GST Council approves key Bills
Sin tax: GST Council caps tax on tobacco, luxury cars, pan masala at 15%
Rupee hits 17-month high, but crucial resistances coming up
Budget session: Dip in revenue may force govt to broaden tax net
Bilateral deal with UK will be better than EU system
INTERNATIONAL
Asian PTA prices edge lower last week
Google’s Project Jacquard is the Latest in Textile Technology
Karl Mayer unveils multibar lace with block yarn
Clearing the decks for introduction of a major indirect tax reform in Parliament, the Centre and States on Thursday approved draft Bills for implementing the goods and services tax (GST) in States and Union Territories (UTs).
“The GST Council has granted its formal approval to all five legislations,” Finance Minister Arun Jaitley said after the meeting here on Thursday, adding that he would try to take them to Parliament expeditiously.
This is the 12th meeting of the GST Council. It had last met on March 4 when it cleared the Central and Integrated GST Bills. Previously, the Council had also approved a draft Bill to compensate States for any revenue loss arising out of GST for a period of five years.
With a targeted implementation date of July 1 for GST, the Centre is keen to take the four Bills — CGST, IGST, UTGST and compensation — to the Cabinet latest by next week and then table them in Parliament.
The Session adjourns on April 12 and passage of the Bills in the current Session is essential for the timely roll-out of the new tax system. The SGST Bill will be tabled in State Assemblies.
Sources said that the Council also decided that supplies made to special economic zones would be zero rated (a tax rate of zero) and considered as physical exports.
Cap on cess
The GST Council also approved a proposal to cap the cess on sin goods and environmentally harmful goods at 15 per cent.
The Council will now meet on March 31 to discuss and finalise the rules on four issues relating to composition, transition, valuation and input tax credit.
“With this, all nine rules will be cleared by the Council,” Jaitley said, noting that five sets of rules relating to refunds, registration, invoices, payments and processes have already been approved. The committee of officers will then begin the fitment of commodities into the rate slabs and the Council is expected to hold another round of meetings thereafter to approve the exercise.
The Finance Minister expressed optimism, stating that the GST roll-out from July 1 seems to be on track.
SOURCE: The Hindu Business Line
The goods and services tax (GST) Council on Thursday approved two more laws — state GST (SGST) and Union Territory GST (UT-GST) — increasing chances of a roll-out of the new indirect tax regime from July 1.
The goods and services tax (GST) Council on Thursday approved two more laws — state GST (SGST) and Union Territory GST (UT-GST) — increasing chances of a roll-out of the new indirect tax regime from July 1. Earlier, the council had approved the CGST, IGST and the compensation law.
At its 13th meeting held in the Capital, the council also capped the cess on demerit goods or so-called sin tax at 15%, the proceeds of which will be used to compensate states that may face a reduction in revenue once GST is in force.
Finance minister Arun Jaitley said the cess would be restricted to five commodities. “We have kept a headroom of about 3% for imposing the cess on demerit goods,” the FM observed at a press conference. He clarified it would be levied in a manner such that the final tax incidence on such demerit items would not be lower than the existing tax rates. The cess is to be levied on tobacco, luxury cars, pan masala and aerated drinks.
Tax experts welcomed the cap on the cess of 15% and the fact that it would be limited to a few goods. However, several of them have drawn attention to the fact that the government needs to clarify on area-based exemptions given to companies in states such as Uttarakhand. They have pointed out that the exemptions cannot continue since they break the value chain.
While the four laws —CGST, IGST, UGST and compensation law, will require the Cabinet’s nod first and a parliamentary approval subsequently, the SGST law will have to be approved by the state Assemblies. The council in its next meeting on March 31 would approve four sets of rules under the GST laws. Jaitley said while five sets of rules — relating to registration, payment, refunds, invoices and returns — had already been approved, the council in its next meeting would discuss and approve the remaining four rules relating to composition, transition, input tax credit and valuation.
The council will need another major meeting to approve the fitment of different commodities in the four slabs — 5%,12%,18% and 28%, Jaitley said.Post the fitment exercise the GST will be ready for a rollout. The industry has often represented the delay in announcement of rates for commodities was proving to be hurdle in preparation for the new taxation regime.
The commerce ministry had asked for a zero rating of goods supplied to SEZs a proposal which has been approved by the council.
“It would also be critical for the government to immediately release the approved GST draft Bills along with relevant rules, rate schedules, etc for the industry to adequately assess the final impact of GST and align its business operations for a smooth and timely transition,” Krishan Arora of Grant Thornton India LLP said.
SOURCE: The Financial Express
A sudden surge in risk appetite is seen everywhere following the US Federal Reserve meeting on Wednesday.
The US Fed increased interest rates by 25 basis points as expected and has reiterated that there will be gradual hikes, going forward. The median projection for the Federal funds rates for 2017 has been kept unchanged at 1.4 per cent, same as was projected in the December meeting.
This means that only two more rate hikes could be on the cards for the rest of the year. This took the sheen off the safe-haven dollar and triggered a sharp sell-off. The dollar index tumbled about a per cent — from around 101.5 to 100.5. Both the Euro and the British Pound were up more than a per cent.
US on strong footing
It is evident from Janet Yellen’s press conference on Wednesday that all is well with the US economy. She said that the US economy has progressed in line with expectations so far and the Fed expects it to improve further, going forward. The Fed is also more convinced about the improvement in the US job market and thinks that wage growth will also improve. The external global factors are the only risks that the Fed seems to be concerned about.
The dollar index breaking below 101 is a short-term negative. Inability to rise past 101 from the current levels of 100.5 may keep it under pressure. If the index continues to trade below 101, a fall to 99.5 or even 99.2 is possible in the short term. Whether the index manages to reverse higher from 99.5 or 99.2 will then decide the next move for it.
Rupee in spotlight
The Indian rupee has been in the news since the beginning of the week. The currency, which was stuck in a broad range of 66-68.85 for more than a year, finally broke beyond this range. The domestic market gave a thumbs up to the BJP’s victory in the recent State Assembly elections. It gave the much-needed boost to the Indian currency to breach 66 convincingly.
The strength in the currency enhanced further as the non-dollar currencies strengthened against the dollar after the US Federal Reserve meeting on Wednesday. As a result, the rupee climbed to a 17-month high of 65.23 on Thursday.
Where is the rupee headed?
The near-term view continues to remain positive for the rupee. The currency can strengthen to 65 or even 64.75 in the coming days. But a cluster of resistances poised between 64.80 and 64.75.
Since the currency has strengthened sharply in a short period of time, a break above 64.75 looks less probable at the moment.
As such the rupee is more likely to reverse lower from the 65-64.75 resistance zone. Such a reversal can take it lower to 66 or even 66.5 thereafter. But if the rupee manages to surpass 64.75, the doors will open for it to test 64 thereafter.
SOURCE: The Hindu Business Line
Maharashtra’s downward slide in revenue projection could force the Bharatiya Janata Party government to broaden the tax net and introduce new tax proposals.
The state’s budget for 2017-18 will be tabled on Saturday. While the Devendra Fadnavis government had opted to go easy on taxes in the first two years in office, the state’s fiscal managers warned of a push by the administration to ratchet up tax and non-tax revenues in the coming fiscal.
Top government sources conceded that the country’s most industrialised state will miss fiscal targets in 2016-17 with the Centre’s demonetisation drive hitting revenue collections and revenue expenditure continuing to rise.
According to Maharashtra Accountant General’s latest data, the government, which had targeted a revenue collection of Rs 2.71 lakh crore in 2016-17, had amassed Rs 2.05 lakh crore till January 31. Senior state officials admitted that garnering the remaining Rs 65,641 crore in the final two months of the year appeared challenging.
A sharp dip in sales of goods and taxes in the post demonetisation period saw sales tax collections dry up. Sales tax is the highest revenue earner for the government. For 2016-17, the government had targeted Rs 81,438 crore collection through sales tax, but the actual collection until January 31 was just Rs 69,253 crore, a 15 per cent deficit. Revenues from taxes on goods and services also nosedived. Only Rs 324 crore against a target of Rs 1,276 crore was collected till January 31.
At the start of the year, the government had targeted to raise another Rs 3,200 crore through land revenue, but only Rs 823 crore had been realised so far. The slump in the property market saw a dip in the stamps and registration revenues too. As against a target of Rs 23,548 crore, only Rs 16,348 crore had been collected till January 31. The state’s excise and electricity duty collections were also running 38 per cent and 50 per cent behind targeted goals till January 31.
The government had expected to net Rs 1.44 crore in tax revenue from its own sources. But the Accountant General’s data shows that only Rs 1.10 crore had been collected till January 31.
The non-tax revenue collections were faring worse. While the target was to collect Rs 19,927 crore, only Rs 9,034 crore had been collected till January 31.
Incidentally while the state’s share from central Customs duty was 28 per cent behind target, the Union excise duty collection was the only tax revenue to have met its target. While the government had estimated to collect Rs 3,946 crore Union excise duty at the start of the year, data showed that it had already collected Rs 4,075 crore till January 31. “There was a rush to pay up arrears using the scrapped high value currencies between November 10 and December 31. This may have boosted central excise collections,” an official said. But the overall sharp dip in revenue appeared to force the state to draw more from the public account.
Sources said that the government is banking on positive growth in the agriculture sector for 2016-17. The rural economy, which was in a spectre of consecutive drought spells, bounced back riding on a good monsoon in 2016-17. The state’s Economic Survey Report will be released on Friday.
Source: The Indian Express
Brexit will be beneficial for Indian manufacturers as a bilateral deal with the UK will be better than the current EU system, according to Sriramulu Balakrishnan, MD of KG Denim. He also says that as India does not enjoy any preferential tariffs relating to the US, any increase in import tariffs by President Donald Trump will not affect Indian exporters.
"US imports of textiles and garments from India are already subject to tariff. India does not enjoy any preferential tariffs relating to the US. Any increase in import tariffs will not affect Indian exporters, and this increase will be applicable to all countries. India exports denim fabrics to many countries in Asia, Africa and South America, which in turn are exporting garments to the US on a favourable nation policy. Only after concrete policies are announced in the US, can we discuss the impact of protectionism," Balakrishnan told Fibre2Fashion in an exclusive interview.
Talking about the global demand for denim fabrics, he said that they are changing every season with innovative finishes and technical aspect of the product.
"Jeans is a fashion product, brands and retailers are moving towards fast fashion. Our customers are moving towards selling fashion at a price, trying to imitate the Zara model. Therefore, there is constant pressure to provide new products on a regular basis," added Balakrishnan.
When asked about the competition in the textile product segments, he said, "All products in the textiles and apparel segment face competition. Our strategy has been to focus on niche segments so as to insulate our price and margin structure. Our ethical practices regarding labelling in organic and other segments have helped us build trust with our customers."
The demand for denim in the domestic market has grown at a strong rate of about 7.5 per cent CAGR in the past 6 years (2009-10 to 2015-16). Domestic market demand will continue to grow, with short-term variations due to demonetisation, fashion and domestic economic cycles. Export demand is currently stagnant due to uncertainties in many overseas markets, noted Balakrishnan.
SOURCE: Fibre2Fashion
PTA prices moved down in Asia in the last week due to ample of product availability in the region.
In FE Asia, average prices plunged by US$ 10/ton and quoted at US$ 665/ton in the last week, a reduction of 1.48 per cent compared to previous week.
In SE Asia, average prices reduced by US$ 10/ton and assessed US$ 685/ton in the last week, a fall of 1.44 per cent over the previous week.
In China, average prices edged lower by US$ 5/ton and quoted at US$ 670/ton in the last week, a drop of 0.74 per cent compared to previous week.
SOURCE: Fibre2Fashion
Project Jacquard is the latest textile technology developed by tech giant Google in partnership with denim brand Levi’s, featuring a new smart textile jacket designed for bike riders that allows the wearer to control their smartphone by gesture.
According to Google, the Project Jacquard jacket is made of conductive yarn, which is a combination of thin, metallic alloys with natural and synthetic yarns like cotton, polyester or silk. The jacket also comes with an embedded miniature battery, connectors, electronics, a Bluetooth controller that is capable of capturing signals, touch interactions and gestures via algorithms. Instead of taking your phone out of your pocket while you are riding on your bike, you can now tap, swipe or hold the cuff of the sleeve on your Project Jacquard jacket to answer the phone, turn music on, ask the time, get directions, read a message, and so on. “Project Jacquard makes it possible to weave touch and gesture interactivity into any textile using standard, industrial looms. Everyday objects such as clothes and furniture can be transformed into interactive surfaces”, says Google. “Using conductive yarns, bespoke touch and gesture-sensitive areas can be woven at precise locations, anywhere on the textile. Alternatively, sensor grids can be woven throughout the textile, creating large, interactive surfaces.” The design of this smart jacket is based on an existing Levi’s jacket, the Commuter Trucker, which is a jacket line specifically created for urban cyclists. Levi’s believes that technology that allows wearers to control their mobile experience and connect to a variety of services directly from the jacket is especially useful and makes it much easier to use a smartphone when riding a bike. Initially revealed in 2015, Google’s textile technology powered Jacquard jacket has finally evolved into a full-fledged product and is ready to be launched in Levi’s stores later this year, with a price of around $350.
SOURCE: Bizvibe
Karl Mayer, a leading provider of machines for warp knitting, technical textiles, and warp preparation for weaving, has developed new multibar lace fabrics with block yarn guides and bourdon cords, produced on Karl Mayer’s multibar raschel machines. The trend for using lace to create stylish garments is catching up in the textile industry.
The lace, with its typical relief-like patterns, can be produced in a wide variety of designs – ranging from classic styles to modern and extravagant looks, which bring an impressive quality to the garments.
Bourdon cords are classic materials used for designing apparel lace, and produce striking patterns. Thick yarns especially enable multifaceted and striking contours to be produced, but they are not that easy to handle during the production process. The guide bars in the front shog lines on the tried-and-tested ML 46 were fitted with special guides for processing chunky bourdon cords. Non-stretch types can now be used in counts of up to 2,500 dtex, and stretch types of up to 3,300 dtex can even be processed. The maximum possible yarn counts for multibar raschel machines equipped with standard knitting elements are just over half of these values respectively.
The decorative impact of this relief lace, with its “moving”, three-dimensional surface, can be specifically enhanced by integrating multicoloured effects. These multicoloured designs can be produced by using bourdon cords with a sheath of viscose, followed by package dyeing. Alternatively they can be produced from fancy yarns, which may be produced by playing together yarns of different colour, for example. Liners made from textured polyamide, in a count of 3,000 dtex, for example, can even be processed without any problems on the ML 46.
The main requirement of lace is that it should offer a wide variety of different styles and types. Different effects can be produced by the lapping arrangement of the pattern yarns, as well as by the design of the ground. Multibar lace machines, equipped with block yarn guides, can show just what types of grounds can be produced. During the development work recently carried out at Karl Mayer, the MLF 60/32 was equipped with 1"-block yarn guides in the six string bars of the last shog line.
SOURCE: Fibre2Fashion
