stated that this starts with disclosing all textile production facilities in their supply chains”. Who made my clothes? Fashion Revolution is founded after the collapse of the Rana Plaza building on April 24, 2013, killing 1134 garment workers and has since been calling for greater transparency and accountability in the global fashion industry. The organization advocates that everyone should be able to learn how, where, by whom and under what conditions their clothes are made, wherever they are, and raises awareness in this area with the #WhoMadeMyFabric campaign. The report calls on major brands and retailers to expand supply chain transparency by disclosing all textile manufacturing facilities in their supply chains, while also calling on citizens everywhere to demand greater transparency beyond the first tier by asking brands #WhoMadeMyFabric? on social media. They are also inviting producers to share their stories using #IMadeYourFabric so that people can connect more closely with the people who produce the fabrics and raw materials in the clothes they wear. Carbon emissions in the supply chain must be tracked down to the raw material The report also discusses the transparency issue with the aspect of environmental impact and it is stated that more than 70% of emissions in fashion’s supply chains occur during the production and processing of raw materials. However, only 17% of brands publish their carbon footprint at the raw material level and 26% at the production/process level, while 62% publish emissions for their own operations and facilities. While 44% of brands disclose renewable energy use data in their direction operations and only 7% disclose renewable energy use data in the supply chain, only 18% disclose absolute energy reduction data in the supply chain. The report points out that this may be due to the difficulty of capturing carbon and energy data down the supply chain, where brands need to rely more on estimates, as environmental data may not yet be monitored and measured within their suppliers’ facilities. It emphasizes that major brands cannot accurately measure their climate impacts if they do not track carbon emissions in the supply chain down to the raw material level.
Source: Textilegence
The US department of labour recently announced an award of a $5-million cooperative agreement to the American Centre for International Labour Solidarity to improve workers’ rights in agricultural supply chains in Honduras and Guatemala, and the garment sector in El Salvador. The initiative will be administered by the department’s bureau of international labour affairs. In Guatemala and Honduras, the project will target workers in the palm, banana and melon sectors. The project will prioritise underserved communities and include a focus on gender and racial equity to address the systemic violation of internationally recognised workers’ rights in the agricultural and garment sectors, an official release said. The American Centre for International Labour Solidarity will work with existing workers’ organisations in Central America to help them represent and advocate effectively for agricultural and garment workers. The project will educate workers at the grassroots level and help them exercise their rights, build organisational capacity and help ensure worker-led participation in negotiations and dialogue. The agreement is part of a more than $20 million commitment to promote respect for and compliance with labour rights in the region, and a component of the US administration’s Root Causes of Migration Strategy. The project aims at raising collective action for workers to exercise their rights; helping worker organisations train, represent and advocate for agricultural and garment workers to garner better wages, working conditions and job security; and improving engagement between workers and government officials as well as the private sector to negotiate, address and resolve workers’ rights concerns. The project also includes legal support, advocacy campaign planning and dialogue exchanges between local workers’ organisations.
Source: Fibre 2 Fashion
