The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 07 JULY, 2017

NATIONAL

INTERNATIONAL

Businesses may face liquidity crunch under GST

With businesses required to remit taxes collected under the Goods and Services Tax (GST) regime every month, their working capital demand from the banking system is likely to go up. In the pre-GST era, taxes were remitted at quarterly intervals. Now, the working capital cycle of businesses will change from a quarterly to a monthly cycle, say experts. Liquidity of businesses could tighten as on the one hand they have to remit taxes collected on goods and services sold in the previous month, while on the other hand, trade credit, will continue to be 90 days or more in many cases. Liquidity under pressure Liquidity could also come under pressure as there may be delays in an enterprise getting the benefit of Input Tax Credit if, say, its supplier does not remit taxes on the sale of inputs in time. Input Tax Credit is a mechanism under GST to avoid the cascading impact of taxes. Under this, the credit of tax paid at every stage will be available as a set-off for payment of tax at every subsequent stage. Considering that the working capital cycle will change from quarterly to monthly, YES Bank is making a ‘GST Ready Working Capital Management’ solution available to customers, said Sumit Gupta, Group President & National Head — Business & Rural Banking. S Ravi, a Chartered Accountant, opined that under GST, working capital demand will go up mainly due to monthly (returns) compliance and payment of tax, which will marginally impact cash flows of businesses. Added a senior public sector banker: “Earlier if the goods supplied were rejected by a customer and the goods as well as the invoices were returned, then no tax was payable on such transactions. Now, under GST, once the goods are supplied, irrespective of whether they are returned or not, you need to pay a tax even as the buyer may get the benefit of trade credit. However, in case the goods are returned later, you can also claim a refund.”

Funds getting blocked

The banker observed that under the GST regime, in a running business, the combined effect of monthly tax payments, receivables on account of a longer trade credit cycle, and possible delays in getting Input Tax Credit could see funds getting blocked. Bhanwar Lal Chandak, independent economist, observed that working capital problems of micro, small and medium enterprises will get accentuated as banks, which are currently reeling under bad loans, are reluctant to give credit, while trade credit is already in the doldrums.

Source: Business Line

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ITF urges govt to reduce GST on MMF yarn to 12%

The Indian Texpreneurs Federation (ITF) has again urged the government to reduce the Goods and Services Tax (GST) on man-made fibres (MMF) yarn from 18 per cent to 12 per cent. The current GST rate on MMF yarn will lead to increase in fabric cost, inability of weavers to compete and de-growth. It will also not allow a weaver to take his input credit. During railway minister Suresh Prabhu's visit to Coimbatore for taking feedback on GST, a presentation was made to him by ITF. The federation also said that reducing the MMF yarn GST to 12 per cent will result in a 100 per cent efficient MMF value chain that is capable of competing against other fibres. Weavers will also be able to claim input tax credit (ITC) on yarn if the GST is decreases. The federation has also urged the government to reconsider GST on job work after fabric on apparel of 18 per cent as it truncates the ITC chain, considering that the GST will make weavers unable to utilise full ITC. It will also increase input cost as there's no big ITC for job workers. By reducing the job work on apparel to 5 per cent, weavers can achieve real cascading benefits by availing full ITC on garments and receive working capital benefits for job working units, according to ITF. The federation also said that it has taken various efforts such as continuous training for its members, launching 1stday 1st invoice campaign, handholding the entire value chain and submitting analytical data to GST Council. The presentation was also sent to finance minister Arun Jaitley, textiles minister Smriti Irani, state finance minister of Tamil Nadu D Jayakumar and co convenors of GST committee on textiles Yogendra Garg and Sanjeev Kumar.

Source: Fibre2Fashion

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Textile industries observe strike demanding abolition of GST

After GST was rolled out, Erode Handloom Cloth Merchants Association, Power Loom weavers Association, Bleaching and dyeing units had made a representation to the Centre for abolishing the five per cent GST imposed on textile goods. President of Erode Handloom Cloth Merchants Association R Ravichandan claimed that "strike is total. Textile industries here on Thursday commenced a six-day strike demanding abolition of GST on textile goods. More than 10,000 power looms, 5,000 textile retail shops, 400 textile bleaching, dyeing and printing units participated in the strike, industry sources said. After GST was rolled out, Erode Handloom Cloth Merchants Association, Power Loom weavers Association, Bleaching and dyeing units had made a representation to the Centre for abolishing the five per cent GST imposed on textile goods. President of Erode Handloom Cloth Merchants Association R Ravichandan claimed that “strike is total. News Bulletin act- New Trend Is Being Experienced In Markets, Says Expert About Rs 30 crore worth business would be affected in a day due to the strike. We will continue the strike till July 11, he told reporters.

Source: PTI

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Textile traders’ strike enters 4th day

Surat: The indefinite strike by agitating textile traders demanding removal of Goods and Services Tax (GST) from MMF fabrics has entered its fourth day here on Thursday. Around 165 textile markets housing more than 75,000 textile shops have downed their shutters for the last four days to protest against police atrocities and to press for removal of GST from MMF fabrics. Thousands of traders gathered under Ring Road flyover and sang bhajans at a programme organized by Textile GST Sangharsh Samiti (TGSS). There was heavy presence of policemen in the textile markets and at the venue where the traders were organizing the protest programme. The traders were annoyed over the presence of the policemen in riot gear there. The traders shouted slogans against Navsari MP C R Paatil and challenged him to come to the venue. TGSS spokesperson Jay Lal said, "Central government is nervous due to the indefinite strike by Surat traders. Our counterparts across the state are also on strike to protest against police atrocities on the traders. We are hopeful that the Centre will accept our 'No GST' demand." The TGSS announced a mammoth rally under the leadership of Hitesh Sanklecha, a textile trader from Good Luck Market who is on an indefinite hunger strike for the last six days. Sanklecha was felicitated for going on hunger strike on behalf of 75,000 textile traders. Sanklecha told TOI, "We are planning a mammoth rally of traders on July 8. Our target is to gather more than one lakh traders from Surat and other states. I will be on hunger strike for an indefinite period until the government accepts our demand for 'No GST' on fabrics."

Source: Time of India

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Textile traders extend strike for indefinite period

Amritsar: The Federation of Textile Traders of Amritsar (FTTA) has decided to expedient its strike against the GST for an indefinite period after staging a sit-in at Town Hall Chowk here today. Jatinder Singh Moti Bhatia, president, FTTA, said wholesale textile traders today decided to continue their strike if 5 per cent GST on unstitched clothes, including all kinds of fabric like blankets and shawls, is not lifted. Wholesale textile traders have been protesting against the NDA government for imposing the GST on clothes for a long time. The agitation by traders today received an impetus when MP Gurjeet Singh Aujla extended his support to them. Addressing textile traders, Aujla said he would raise their demand in Parliament in the next session starting from July 12. The MP accused the NDA government of hastily implementing the GST. He said the GST should have been implemented in a phased manner and initially on a trial basis. The MP said the newly introduced tax system would severely hit micro and small traders and it would not be surprising if they were out of business soon. Jaswinder Singh Bawa, a wholesale trader, said readymade garments, the value of which is less than Rs 1,000, would be charged 5 per cent GST and 12 per cent GST on over Rs 1,000 value apparel. He said the job work on apparel would attract 18 per cent GST. All wholesale cloth markets, including Shastri Market and Cash Dhara Bazaar were closed today. Textile traders said the textile sector provides maximum employment after agriculture and introducing multiple taxes on the sector would mean laying off thousands of people.

Protest against Central Govt

Wholesale textile traders have been protesting against the NDA government for imposing the GST on clothes for a long time. The agitation by traders on Thursday received an impetus when MP Gurjeet Singh Aujla extended his support to them. Addressing textile traders, Aujla said he would raise their demand in Parliament in the next session, starting from July 12. The MP accused the NDA government of hastily implementing the GST. He said the GST should have been implemented in a phased manner and initially on a trial basis.

Source: The Tribune

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GST registration: Hasmukh Adhia says multiple registrations under one PAN

The goods and services tax (GST) regime allows only one registration against a permanent account number (PAN), but firms with multiple business verticals can choose to apply for multiple registration numbers against a corresponding PAN number, revenue secretary Hasmukh Adhia clarified on Thursday. Answering a query on whether an entity which runs a manufacturing unit as well as a trading arm can have two different registrations, Adhia said it was an option and such a business can request the GST Network for multiple registration numbers. However, he added that such firms would be taxed on aggregate revenue of all the verticals. That is, these verticals with separate registration numbers can’t opt for the composition scheme in each for the turnover being below the specified threshold, if the aggregate turnover exceeds the limit. The composition scheme allows some businesses — manufacturers, traders and restaurants — with turnover of less than Rs 75 lakh per annum to pay a percentage of turnover as tax and file returns quarterly, rather than pay GST. “Separate verticals of a same business can’t be part of composition scheme. The entity will also be taxed on aggregate revenue of all its arms,” Adhia said. Adhia, along with the Central Board of Excise and Customs chairperson and other officials, were speaking on the first day of the proposed six-day session on GST. The GST Network, which has build its IT backbone, was represented by CEO Prakash Kumar.

Source: Financial Express

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GST shows legacy issues make for difficult policy transitions

Major policy transitions are tricky even where the net gain is positive. In India, policy transitions can be even trickier. There are legacy issues to contend with at every turn. Then there can be announcements with no follow-up, such as when a minimum support price is declared without any tracking of the acreage response and the corresponding warehousing requirement. Farm unrest was sure to follow. The transition to a nationwide goods and services tax (GST) on 1 July wisely provides an adjustment window until September during which glitches can hopefully be sorted out. The decisions taken by the GST Council on the issues falling within its very broad purview—the rate structure among them—have been as streamlined as they can be considering the number of parties whose consent had to be secured. All except one, having to do with the taxation of the financial sector, on which more further below. There are some obvious transition issues in terms of the robustness of the information technology platform for such a data-intensive taxation system. These have been signalled several times by many commentators, but the network seems confident it can hold up. There are access issues in remote areas. There is also worry about how the anti-profiteering provision will be implemented.  I never thought that the GST could actually carry collateral damage of any severity, but was alerted to it by a passing news item. The damage is not a consequence of the GST itself, nor of any decisions taken by the GST council, which has functioned thus far in an admirably cooperative spirit. It is a consequence of the non-transparent legacy of the taxation system being replaced by the GST. The news item was about GST impact on the textile industry (an altogether different issue has agitated textile traders, concerning the 5% GST rate on textiles replacing the earlier exemption under value-added tax). The Surat textile industry association presented the following facts on the pre-GST taxation structure on imports of textiles: 10% basic import duty, 12.5% countervailing duty (CVD) and 4% special additional duty (SAD), adding up to 26.5% (this is the summation approximation, but will do for now). Their submission was that after introduction of the GST at 5%, imports will attract duty of only 15%—the basic duty of 10% plus the GST of 5% on textiles. GST at 5% is leviable on domestic production also, leaving the nominal import wall of 10% basic duty firmly in place. The CVD was merely supposed to compensate for excise on domestic output, and the SAD was compensation for taxes on inputs going into domestic production. So with the GST replacing those levies (with full input credit), there should have been no problem, right? But in the textile case, as this submission brings to light, there was no excise on domestic production of textile fabric! The 12.5 % CVD turns out to have been a spurious addition to the basic duty, compensating for domestic excise that was not in fact leviable on textiles. The 4% SAD by contrast seems to have understated the incidence of input taxation, which by one (unverified) estimate stood at 11.5%. Adding CVD and SAD, the compensating levy on imports stood at 16.5% pre-GST, when it really should have been 11.5% (remember, excise on output was zero). So domestic producers were getting 5% more protection than the nominal import duty of 10%. Now that GST has rationalized the import wall to the basic duty of 10%, the Surat textile industry rightly fears for its survival. Should we be ramping up import duties (the basic levy) in order to hold the protection level constant in textile and other such cases? Textiles are among the most employment-intensive sectors in Indian manufacturing. Transiting out of an admittedly non-transparent regime will lay off large numbers of workers, with no immediate absorption possibilities in other sectors of manufacturing. How did this mess happen? It is merely one of the many quirks of the policy legacy in India. The matching of CVD to excise should have been done transparently and accurately in the pre-GST era by the Central Board of Excise and Customs (CBEC). If the domestic industry wanted higher protection than the basic customs duty, it should have been done by ramping up the basic duty itself, not through the back door with a spurious CVD. Frankly, this revelation caught me by surprise, although it is by no means the first time that I have learned about the taxation structure in India from industry associations. Indirect taxes in India have suffered from so many exemptions inserted into the small print, that any aerial overview of the rate structure never yielded the worm’s-eye view of the rates as they actually applied on the ground. Often those exemptions were at the behest of industry lobbies themselves, but the best way to learn about them was from calculations of tax incidence submitted by industry associations. Two-and-a-half years have elapsed since the Constitution Amendment Bill to enable GST was presented to Parliament. One might have expected the CBEC to call a review meeting during this very long period to assess the implications of lack of alignment between the CVD-SAD level and the domestic levies they were meant to compensate for. The actual GST rate to be settled on textile fabric by the GST council would not have been of any relevance. Why do these arms of government not see problems looming on the horizon? For that matter, why did the textile association itself not sound its concern and get the matter sorted out earlier? The textile story itself may well end happily. The alert has reached the proper quarters, and it seems possible that the basic import duty will be hiked up to 15%, which fortunately lies within the tariff bounds registered with the World Trade Organization. The textile industry is a major employer. And we most certainly do not need to add yet another sector to the list (steel, telecom, power) already contributing to the stressed assets of the banking system. Which gets me to the one problem I do have with the configuration of taxation worked out by the GST Council, having to do with the taxation of the financial sector. Banks in India have a presence in all or most states. The GST now requires banks to register in each state, and compute their turnover taxable to GST separately in each state jurisdiction. Maybe not an impossible task, but it does impose huge incremental demands on the banking system in terms of internal accounting arrangements and manpower attention. There was no time for training bank officials for this, although I do see advertisements for GST training modules under the National Skill Development Mission. Banks will most likely outsource the task to the big four accounting multinationals. They never had it so good. Banks have been under severe stress over the past few years quite independently of the overarching problem of declining asset quality, which continues to worsen as documented in the latest Financial Stability Report issued on 30 June. The additional stress has resulted from a sequence of policy transitions, each of which imposed a sharp unanticipated load on the duties of bank staff. Even commendable initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY) for financial inclusion were done with no advance preparation. PMJDY completely absorbed the front end of banks for essentially the first six months of calendar 2015. The voluminous application for a new account had to be filled in by bank staff themselves, who further had to cope with problems of names on Aadhaar and ration cards being altogether different for the same individual, and applicants not having a postal address to which the account passbook could be mailed. The further task of linking these accounts to direct benefit transfers of various kinds was borne principally by banks. Then there are the various insurance benefits attached to the new accounts, claims for which immediately started pouring in after the opening of an account, all of which are handled at the front end by bank staff. Demonetisation completely took over all bank staff, not just those at the front end, for essentially the last two months of calendar 2016. Hapless bank staff bore the brunt of public wrath over non-functioning ATM outlets, in addition to the work of collecting and counting stacks of demonetised currency. Many faced abuse and even violence from irate customers. Routine functioning ground to a halt. One customer who had run out of cheque leaves with which to withdraw cash from the counter, the only option in those early days, was told issuance of new cheque books had been indefinitely halted. Then there is the procedural burden of the farm loan waiver schemes announced by at least four state governments, with more to follow, of having to prepare lists of loans falling within the parameters of each scheme. A little-known feature of these schemes is that farmers themselves lose from incremental lending for farming being put on hold while the waiver is under process, which can take up to two years or even more. Now with GST, there are the state jurisdictional boundaries along which bank turnover has to be carved. The cost of outsourcing this task to the accounting multinationals will have to be borne by—well, banks. The final straw is the steep jump in provisioning requirements—introduced in late June—on loans referred to the National Company Law Tribunal for bankruptcy proceedings. This change is puzzling both in terms of the manner of its issuance (not through a public circular, the common channel for regulatory announcements) and in its impact, which will be counter-productive. Surely, this last imposition can be reversed.

Source: Livemint

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Textile m/c importers in quandary after EPCG scheme withdrawal 

 With the advent of GST  the Export Promotion Capital Goods  (EPCG) Scheme cease to exist. The closure of EPCG scheme has  placed the new investments currently in the pipeline under TUFS  Scheme under quandary.  As per the pre-GST  provisions  import of weaving  machines attracted CVD of  10.42% and SAD duty against  which importer could give the  EPCG certificate with a 15%  security deposit and take the  obligation to export 6 times of the  duty saved their resulting in the  Prime Ministers vision of Farm -  Fabric – Fashion – Foreign.  However  with the advent of GST  the CVD and SAD has been  replaced by 18% IGST which needs to be paid upfront and then  credit for the same can be taken against GST.  The new situation has completely changed the equation of  the project and has made them unviable thereby landing all current  projects to come to a standstill  according to Ahmedabad Shuttless  Looms Owners Association.  Illustrating an example  the association informed that when  units were importing weaving machine earlier to the tune of Rs. 100  crore then as per norms they were getting EPCG license issued by  giving a security deposit of Rs.1.57 crore as duty on would be Rs.  10.5 crore (15% of duty saved). Against this the units was taking  obligation to export approx. Rs. 63 crore of fabric.  Now as per current changes on the import value of Rs. 100  crore the unit importing textile machinery has to pay IGST of Rs. 18  crore immediately and take the set off for the same.  On account of the new norms  the Ahmedabad Shuttless Looms  Owners Association informed that the following problems have come:  1) Additional investment to be taken out of Rs. 18 crore. For  the projects which are already sanctioned and cleared it is impossible  to get these additional funds.  2) The amount of IGST of Rs. 18 crore would be set off against  Input/output GST difference which would take a period of 7 years to  set off( As IGST is 18% & GST is 5% on fabric)  3) Interest on the additional amount of Rs. 18 crore if calculated  (which is 20% cost of the project) increases the ROI by additional 2  years thereby making the project unviable and banks hence would  be unwilling to sanction these projects and may even ask to withdraw  from current project  4) There is no export obligation under this thereby it goes  directly against the Prime Ministers vision of fiber – fabric – fashion  – foreign  5) Green Filed projects will specially come under burden as  they have no existing business where GST credit could be available  to take a faster setoff.  With the above challenges it is impossible for the current  projects to take off and there are all possibilities of them not able to  start. Needless to say this would result in loss of industry loss of  exports | Soundararaja Mills Limited  loss of employment and the Indian textile industry will face  unprecedented losses  the association pointed out.  It is therefore imperative for the government to look into the same and make suitable amendments with immediate effect to curtail  this situation. For this the association has recommended the following suggestions:  A) To continue the projects which are already sanctioned and  in pipeline - imports under the EPCG or a bank guarantee of 15% of  the duty saved amount. This could be for a period of 3 months which  means imports which arrive till 30 September to have this clearance  window. This will enable the current projects to move ahead without any difficulty. It is akin to keeping drawback rates unchanged for 3 months so that the industry does not suffer  B) For new projects still to be sanctioned government must  give leverage to import these machines under a 15% bank guarantee  for the duty saved  The Ahmedabad Shuttless Looms Owners Association  pointed out that that the machines which are being imported are  currently ‘NOT BEING MADE IN INDIA’ and hence does not defeat  the governments vision of promoting “Make in India” concept.  In fact with new technology coming in the industry is looking  forward to make high quality fabrics resulting into greater export  market share.  Machines more than Rs. 1000 crore are already underway only  in Gujarat. Also this problem is not only of the weavers association  but also of spinners and processors who have also planned big  expansions and have machines on way worth multiple in crores  the  association said and called upon the government to resolve this  matter and make a suitable amendment keeping in line the vision of  “farm to foreign” and “Make in India”.

Source: Tecoya Trends

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Bhopal: Garment shop owners confused over GST

Bhopal: Confusion reigns supreme in garment shops and even showrooms selling branded apparels in the city over GST. Most of the shop owners are not clear about its implications and feel that the government implemented the new tax regime in haste. They complained that their business was suffering up to 80 per cent due to GST. Some businesspersons are charging GST of 4 to 12 per cent on garments while 28 on leather products. However, some branded garment companies like Levis and Luis Phillip are paying GST but not charging from customers. As per the GST Council, the prices of garments over Rs 1,000 will rise marginally. The council announced a tax of 5 per cent for yarn and cotton, and ready-made garments below the Rs 1,000 mark. For garments above Rs 1,000, the tax rate has been fixed at 12 per cent. Palash Sahu, owner of Ethlati, a showroom of designer lengha, suit and fancy dresses, New Market, told Free Press, “We are in process. It will take six to seven days more to implement GST properly. Still, neither our software nor charted accountant is updated. Government took the decision in haste. They did same during note ban. I have no objection to both decisions but they should give some more time beofre rolling down the market after notebandi.” Sahu further said, “Bazar mein paanch saal ka sabse zayada giravat aay hai… All businesspersons are busy in GST work. Not only us but also the sales of other businesspersons are down by 80 per cent. Most people are still confused whether the price will increase or decrease. Customer is not coming due to fear of GST, created by media or social media.” “Yes, we are charging GST from five to 28 per cent. We are charging 5 per cent tax on the product whose price is less or equal to Rs 1,000 and 12 per cent for products with price more than Rs 1,000. It is applicable for both stitched and unstitched clothes. It means if the price of cotton and silk saris is Rs 600 and Rs 4,000 respectively, then it will cost Rs 630 and Rs 4,200 now. The tax on leather product is 28 per cent. The price on clothing is same but we are charging GST while billing,” said ML Sharma, manager of Mrignaynee Emporium in GTB Complex, New Market adding, “Earlier we used to pay tax yearly but didn’t charge tax from customers. We have no problem in the tax but it is creating confusion among shopkeepers as well as people.” SS Verma, salesman in Khadi, Garamodyog Bhawan, New Market said, “We have stopped the sale on groceries like oil, honey, incense sticks et al for some days due to stocking. We are charging 5 per cent on products less or equal to Rs 1, 000 and 12 per cent on products costing more than Rs 1,000. Earlier, we didn’t charge any tax from the costumer. Still we are showing the tax in bill not on product but after taking advice from our advocate, we will implement it within two to four days.” “We are charging 5 per cent GST but I can’t give you details now because we are also not much clear on it. Still we didn’t get exact format of the tax,” said Ankur Agrawal owner of Agrawal Sarees, New Market. Sanjeev Maheshwari, owner of Bahurani Saree said, “We are charging 5 per cent GST on sari in any stuff. For example, if we have a sari of Rs 3,000, now it will become Rs 3,150,” adding, “There is lot of confusion in the market regarding GST and it will take four months to normalise.” “We are following what is written on portal. We also don’t know much about the tax but we are charging four per cent GST on our product as earlier we didn’t charge any tax,” said Ankit, manager of The Raymond Showroom, New Market. Pradeep Mishra, sales manager in Luis Phillip Showroom, New Market, said, “Yes, we are implementing the tax from July 1. But we are paying 12 per cent GST on cotton products and 28 per cent on leather products though not charging from customers. But we are also paying18 per cent on belt made of leather. It may be due to policy of our company.” “We are charging five and 12 per cent GST only on discounted products whose price is less and more than Rs 1,000. Now we have 40 per cent discount on jeans. So if the price of a jeans is Rs 2,141 after 40 per cent discount, the customer will have to pay Rs 2,284 due to GST. We are selling fresh products on fixed price without charging any tax,” said Abhishek Mukhaiye, manger of Levis showroom, New Market. Ravi , manager of Morni, a showroom of designer suits and lengha, New Market, said, “We don’t know about GST. However, we heard it through media.”

Source: Free Press Journal

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Rain damages cotton on 7k acres

Bathinda/Mansa : Crop on over 7,000 acres has been damaged in the state’s sprawling cotton belt spread over eight districts — Bathinda, Mansa, Muktsar, Ferozepur, Sangrur, Barnala, Faridkot and Moga — due to a week-long spell of rain. While the Agriculture Department is mulling a multi-pronged strategy to counter growing attack of whitefly on cotton at its existing ‘vegetative growth’ stage, some farmers have already started ploughing their standing cotton crop apprehending a  ‘whitefly epidemic’ as had happened in 2015. Then, whitefly had damaged over 80 per cent of the crop. “We are monitoring the developments related to whitefly on a daily basis. The crop is not in a danger zone as on an average, 1.5 adult whiteflies per leaf have been spotted. It is alarming when on an average, there are four adult whiteflies per leaf,” said Sukhdev Singh Sidhu, Joint Director (Plant Protection), Agriculture Department. This year, cotton has been sown on 9, 55,000 acres against 70,000 acres last year. Crop on at least 7,000 acres has already been damaged so far as it has got submerged in rainwater accumulated in the fields after incessant rains for three days last week. Though there is a possibility of checking the proliferation of whitefly by using pesticides, there seems to be no way out in case the crop has submerged. “The only alternative farmers are left with is to plough their fields and go in for paddy or lentils like ‘moong’,” said the agriculture official, also a member of the inter-state whitefly monitoring committee. Some farmers in Mansa, Nathana, Barnala and Bhucho have already started ploughing their cotton crop that was either damaged by rainwater or is under whitefly attack. Pritam Singh of Mehma Sarja has ploughed three acres of his standing cotton crop after spotting whitefly on its leaves. “We preferred to plough our crop at the initial stage so that we are not forced to go in for expensive and ineffective sprays of pesticides or insecticides,” he said. Surjan Singh of Barnala rued that his cotton crop had got submerged in knee-deep rainwater. So he had no option but to plough it and make the fields ready for the alternative paddy crop, he added. Govt hires ‘scouts’ to keep watch The Agriculture Department has deployed one ‘scout’ after every two acres of cotton crop across the state. These ‘scouts’ will keep a close watch on the crop on a daily basis and inform the authorities if they spot whitefly in the cotton fields. Inter-state Whitefly Monitoring Committee was also keeping tabs on the situation. It will hold a meeting on July 16 to discuss strategies to counter the whitefly attack.

 

Source: The Tribune

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Check-posts are gone, but truckers face barriers

Six days after the introduction of the Goods and Services Tax (GST), inter-State movement of goods is down, but truck operators are rejoicing in their liberation from the tyranny of inter-State check-posts run by commercial tax departments, and in the reduction in their travel time. “The Walayar check-post is gone,” exults KS Kaliyaperumal, President, Coimbatore Lorry Owners Association. Located on the Kerala-Tamil Nadu border, Walayar was India’s most dreaded check-post: truckers were often forced to unload and reload goods in the name of checking. The truckers’ relief, however, may be temporary; many States may set up mobile or roaming squads till the e-way bill mechanism is in place, tentatively by January. The e-way bill, which provides details of the goods, the consignee and the consignor, is the primary document for inter-State movement and tax compliance. “The commercial tax departments of Uttar Pradesh and Gujarat have set up flying squads, and Bihar and Madhya Pradesh may do so soon. In the next few weeks, almost all the States may enforce some kind of monitoring of inter-State goods movement,” said a source in an MNC logistics company. No one knows how the mobile squads will operate, but truck operators, like Ramesh Lakhotia of Lakhotia Transport Corporation, reckon that since the erstwhile check-posts filled many pockets, the establishment will strike back. He alleges that while check-posts have been phased out, State transport officials continue to collect ‘fees’ and delay goods movement. The payout of bribes on the Kolkata-Mumbai route is estimated at ₹10,000-12,000 per trip. Vineet Kanaujia, Vice-President - Marketing, Safexpress, sees things getting better from here. According to him, most States have removed check-posts and otherwise simplified procedures. Ramesh Agarwal, Chairman of All India Transporter’s Welfare Association, points out that the average travel time on the Delhi-Mumbai and Delhi-Chennai routes is down by 36 hours or more.

Goods bookings down

Lower transit time means lower operational cost and higher revenue for both truck-owner and transport operator. But Agarwal, who is mentor of the Agarwal Movers Group, says bookings are down to a third as the SME segment, a major customer, is yet to understand the nuances of GST. Truck operators across the country confirm that roads are deserted as most customers are yet to incorporate GST into their systems. “Check-posts are gone, but there is no cargo to move,” rued a trucker in Namakkal in Tamil Nadu. “We expect bookings to improve next week,” Agarwal said.

Source: Business Line

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Mauritius keeps India treaty out as it adopts BEPS convention

While Mauritius became a part of the multilateral convention to implement tax treaty-related measures designed to prevent base erosion and profit sharing, it left out the bilateral tax agreement with India from its purview. India Mauritius, India Mauritius news, india Mauritius latet news, india Mauritius agreement, India Mauritius bilateral tax agreement Mauritius included 23 bilateral treaties with different countries under the Organisation for Economic Co-operation and Development. While Mauritius became a part of the multilateral convention to implement tax treaty-related measures designed to prevent base erosion and profit sharing (MLI), it left out the bilateral tax agreement with India from its purview. This means the terms of agreement would not apply to transactions between residents of India and Mauritius. Mauritius included 23 bilateral treaties with different countries under the Organisation for Economic Co-operation and Development (OECD) agreement but left out India even though India had included Mauritius as a covered tax agreement (CTA) when it signed the multilateral treaty. Along with 68 other jurisdictions, India had entered into MLI last month. In an official statement, Mauritius said that the tax treaties which are not covered by the MLI, will be subject to a bilateral discussion with the respective treaty partners. Jayesh Sanghvi, national leader-international tax services, EY India, said, “The India-Mauritius treaty is unlikely to get modified by the MLI unless there is a change in position of Mauritius in future. However, from India perspective, the PPT rule and various measures on dispute resolution are adopted being “minimum standards” of the BEPS mandate.” Had the PPT rule been adopted by both countries, it could have an impact on grandfathering of investments made before March 2017 which are still protected from source taxation on capital gains under the India-Mauritius treaty as amended in 2016. Thus, Sanghvi said, one will have to wait and watch how the minimum standards (especially the PPT rule) will be achieved in the India-Mauritius treaty and its impact on existing / future holding structures.” “Owing to this exclusion (of the India pact), the terms of MLI shall not apply to any transaction entered between tax residents of India and Mauritius,” Rakesh Nangia, managing partner, Nangia & Co said. Interestingly, India also amended its treaties with Cyprus and Singapore recently, but both these countries as well as India have included each other in the list of CTAs. Explaining the reasons for not including India in the MLI signed by Mauritius, Nangia said that India-Mauritius treaty was recently re-negotiated and Mauritius may want to bilaterally agree the BEPS minimum standards that they want to incorporate in India-Mauritius tax treaty. It could also be that the treaty shopping done via Mauritius route pre-April 2017 might qualify as ‘treaty abuse’ under the terms of MLI. He added that changes to the tax treaty bilaterally can be a time consuming processes as amendment in the erstwhile India-Mauritius Treaty took decades.

Source: Financial Express

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Global Crude oil price of Indian Basket was US$ 47.59 per bbl on 06.07.2017

The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 47.59 per barrel (bbl) on 06.07.2017. This was lower than the price of US$ 48.16 per bbl on previous publishing day of 05.07.2017. In rupee terms, the price of Indian Basket decreased to Rs. 3082.52 per bbl on 06.07.2017 as compared to Rs. 3117.04 per bbl on 05.07.2017. Rupee closed weaker at Rs. 64.78 per US$ on 06.07.2017 as compared to Rs. 64.72 per US$ on 05.07.2017. The table below gives details in this regard:

 Particulars    

Unit

Price on July 06, 2017 Previous trading day i.e. 05.07.2017)                              

Crude Oil (Indian Basket)

($/bbl)

              47.59               (48.16)

(Rs/bbl)

            3082.52           (3117.04)

Exchange Rate

(Rs/$)

              64.78                (64.72)

 Source: PIB

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Global Textile Raw Material Price 2017-07-06

Item

Price

Unit

Fluctuation

Date

PSF

1144.86

USD/Ton

0.78%

7/6/2017

VSF

2242.67

USD/Ton

0.33%

7/6/2017

ASF

2176.49

USD/Ton

0%

7/6/2017

Polyester POY

1184.57

USD/Ton

0.37%

7/6/2017

Nylon FDY

2750.02

USD/Ton

0.27%

7/6/2017

40D Spandex

5073.57

USD/Ton

0%

7/6/2017

Polyester DTY

2352.96

USD/Ton

0%

7/6/2017

Nylon POY

1544.13

USD/Ton

0.48%

7/6/2017

Acrylic Top 3D

2867.67

USD/Ton

0%

7/6/2017

Polyester FDY

5764.75

USD/Ton

-1.01%

7/6/2017

Nylon DTY

1411.78

USD/Ton

1.05%

7/6/2017

Viscose Long Filament

2544.14

USD/Ton

0%

7/6/2017

30S Spun Rayon Yarn

2882.38

USD/Ton

0%

7/6/2017

32S Polyester Yarn

1742.66

USD/Ton

0.42%

7/6/2017

45S T/C Yarn

2705.90

USD/Ton

0%

7/6/2017

40S Rayon Yarn

2308.84

USD/Ton

0%

7/6/2017

T/R Yarn 65/35 32S

1852.96

USD/Ton

0%

7/6/2017

45S Polyester Yarn

2279.43

USD/Ton

0%

7/6/2017

T/C Yarn 65/35 32S

3058.85

USD/Ton

0.48%

7/6/2017

10S Denim Fabric

1.37

USD/Meter

0%

7/6/2017

32S Twill Fabric

0.85

USD/Meter

-0.17%

7/6/2017

40S Combed Poplin

1.18

USD/Meter

0%

7/6/2017

30S Rayon Fabric

0.66

USD/Meter

0.22%

7/6/2017

45S T/C Fabric

0.68

USD/Meter

0%

7/6/2017

Source : Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14706 USD dtd. 06/07/2017) The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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U.S. trade deficit narrows as exports hit two-year high

The U.S. trade deficit fell in May as exports increased to their highest level in just over two years, but trade could still weigh on economic growth in the second quarter. The Commerce Department said on Thursday the trade gap decreased 2.3 percent to $46.5 billion. April's trade deficit was unrevised at $47.6 billion. Economists polled by Reuters had forecast the trade gap falling to $46.2 billion in May. When adjusted for inflation, the trade deficit narrowed to $62.8 billion from $63.8 billion in April. Real goods exports surged to an all-time high in May, propelled by record high petroleum exports. Still, the real trade deficit averaged $63.3 billion in April and May, above the first quarter's average of $62.2 billion. That suggests trade will be a drag on gross domestic product in the second quarter after contributing 0.23 percentage point to the economy's 1.4 percent annualized growth pace in the first three months of the year. The Atlanta Federal Reserve is forecasting GDP rising at a 3.0 percent rate in the second quarter. In May, exports of goods and services rose 0.4 percent to $192.0 billion, the highest level since April 2015, lifted by a surge in exports of consumer goods such as cell phones and other household goods. There were also increases in exports of motor vehicles and parts. Food exports, however, fell by $0.7 billion amid a $0.6 billion drop in soybean shipments. Exports to China increased 3.6 percent. The value of goods shipped to Mexico and Canada rose 5.4 percent and 9.6 percent, respectively.

Exports to Germany gained 7.4 percent.

Imports of goods and services dipped 0.1 percent to $238.5 billion in May. Cell phone and other household goods imports fell $0.9 billion, accounting for the bulk of the $1.5 billion decrease in consumer goods imports. There were also declines in imports of motor vehicles and parts. However, imports of capital goods increase $1.3 billion. The country imported 265 million barrels of oil in May, the most since August 2012. Imports of goods from China increased 11.6 percent. The politically sensitive U.S.-China trade deficit increased 14.4 percent to $31.6 billion in May.

Source: Financial Express

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Ethiopia: Textile Paving Path to Industrialization

Ethiopian textile sector is attracting top international firms amid nation's bid to industrialize. The incumbent believes, textile would benefit large number of people and paves the way for nation to join middle income status in the very near future. Textile is a preferable gateway for developing countries in their quest to step into industrialization because of the ease in entry. The industry was apparently one of the few key drivers of the industrial revolution in Britain and Germany. The textile industries in these countires not only were the driving forces behind the Industrial Revolution, but also revolutionized the world economy in the 18th century. The country has launched a strategy to make the most of its potential in the textile sector. On top of the industry's innate behavior of marketability that would suffice to ensure speedy growth, electric power abundance and a growing human and material capital are seen as advantages to reinforce textile industry in Ethiopia, Bantihun Gesese, Corporate Communications Director at Textile Industry Development Institute told The Ethiopian Herald. Accordingly, the industry is witnessing rapid growth, as a number of domestic and multinational firms are being engaged in productions of textile, garments and apparel for domestic and global markets, added Bantihun. The sector would facilitate technology transfer and capacity development through training, and experience sharing. It is also considered as a springboard to boost the manufacturing sector and export trade. In the path to industrialize Ethiopia, the textile is considered to be prominent in boosting export, creating job opportunities, and accruing great deal of knowledge and experience as a model to other sectors as well, Industrial Parks Corporation CEO Sisay Gemechu stated during a press briefing for launching Hawassa Industrial Park. For instance, he added, Africa's largest industrial park set up in Hawassa, which is exclusively reserved for textile and apparel manufacturing is expected to remarkably boost hard currency earnings and employment. This flagship industrial park is designed to make it capable of hosting gigantic multinational firms. The experiences gained from its operation would be used as baseline for the nation's ongoing industrial efforts, asserted Sisay. The Hawassa industrial park is a testimony that textile has been given due attention by the government. "The other impressive matter in this industrial park is the zero-liquid-discharge policy employed in line with the nation's Climate Resilient Green Economy strategy. The state-of-the-art waste treatment plant, which is the first of its kind in Africa, is installed in the textile industries at Hawassa and will be expanded to other industrial zones too", according to Sisay. At the moment a number of other industrial parks are nearing completion, and the successes gained in the textile industry in terms of attracting anchor investors would be important for other manufacturing industries as well, not only in reinforcing nation's industrialization but also ensuring climate resilience. For Ethiopian Investment Commission Commissioner Fitsum Arega penetrating into the "insanely competitive" global market requires the availability of strong domestic and international manufacturers. "Hence, to successfully make our way to the international market, it is crucial to attract multinational companies. Especially companies that have established their profile in the global market are vital, as the move marked a special status for the country creating wonder among the business community" underscored Fitsum. With the favorable conditions created at Hawassa for textile and apparel production about 18 high profile companies have entered the hub, and six has already begun exporting. The rest are also gearing up to kick off either production or export. The other striking thing in this industrial park, according to Fitsum is the integration of the products in a complementary manner. For instance, there are companies like PVH that manufacture readymade apparels and its firms get their textile inputs from a gigantic Chinese textile manufacturer in the same premises. As these companies are providing training to their newly recruited staff at different levels inside the country and abroad, a huge deal of knowledge and experience could be drawn from the operation that eventually guarantees an accumulated know-how for the infant industrialization. In support of Ethiopia's ongoing industrialization, German Development Agency, GIZ has launched a program that focuses on safeguarding better and fair conditions for industrial parks' employees while at the same time introducing new and forward looking perspectives for nation's industrialization process, GIZ Country Director Matthias Rompel told The Ethiopian Herald. "The program will launch a number of capacity building training for workers in the textile industry mainly in industrial parks as well as the host communities where the projects reside, creating awareness regarding environmental and social protections", said Rompel, ensuring GIZ's commitment to strive in sustaining nation's industrialization efforts through technical support. The contribution of the manufacturing sector to the economy has been lagging behind, barely creating job opportunities contrary to its potential in overhauling the agricultural sector, said Arkebe Oqubay, speaking at the same press briefing. This, according to him, highlights the importance of focusing on transforming the manufacturing sector. "Maintaining the economic growth that has been attested requires structural change on key areas of the economy in a way it secures value addition, boost export and create adequate jobs", said Arkebe. Arkebe added, letting the sector of textile lead the way to the much needed industrialization is the best way as the sector is labor intensive with excellent market value products and ample raw materials in the country. With about 194 medium and high level textile and apparel manufacturers gone operational so far in the country, the sector has created job opportunities to nearly 90,000 citizens and secured hard currency revenue of 81 million USD in the last eleven months only.

Source: allAfrica.com

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Pakistan : Cotton yarn worth US$ 1.134 billion exported in 11 months

ISLAMABAD: Cotton yarn worth US$ 1.134 billion exported during 11 months of last financial year (2016-17) as compared the exports of the corresponding period of last year. During the period from July-May, 2016-17, about 413,749 metric tons of cotton yarn worth US$ 1.134 billion exported as compared the exports of 392,302 metric tons valuing US$ 1.176 billion of same period last year, said data of Pakistan Bureau of Statistics. The exports of cotton yarn during the period under review decreased by 3.64 percent as against the exports of the same period of last year. However, the exports of cotton carded or combe recorded increase of 71.94 percent and reached at US$ 239,000 as compared the exports of US$ US$ 14,000 of same period of last year. In last eleven months, 237 metric tons of cotton carded or combed exported from the country as against the 143 metric tons of same period last year. During the period from July-May, 2016-17, about 23,451 metric tons of raw cotton worth US$ 40.169 million were exported as compared the exports of 48,961 metric tons valuing US$ 75.996 million of same period of last year. Meanwhile, bed wear exports from the country grew by 3.22 percent and reached at US$ 1.922 billion as compared the exports of US$ 1.86 billion of same period of last year. In last eleven months of financial year 2016-17, about 318,070 metric tons of bed wear exported as compared the exports of 303,054 metric tons of same period of last year. However, textile group exports from the country during last eleven months of financial year 2016-17 had recorded 1.98 percent negative growth and were recorded at US$ 11.234 billion as compared the exports of US$ 11.46 billion of same period last year.

Source:  Business Recorder

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ICAC projects cotton area to grow by 8 percent in FY17

LAHORE: International Cotton Advisory Committee (ICAC) on Thursday projected that cotton area in Pakistan will grow by eight percent to 2.7 million hectares this year. Production could reach two million tons, up by 11 percent from 2016-17. The ICAC in its monthly review of cotton scenario further stated that an early and adequate monsoon, a higher minimum support price, and the prospect of better returns from cotton compared to competing crops have encouraged farmers in India also to expand area by eight percent to 11.3 million hectares. Cotton area in China is expected to expand by three percent to 3.2 million hectares due to high cotton prices and the new subsidy announced during the planting season. Assuming an average yield of 1,558 kg/ha, production could increase to five million tons. Production in the United States is forecast to increase by 12 percent to 4.2 million tons, which is the largest volume since 2007-08. High prices, sufficient soil moisture in dry land areas and beneficial weather during planting is driving the increase in area and production. World cotton production is expected to grow for the second consecutive season by seven percent to 24.6 million tons in 2017-18. World cotton area is projected to expand by seven percent to 31.8 million hectares, which remains below the average of 32.3 million hectares of the previous ten years despite prices above their long-term average.

India will likely be the world’s largest producer for the third consecutive season with production growing by six percent to 6.1 million tons. World cotton consumption is expected to increase by two percent to 24.7 million tons based on expectations of growth in the global economy. China leads as the world’s largest consumer of cotton, though its mill use remains unchanged from 2016-17 at 7.7 million tons. High domestic and international cotton prices and constrained supply are likely to limit any growth. After a three percent decline last season, India’s consumption is forecast to recover by three percent to 5.3 million tons. Pakistan’s consumption is expected to increase by three percent to 2.3 million tons. Mill use in Bangladesh and Vietnam is projected to rise by five percent to 1.5 million tons and seven percent to 1.3 million tons, respectively. According to ICAC, the United States will continue as the world’s largest exporter of cotton in 2017-18 despite a projected seven percent reduction in exports to 2.9 million tons. This is due largely to the fact that there will be a much larger supply of cotton from other countries on the global market compared to 2016-17. As a result, its share of world exports is expected to fall from 50 percent in 2016-17 to 37 percent in 2017-18. Exports from India are projected to rise by two percent to 930,000 tons. While imports in China will likely be limited by quota, they are projected to increase by one percent to 1.1 million tons. Imports by Bangladesh are expected to increase by seven percent to 1.5 million tons and Vietnam by eight percent to 1.3 million tons. World ending stocks are forecast to decline by one percent to 17.1 million tons in 2017-18. China’s stocks are expected to decline by 18 percent to 7.6 million tons, and its share of world stocks is expected to decline to 44 percent, which would be the first time since 2011/12 that it held less than half of global stocks. Stocks held outside of China are expected to rise by 17 percent to 9.6 million tons. This would be one of the highest volumes on record and indicates that prices should fall.

Source: The News International

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Lectra Introduces Fashion PLM 4.0 at Industry 4/0 Event

French equipment and software maker Lectra recently introduced its latest product lifecycle management software at an industry event at the Paris-based company’s technology center in Bordeaux. More than 100 industry professionals, including representatives from brands and manufacturers such as Swedish fast-fashion house H&M and Shanghai-based Dayang Group, gathered at the two-day conference to examine “how Industry 4.0 is shaping and transforming the global fashion and apparel business.” Industry 4.0 is a manufacturing concept that encompasses automation and data exchange. Some call it the “smart factory.” Lectra referred to it as the “fourth industrial revolution.” Industry 4.0 includes the Internet of things (including Internet-enabled devices and equipment) as well as cloud computing and cyber-physical systems that allow equipment and humans to communicate and cooperate in real time. “Industry 4.0 is not only revolutionizing how manufacturers operate but also how brands and retailers need to function,” said Lectra Chief Sales Officer Edouard Macquin. “Lectra’s goal is to provide its customers with the technology and support they need to thrive and succeed in this new digital marketplace.” Workshop and presentation topics at Lectra’s event included innovative new retail models and the advantages of a digitalized supply chain. The technology company also introduced its Lectra Fashion PLM 4.0, a modular PLM solution that “acts as a connected, intelligent nerve center for today’s digital supply chain.” The solution allows users from across the supply chain—from development to design to production—to work together in a system that can be adapted to different business models and allows companies “to jump on trends quickly.” “What interests us as a vertical manufacturer is connecting our physical supply chain with our virtual supply chain—our software, ERP [enterprise resource planning],” said Fred Walck, director, project management, for Mexico-based clothing supplier Grupo Kaltex. “For us, Lectra offers the most comprehensive solution: an end-to-end system designed specifically for fashion and apparel.” Lectra provides solutions designed for industries using fabrics, leather, technical textiles, and composite materials to manufacture its products. The company has more than 1,500 employees and customers in more than 100 countries.

Source:  Apparel News

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