The government today extended the deadline for filing the annual return in GSTR-9 and GSTR-9C for 2018-19 from 30 September to 31 October 2020. After obtaining due clearances from the Election Commission in view of the Model Code of Conduct, the government has extended the due date for furnishing annual return in GSTR-9 and GSTR-9C, the Central Board of Indirect Taxes (CBIC) said in a tweet. The move is expected to give some relief to large taxpayers amid the implementation of e-invoicing from 1 October 2020. In view of the COVID pandemic, the government has finally acceded to the request of tax filers for extending the timelines for filing the annual return for FY 2018-19 by a month, Rajat Mohan, Senior Partner, AMRG & Associates, told Financial Express Online. This extension is expected to bring respite to millions of taxpayers including large taxpayers who are battling with the implementation of e-invoicing from 1 October 2020, Rajat Mohan added. GSTR-9 is an annual return form that has to be filed by GST registered taxpayers, giving details of purchases, sales, input tax credit, refund claimed or demand created, etc, while GSTR-9C is an audit form that has to be filed annually by taxpayers with a turnover above 2 crores, and it must be certified by a CA. GSTR-9C is a reconciliation statement between the annual returns filed in GSTR-9 and the taxpayer’s audited annual financial statements. “With the extension, both the ITR filing date for audit cases and the annual GST returns will now fall due on the same dates. Taxpayers must start preparing well in time for both to meet the concurrent due dates,” Archit Gupta, Founder and CEO – Clear Tax, told Financial Express Online. Pandemic forced many sectors to change their existing business models as well as strategies to stay afloat in the industry. Instead of this, the SME sector is still working under the pressure of lockdown as well as less generated income. “Filing of GSTR-9 and 9C is a very time-consuming process and at this crucial moment, spending time in GSTR-9 would mean compromising on business recovery. This decision is a big relief to businesses who are struggling with their revenues and GST annual returns, so they can now focus on business development rather than struggling with GST compliance,” Rajesh Gupta, Co-Founder and Director, BUSY Accounting Software, told Financial Express Online. Last month, the Goods and Services Tax Network (GSTN ) had enabled taxpayers to download document wise details, such as Input Tax Credit, of Table 8A of Form GSTR-9, from the portal in excel format. In addition, the excel file also consisted of details from Form GSTR-1/GSTR-5 filed till 31 October of the following year. The new feature was expected to help the taxpayers in reconciling the values appearing in Table 8A of Form GSTR 9, thus making the filing of Form GSTR 9 easier.
Source: Financial Express
The government is opening up the economy for greater participation of the private sector and has been working in different ways to remove entry barriers for new investments, Commerce and Industry Minister Piyush Goyal said on Wednesday.
He said the government has opened up defence manufacturing for the domestic industry in a much bigger way and coal mining for commercial engagement. It has also made a number of changes in single brand retailing to promote new businesses, the minister said adding the other sectors where steps have been taken include civil aviation, agriculture and financial services. “The government is opening up the economy for greater private sector engagement. Railways is also opening up for greater private sector partnerships…Government also has been working in different ways to deregulate, remove entry barriers for new investments,” he said while addressing the Federation of Telangana Chambers of Commerce and Industry. Goyal also said reforms in the agriculture sector will increase the productivity and income of farmers. About railways, he said during September 1-29, 15 per cent more freight was carried as compared to the corresponding period of last year. Yesterday, we moved 33 per cent more freight than we moved on September 29, 2019,” he said.
Source: Financial Express
Union Minister Smriti Irani on Wednesday said various measures are being looked at to address the logistics challenges and reduce the turnaround time for seamless movement of cargo between India and Bangladesh. Irani said leveraging the inland waterway route will also be looked at for seamless movement of cargo between the two neighbours. “We are actively looking at addressing logistics challenges which emanate at our borders to facilitate quicker turnaround time for both the industries in India and Bangladesh,” said the minister at a CII webinar. The issues being faced in the movement of cargo through Petrapole and Benapole ports are also being investigated, she said. Irani said imposition of zero duty on exports of ethnic apparel from India to Bangladesh would help increase trade. “The Indian industry can rejoice if Bangladesh allows retail of ethnic apparel from India at zero duties,” the minister said. Irani stressed that India should focus on increasing yarn and fabric exports to Bangladesh. “Both sides are aware that when we compare our share of imports in Bangladesh with China, while China stands at 54 per cent, we stand at only 17 per cent given the high tariff on Indian textiles and apparel export products,” the textiles minister said. The minister said she was hopeful that the dialogue to be undertaken for coming to a resolution on the proposed MoU by both countries can reflect on these challenges. The Cotton Corporation of India (CCI) which at present is holding surplus stocks of cotton, is working out the modalities for exporting to Bangladesh, which will help serve the requirements of its spinning industry. “I am sure the needs of the spinning industry of Bangladesh can be met by the Cotton Corporation of India,” Irani said. The minister observed that India can also learn from the Bangladesh’s experience with diversified jute products and partner with the country to capture a share in global value chain of silk as well. Textiles Secretary Ravi Capoor stressed on the need for developing regional value chains, with India supplying raw materials and Bangladesh exporting value added goods like fabric and apparel clothing to the world. There was, however, a need for removing the irritants to trade from both sides before this could fructify. “We would request the Bangladesh side to consider removing the duties on our raw materials,” Capoor said. Highlighting the opportunity for India and Bangladesh as immediate neighbours to create a huge supply chain for the entire globe in the apparel and textiles sector, Capoor said both countries together “can aspire to replace China as 35 per cent of the global market supplier”. “Together our vision should be to capture 35 per cent of the global market in the next five years,” he added. Golam Dastagir Gazi, Minister of Textiles and Jute, Bangladesh, emphasised that there is a huge potential for further collaboration between Bangladesh and India in the textile and apparel industry, with opportunities for both countries.
Source: Financial Express
Businesses will have 30 days' time to generate e-invoice for B2B transactions for the month of October, the CBIC said on Wednesday. Under the Goods and Services Tax (GST) law, companies with turnover of over Rs 500 crore will have to generate e-invoice for B2B transactions from October 1. The Central Board of Indirect Taxes and Customs (CBIC) said even after more than nine months of the first notification, some businesses are still not ready. "Accordingly, as a last chance, in the initial phase of implementation of e-invoice, it has been decided that the invoices issued by such taxpayers during October 2020 without following the manner prescribed ....., shall be deemed to be valid and the penalty leviable ...,for such non-adherence to provisions, shall stand waived if the Invoice Reference Number (IRN) for such invoice is obtained from the Invoice Reference Portal (IRP) within 30 days of date of invoice," CBIC said. Giving an example, the CBIC said if a person has issued an invoice dated October 3, 2020 without obtaining IRN but reports the details of such invoice to IRP and obtains the IRN of the invoice on or before November 2, 2020,then penalty would be waived. "It may be noted that no such relaxation would be available for the invoices issued from 1stNovember 2020 and such invoices issued in violation of rule 48(4) of the CGST Rules 2017 would not be valid and all the applicable provisions of CGST Act and Rules would apply for the said violation," the CBIC said. Under e-invoicing, taxpayers have to generate invoices on their internal systems (ERP/accounting/billing software) and then report it online to the IRP. The IRP will validate the information provided in the invoices and return the digitally signed e-Invoices with a unique Invoice Reference Number (IRN) along with a QR code to the taxpayer.
Source: Business Standard
All eyes are now on the second tranche of stimulus measures from the government. Finance Minister Nirmala Sitharaman tells Indivjal Dhasmana & Shyamal Majumdar that the government is willing to spend but is yet to take a call on the timing and quantum. She does not agree with the allegations that the relation between the Centre and states has deteriorated during the second stint of the Narendra Modi government. She also rebuts criticism of the government over farm and FCRA Bills, recently passed by Parliament. While reiterating that the government is against retrospective amendments, she says a call is yet to be taken whether to challenge the Vodafone verdict or not. Edited excerpts:
Whenever there is crisis, India has taken big decisions like during the economic crisis in 1991. Critics say the government has missed the bus this time...
Absolutely not. We could have easily opted for providing some succour and not done anything (after the Covid shock), but we went in for quite a few critical reforms. Prime Minister Narendra Modi stated several times that we shall not let this challenge go away without converting it into an opportunity to undertake systemic reforms. And hasn’t that been reiterated in action? Parliament has passed labour codes, farm Bills, and certain banking sector reforms have happened. Also, the reform-driven assistance to states were announced such as in providing digitised ration cards. By doing this at this time, you’re not losing out on the opportunity.
One of your biggest reforms — farm Bills — is being criticised because there is speculation that the minimum support price (MSP) system will ultimately go away, and small farmers will not get fair prices from big corporate houses?
If that is the plank on which the Opposition is going to the streets to have violent protests, I condemn it. Speculation on MSP is what was giving them enough ammunition to even question what has been passed in Parliament. They should have actually come to the table and said these things during discussions and stakeholder consultations. Even at the time of passing the ordinances, none of these apprehensions came up. The first question that all of us, including several Opposition parties, kept putting in our manifestos was that the farmer is the only producer today who does not have choice on whom to sell, where to sell, and at what prices. We have empowered them in such a way that there is a system through which they can bargain for better prices, and avoid middlemen.
The FCRA Bill passed by Parliament has become quite controversial. Civil society organisations are saying that the government is strangulating it. Even Amnesty International has decided to wind up its operations in India. Do you agree with the criticism over the Bill?
What does this Bill do? It says you are welcome to receive funds, but you have to do just one thing — let the funds that come from abroad, come to State Bank of India, let’s say its branch in Parliament street. We are not expecting you to come to Delhi to open this account. You can digitally transfer the funds. It does one thing that you and the government knows where this money is, and to whom it’s going. Nobody is stopping it. I think some major reports have said that only 50 per cent of the funds received is accounted for and nobody knows where the remaining is going. Does it help India’s national security?Amnesty International is a separate issue. I think they were given permission under FCRA in 2000, but the permit was withdrawn in 2009 when Modi was not the PM. Now you have become a company and showed funds that you received as foreign direct investment. So, there is this questioning and telling them that you cannot do this. There is no witch-hunt here. This government has nothing against civil society... Do you know there are more NGOs than schools in our country? Amnesty has to understand the norms. I am sorry to hear that Amnesty is building a narrative that the government is witch-hunting.
Relations between the Centre and states have strained due to many developments including the possibility of voting in the GST Council over compensation to states. Do you agree?
I don’t know on what basis you say that. Whether it is the pandemic or whether it is any of the major issues, the PM himself has been engaging with the states on a regular basis. Now, if you take the GST-related issues, everything has been laid on the table in the GST Council. Nothing related to the GST is being done outside of the Council. There’s a lot of talk with states. That doesn’t have to be perceived as strained relations between the Centre and the states.
Do you see voting happening in the upcoming GST Council meeting?
I have no idea. I will be talking to them definitely.
The RBI had to postpone its monetary policy committee (MPC) meeting for the first time as the government could not appoint its nominees. Was it not a mess?
Yes, the RBI had to postpone the MPC meeting but there was no mess. We will announce some names. Yes, we couldn’t announce in time. But that’s without any prejudice or malice. There was no intention not to announce it before. We just couldn’t. I’m sure we’ll be announcing soon, hopefully within a couple of days.
Coming to the economy, spending can be revived with fiscal support. But the government has not been able to do so. What is your position on this?
The government has done fiscal support, to whatever extent it can. Of course, people have every right to think whether that was adequate or whether it wasn’t. As regards any further help or stimulus, I’ve kept my options open.
Give us your assessment of the economy during the six months since the lockdown. And, going forward, will it be more difficult due to the uncertainty?
It has been a big challenge. I don’t think in India’s history, post-Independence, there has been a challenge of this scope and scale. Therefore, you can’t compare it with anything before. We are in the midst of it even now, and are still talking about what it could be in the future. The impact on the economy in the first quarter is there for everyone to see. There is no denying that it was an intense impact. And, even as we are talking, at the end of the second quarter there’s still only patchy revival happening and patchy revivals are very difficult to document in terms of measurability. So, we’ll have to see how it goes.
Do you still believe that we are going to see a V-shaped recovery as the finance ministry had said in its latest monthly report?
I am not getting into any of these alphabets.
Many economists and agencies have raised their projections for the rate of gross domestic product contraction in FY21 and most of them pegged it at double digits. Do you agree with them?
We have not yet made any assessments.
The main concern is that the government is just not willing to spend…
I am not sure that is right. Willing to spend is different from when to spend and how much to spend. The government is listening to so many people, listening to literally everyone who’s been contacting and giving us inputs. Of course, we will have to time what we want to do.
Can we expect anything before Diwali?
I may not be able to say it now.
How do you assess the verdict given by the Permanent Court of Arbitration at Hague in favour of Vodafone. Will the government challenge it?
We’ve not taken a call on whether we want to challenge it.
But how do you see the order?
We are studying that verdict. Amending an act and making it retrospective is something that PM Modi and then finance minister (Arun Jaitley) have voiced against since 2014.
How do you respond to criticisms against increased protectionism through Customs duty hikes?
First of all, I would want to dispel this interpretation that atmanirbharta or the duties that we have been bringing in or Customs-based restrictions that are being put in are protectionist in nature. You know the rules of origin are becoming a bit of an issue. You’re being used as a ground for dumping goods, which probably you can produce yourself. We try to impose anti-dumping duty to stop these, but these are getting routed through free-trade agreements. Simple day-to-day items are also now getting flooded into the country. Even agarbattis (incense sticks), Ganesh moortis (idols) are getting flooded into the country. So, can we not stop them? Then, there are units that produce some of the goods, which are raw material for intermediary, but because of predatory pricing or because of better marketing by others, we stopped buying them from domestic units. I assume the standards are comparable. Where these are not comparable, I’m not worried. I’m not going to touch them.
What is the finance ministry’s stand on moratorium on interest on loans given by banks? What will it tell the Supreme Court in the next hearing, and what did the Rajiv Mehrishi Committee say in its report?
The committee was appointed because we wanted to understand the issue very clearly. On the one hand, you have the prudential norms for banks, and on the other, Covid-19 has come in as the unforeseen pandemic. It is affecting very many small borrowers. Everyone was worried how to ask these very borrowers to pay interest and also interest on interest during the lockdown. We’ve gone into the committee’s report. We are at a very high stage of seeing what we can do about that report. That is why we have asked for a bit of time.
Do you think there should be a cut-off below which small borrowers could be ring-fenced from paying interest on interest?
I don’t want to say anything at this stage except that we are very clearly understanding this matter with a sense of sympathy and assessing the ground situation. We will make our position clear in the court.
Banks are saying where we will get money from if there is moratorium on interest. Then, the government will have to provide money…
That is right. This affects the entire core banking business. So, there is a point beyond which we cannot go.
How will the Bilateral Netting of Qualified Financial Contracts Bill passed in Parliament help banks?
Banks are setting aside capital on the basis of gross amount of transaction. But after this Bill is passed, banks will have to keep the capital only on net transactions, making more money available to them for onward lending.
Has the Centre transferred the task of heavy lifting to the RBI?
I don’t agree with it at all. I am glad what I am doing is not seen. What is important now is to address the issues. Whether I am seen as addressing the issues is a different aspect. I would love to be seen as doing it also. But I’m sorry if it’s not seen.
Markets want the finance minister to be seen as well…
What is important is if there is a difference being made on the ground. It may be adequate or it may not be adequate. What RBI does in terms of liquidity management, OMOs, keeping a watch on yields is absolutely its job, and it has to do it. I’m glad it is doing it. And I’m actually grateful that the RBI is not confining itself just to monitoring inflation. But it’s not for me to say that look, as opposed to that I am doing this. We are doing it. And I’m sure you’re watching that.
On reforms announced, the only thing pending is your public enterprise policy. You had said last time when we met that we will do it soon… Six-seven months have passed since then…
I know it has taken unexpectedly long time because every ministry wanted to give their inputs. We did one round, again there was a second round for fine-tuning it. But, I now honestly expect that it should be going to the Cabinet soon. Whether banks will be included in the strategic list will depend on the Cabinet.
The Comptroller and Auditor General of India (CAG) has criticised the Centre for using the compensation cess collections for other purposes?
Not at all. What had happened was the collected money goes to the consolidated fund of India and then comes to the compensation fund and then gets dispersed to states. Once it went there, it wasn’t transferred into the fund. As a result, we had a couple of months of difficulty. And then, after I came, one of the first things I did was to get that out of the consolidated fund and put it into the fund and then be able to distribute it to states. That is why I could clear last year’s compensation when the it was just about Rs 95,000 crore and we had given out Rs 1.6 trillion to the states.
When you announced the Atmanirbhar Bharat package you said the government will generally not resort to export ban on agricultural produce. But you imposed it on onions a few weeks back. It could not bring down the prices. Do you think that export ban on farm produce is a futile policy?
Yes, and no. Yes, because it has proved ineffective. But if you don’t do it, farmers feel we don’t know what is going on – though consumers are probably paying more, we don’t seem to get the reward. Consumers feel if we don’t do it, prices are going to shoot up even further. So, these are the steps taken to address immediately several factors.
At the CII meeting, you said there is merit to review the GST rates on two-wheelers. Will you be taking that proposal to the GST Council?
One of the participants in that meeting said two-wheelers cannot be considered demerit goods to warrant 28 per cent tax. I agreed with that. But, we have to leave it to the wisdom of the Council.
What about the similar demand on cars?
It is also left to the wisdom of the Council. In the previous Council meetings, even when we wanted to correct the inverted duty structure issue, picked up three-four items, they (states) in-principle agreed with us but did not want to correct it at this point of time because in some items it might lead to increase in rates.
CAG also observed the income-tax department is making high-pitched demands after searches that are not sustained at the appeal levels. Is there any mechanism being worked to address this?
I suppose the faceless system is going to address this. The assessee are also providing a pre-filled form. The assesse even at that stage can question it.
What would be your broad message for those hit hard by the coronavirus-induced lockdown and our readers?
I would like to convey the message to your readers that the prime minister himself is directly seized of the situation on the ground. He periodically reviews the situation on the ground and how it is moving forward, taking inputs from economists, business leaders, chambers of commerce. You can rest assured that the economy and economy-related issues are constantly on the prime minister's mind and we as a group are continuously engaging with him to see what interventions to make and when. The motive is very clear -- to make sure that the revival is fair and include everybody. We have always designed and carried out interventions which are equally available to similarly placed people. That will continue to be the guiding principle for us.
What about sectors like restaurants, which are the most affected? They think they are suddenly left with no budget at all. Can we expect a sector-specific package?
I don't know. As I said, we are still working in different ways. All inputs have been taken on board. Let us see how it works out.
How do you assess the performance of banks after mergers?
I am asked questions about the effectiveness of the Insolvency and Bankruptcy Code (IBC). I am asked about the effectiveness of merging banks. IBC has not completed three years. So has the merger. It has not completed even one full year. And that one year after the merger has been trying for all of us. The very same banks which have been merged are out there in the field, exposing their staff to Covid, but reaching out to the customers through their bank correspondents and branches to implement all the schemes that we have announced in the Atmanirbhar Bharat package. Although I broached the matter once, I did not have the heart to ask them about their merger-related matters.
Opposition alleged that the Income Tax (amendment) Bill passed by the Parliament gives income tax relief to PM CARES Fund, but not to CM relief funds. Do you think there is an anomaly in this regard?
In 2013, when the Companies Act was amended, there was a provision that not only the PM National Relief Fund but other funds will also benefit from relief given to the corporate social responsibility (CSR). In February 2014, with just a couple of months to go for Lok Sabha elections, an amendment was brought in the Companies Act which denied CM's Relief fund the CSR relief. Who was the prime minister in 2013? Certainly not Narendra Modi.
Is the National Democratic Alliance (NDA) falling apart? Akali Dal President Sukhbir Badal alleged that no meeting of the group has taken place for a long time. The party has left NDA, Shiv Sena had quit it earlier.
Others are there (in NDA). I don't think there is any weakening of the NDA. There can always be members who feel that there are reasons to leave NDA because of a particular cause. I will not comment on that. The matter of fact is they should remember that even after getting 303 seats in the last Lok Sabha elections, the prime minister did not say that it is a BJP government. He never excluded any one. It was an NDA government in 2014, it is an NDA government in 2019. The prime minister has never undermined or ignored any ally.
How do you see the chances of your alliance in the upcoming assembly elections in Bihar, given the plight of migrants?
I think Bihar is very good for NDA. We will win hands down. The prime minister has always paid attention to the eastern parts of India, be it Bihar, be it Odisha, Jharkhand, the northeast and ensured that they get good attention from the Centre.
Source: Business Standard
COVID-19 pandemic turns into economic crisis rather a health crisis as the world’s best economies experiencing negative GDP growth. India place at second position in coronavirus cases with more than 4.5 million confirmed cases after the US. The growth of an economy generally measured by growth in GDP. Change in growth we can have measured by percentage change in GDP typically over a year. As per to the OECD (Organisation for Economic Co-operation and Development) the world economy could have face the same growth rate as it was in 2009 due to the outbreak of corona virus (COVID 19). Gross Domestic Product (GDP) is the market value of all the final goods and services produced in a country during a given period of time. GDP measures the wellbeing of an economy, on the basis of GDP one can easily predict the status of a country. India’s GDP showing alarming downturn of 23.9% which is all time high in the past 40 years. These estimates are of formal sectors only if we add estimates of informal sector the contraction will be more drastic. To arrest the spread of coronavirus almost all the economies were under strict lockdown which influenced almost every sector and hence GDP. It is not just because of the stringent lockdown only but its roots submerge back in 2016 when government announces the demonetization of 500 and 1000 Rs. notes. The story is not ended here the other step of CGST implementation then came into the scene which destroy all the local market demand and supply badly. These two steps are like Arrowhead in the dark. Demonetization and GST have harsh effect on local market especially unorganized market which contributes almost 90 percent to the total employment of our economy. GST acts as a whammy for the states revenue. After the imposition of GST, states tax revenue has reduced and COVID-19 crisis has further multiplied the state’s financial problems. On account of the ongoing health crisis states government has estimated that there may be a revenue shortfall approximately 30 percent. In 2017, government wooed the states towards the implementation of GST by assuring that the revenue loss would be compensated if the tax revenue collection fell short. Coronavirus pandemic led recession is totally a bolt from the blue. States which are totally under the fiscal distress, have no option other than to borrow. This will further create a massive situation, because the states are already under high debt and if they will go for more borrowing, then the situation becomes trickier. Indian Economy is one of the fastest growing economy in this decade, world’s developed economies looking on us as we provide them best market. But GDP downfall takes us somewhere back to 45 years which is totally unpalatable when we are trying to take our economy towards the 5 trillion economy status. Due to the spread of coronavirus, millions of people lose their jobs, which is directly influenced their demand pattern. After the spread of coronavirus and more than 3 months’ stringent lockdown economy is in a precarious situation. According to McKinsey report, India should grow at 8 percent per annum to provide the employment to its growing population. Indian economy recorded negative growth and have to walk on tightrope, as per to the official data, Indian economy shrank by 23.9 percent in the second quarter of financial year 2020-21 because of the halting of the various economic activities. Consequently, labour sector further shrank.Only the farm sector is showing some relief with 3.4 percent of growth while all other sector namely construction (-50 percent), Manufacturing (-47 percent), mining and quarrying recorded the highest falls. The expenditure incurred in the 2nd quarter of 2020: Gross fixed capital formation decreases by -47.1 percent, inventories fell down by 20.8 percent, export went down by 19.8 percent while the public consumption increase by 16.4 percent as the government announces and implement various relief packages during coronavirus pandemic. Although the revenue and expenditure both shrank but almost all the expenditures are in positive values while on the revenue side we have all negative values. This indicates that India is in a precarious situation. Economy is moving towards the starving situation. Countries like India, which is already home to the largest number of poor people in the world, get into the grip of extreme poverty because of the undefined steps took by the government. Low economic growth rate ultimately effects the unorganized workers more than any one. Unorganized sector or marginalized workers contributes more than 85 percent of total labor force, consequently major source of income for this huge part of population. This part of population already fought with the demonetization and GST and spread of corona virus act as a catalyst. All the new investment and the undergoing production work will stop due to the low demand and lack of sufficient funds with the investors thus, again unemployment and hunger will increase among unorganized workers. Time has come when the government has to take some hard decision about the nation welfare by leaving apart their other agendas. At the time when India needs a friendly environment with all our neighboring economies we are on the verge of war. Indian economy needs more money to make new investment which we can make only by the exports earning because India is not in a position to borrow more as the economy in already under high debt to GDP ratio. Here at this point of time when India is under the triple crisis: health crisis, economic crisis and war crisis government should take following steps. Firstly; there is a need for some export-led-growth policy. More export more foreign currency means more chances to start various developmental programs, which ultimately increases the domestic demand and standard of living. Secondly, government should think about the informal sector. Indian economy is based on unorganized sector especially the small business or we can say the MSMEs (Micro, Small and Medium Enterprises). More than 80 percent earnings in India depends on these small enterprises and other allied economic activities, thus government must implement some relief packages for these enterprises which are under the financial crisis due to demonetization and GST and now stringent lockdown 3, 4. Thirdly, there must be a health care infrastructure review. Government should work on healthcare sector so that in near future we can easily tackle down such health problems.
Source: Business Standard
MUMBAI: India's current account- the combines overseas merchandise and services turnover- ended in a record surplus of $19.8 billion or 3.9 per cent of GDP during the quarter ended June'2020,way above economists expectation as merchandise trade contracted on a massive slump in crude consumption due to the lockdown prompted by the COVID pandemic, and stable services income. The current surplus of $ 19.8 billion was on the back of a decit of $ 15.0 billion at 2.1 per cent of GDP recorded in the same period a year ago or Q1 of 2019-20, according to the preliminary gures released by the Reserve Bank of India. "The surplus in the current account in Q1 of 2020-21 was on account of a sharp contraction in the trade decit to $ 10.0 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis" the central bank said in a release. Net services receipts remained stable, primarily on the back of net earnings from computer services. Private transfers mainly, the remittances sent home by Indians employed overseas, amounted to $ 18.2 billion, a decline of 8.7 per cent from their level a year ago, did much better than expected by the markets. " The current account surplus in Q1 FY2021 was well above our expectations, as the fall in remittances was remarkably muted, despite the adverse economic conditions globally amid the ongoing pandemic" said Aditi Nayyar, choief economist at ratings rm Icra. " With the domestic and global lockdowns to fight Covid-19 exuding a differentiated impact on exports and imports, the merchandise trade deficit shrunk to just $10.0 billion in Q1 FY2021, most of which was accounted for by the net oil balance". A current account surplus at a time when the economy is contracting is not perceived to be a healhty sign as it points to a sharp slowdown in domestic consumption. "The big boost to the current account surplus ratio which is expressed as % of GDP came from the decline in nominal GDP by around 23% in Q1 which lowered the denominator" said Madan Sabnavis, chief economist at Care Ratings. “This combined with a higher numerator led to an impressive 3.9% ratio." The capital account which normally supports the current account was much lower with a surplus of just $ 552 mn against $ 28.6 bn last year. Overall balance of payments ended in an overall surplus of $19.8 billion during the June quarter compared to $14 billion surplus in the same period a year ago. The current account balances, which represent the net of the country's export and imports of goods and services and also payments made to foreign investors or inows from them, are considered as an important indicator of a country's external sector. In a recent report, domestic ratings agency Icra had said that India's current account will swing to a surplus of USD 30 billion in FY21 or 1.2 per cent of GDP on a slowdown in imports during the pandemic, but added that it will be a "temporary" phenomenon. The RBI on Wednesday said net services receipts remained stable at USD 20.5 billion, as against USD 20.1 billion in the year-ago period, primarily on the back of net earnings from computer services. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to USD 18.2 billion which is a decline of 8.7 per cent from their level a year ago, the RBI said. Net outgo from the primary income account, primarily reflecting net overseas investment income payments, increased to USD 7.7 billion from USD 6.3 billion a year ago, it said. In the nancial account, net foreign direct investment recorded outow of USD 0.4 billion as against inows of USD 14.0 billion in Q1 of 2019-20. Net foreign portfolio investment was USD 0.6 billion as compared to USD 4.8 billion in Q1 of 2019-20 as net purchases in the equity market were oset by net sales in the debt segment, it said. With repayments exceeding fresh disbursals, external commercial borrowings to India recorded net outow of USD 1.1 billion in Q1 of 2020-21, as against an inow of USD 6.0 billion a year ago, the RBI said. Net inow on account of non-resident deposits increased to USD 3 billion in the June quarter, as against USD 2.8 billion in Q1 of 2019-20, it said. There was an accretion of USD 19.8 billion to the foreign exchange reserves (on a balance of payments basis) as compared to that of USD 14.0 billion in Q1 of 2019-20, the central bank said.
Source: Economic Times
The Union government’s fiscal deficit remained above the annual target for second month in row at the end of August, mainly on account of the impact of lockdown on revenue collections. According to the data released by the Controller General of Accounts (CGA), fiscal deficit during April-August was at 109.3 per cent of the annual target estimated in the Budget. In absolute terms, the fiscal deficit was at Rs 8,70,347 crore. It stood at 78.7 per cent of Budget Estimates (BE) in the corresponding period during the last fiscal year. Fiscal deficit or the gap between the expenditure and revenue had breached the annual target in July.The government had pegged fiscal deficit for 2020-21 at Rs 7.96 trillion or 3.5 per cent of GDP in the Budget presented by Finance Minister Nirmala Sitharaman in February. These figures, however, may have to be revised significantly in view of the economic disruptions created by the outbreak of coronavirus pandemic. Fiscal deficit had soared to a seven-year high of 4.6 per cent of the Gross Domestic Product (GDP) in 2019-20, mainly on account of poor revenue realisation, which dipped further towards the end of March because of a nationwide lockdown to contain the spread of coronavirus. According to CGA data, the overnment's revenue receipts stood at Rs 3,70,642 crore or 18.3 per cent of BE in April-August. During the same period of the last fiscal, it was at 30.7 per cent of BE. Tax revenue stood at Rs 2,84,495 crore or 17.4 per cent of BE during the first five months of the fiscal. During the corresponding period of the last fiscal, it was at 24.5 per cent of BE. Total receipts of the government stood at 16.8 per cent of BE or Rs 3,77,306 crore. In the Budget, the government had estimated the total receipts for the fiscal at Rs 22.45 trillion. The government's total expenditure stood at Rs 12,47,653 crore or 41 per cent of BE at end-August. During the same period of the last fiscal, total expenditure was at 42.2 per cent of BE.
Source: Business Standard
Finance Minister Nirmala Sitharaman has said that the economic recovery in the second quarter has been “patchy” so far and it is difficult to say with any degree of certainty whether the upswing would hold going forward. Dismissing criticism that the government is unwilling to provide fiscal support to revive demand and consumer spending, Sitharaman said the government has an open mind on the issue and a decision on when to spend and how much to spend will be taken at the appropriate time. In an interview to Business Standard, the minister said the intensity of the problem is unique and the government has been engaging with all stakeholders. However, at this point, no firm assessment has been made on the additional fiscal support. Sitharaman said the government has turned the crisis into an opportunity as directed by the prime minister and has brought in several systemic reforms on labour, agriculture, banking sector, digitises ration cards, power, etc. “We could have easily opted for providing some succour and not do anything, but we went for critical reforms,” she said. On the silence over the report on public sector enterprises announced as part of the Atmanirbhar package, she admitted that the matter has been pending for a long time, but the cabinet will take a view on it shortly. Whether banks will be included in the strategic list will depend on the cabinet. The minister said it is unfair to say that the “heavy lifting” for reviving the economy has been left to the Reserve Bank of India. “I may not be seen as doing the heavy lifting, but what is important is whether my actions are making a real difference on the ground,” she said, adding she is grateful to the RBI for not confining itself to just monitoring inflation. This situation demands out-of-the box solutions and that’s what the central bank is doing. Won’t she also like to be seen doing the heavy lifting? “Everyone has his/her own style”, was her cryptic answer. About Amnesty International’s decision to halt India operations, Sitharaman rejected the accusations of witch-hunt. “They are repeat offenders as the United Progressive Alliance government decided to withdraw their permit in 2009. So why make noise now”? This government, she said, has nothing against civil society as is evident from the fact that there are more NGOs than schools in our country. On the government’s stand on the interest during the moratorium period, she said banks have also been affected by the pandemic. The other side to it is that banks will also go down if the customers go down; so it’s a tricky issue. She declined to say whether the government is proposing an income threshold for getting interest relief.
Source: Business Standard
Four out of five anticipate issues in applicability of the new provisions Around 85 per cent of the responses from a survey of businesses showed they were not completely ready for the new Tax Collected at Source (TCS) regime. The provisions come into effect from October 1. Companies are still putting in place systems and processes, with most of them anticipating issues in the days ahead, according to a survey of over 110 companies conducted by globally tax and consultancy group EY with enterprise application software company SAP India. Four out of five anticipate issues in applicability of the new provisions. They also see challenges related to updating systems and processes for the new regime, according to the survey. Around 81 per cent ‘recognised that reconciling data and ensuring accuracy due to TCS compliances will increase manual intervention for their tax teams,’ said a statement about the survey. The survey was conducted in early September.
Source: Business Standard
"In view of the continuing stress on account of COVID-19, it has been decided to defer the implementation of the last tranche of 0.625 percent of the CCB from September 30, 2020 to April 1, 2021," it said. The Reserve Bank on September 29 deferred the implementation of the capital conservation buffer (CCB) requiring banks to set aside additional reserves of 0.625 percent by a further six months due to the COVID-19 pandemic. The implementation of the regulations was to happen by September 30, and the same has been now deferred to April 1, 2021, the RBI said in a notification. "In view of the continuing stress on account of COVID-19, it has been decided to defer the implementation of the last tranche of 0.625 percent of the CCB from September 30, 2020 to April 1, 2021," it said. Accordingly, the minimum capital conservation ratios shall continue to apply till the CCB attains the level of 2.5 percent on April 1, 2021, the RBI said. The pre-specified trigger for loss absorption through conversion/ write-down of additional tier 1 instruments (perpetual non-convertible preference shares and perpetual debt instruments), shall remain at 5.5 percent of risk weighted assets (RWAs) and will rise to 6.125 percent of RWAs from April 1, 2021, it added. Meanwhile, the central bank also deferred the implementation of Net Stable Funding Ratio (NSFR) guidelines by six months to April 2021 because of the pandemic.
Source: Money Control
Many Indian companies with foreign subsidiaries whose directors or senior executives are stranded in India due to the pandemic are now worried that they may have domestic tax implications under the place of effective management (PoEM) rule. Many Indian companies with foreign subsidiaries whose directors or senior executives are stranded in India due to the pandemic are now worried that they may have domestic ta implications under the place of eective management (PoEM) rule. Under the PoEM regulations, overseas subsidiaries could be treated as domestic entities for tax purposes if they are controlled and managed from India. In most cases, senior executives would travel to other countries where the subsidiaries are located, for some time every year, especially for board meetings. However, amid Covid-19, many executives and directors are now unable to travel - resulting in a situation where tax oicials could construe that the decisions concerning the companies were made in India. As it stands today, the Indian government has not announced any relaxations under PoEM for such cases, tax experts said. “In this ‘exceptional’ Covid scenario, an unintended side effect of the lockdown might trigger PoEM presence of foreign companies when their directors/managers, i.e. the key decision makers, are in India,” said Amit Maheshwari, a partner of CA rm Ashok Maheshwary & Associates. “The IT department can consider these companies as residents in India. While the OECD (Organisation for Economic Cooperation and Development) categorically states that this exceptional period should not be considered while determining PoEM, a relaxation from the CBDT (Central Board of Direct Taes) on the same lines is very necessary to address the same,” Maheshwari added. The government had introduced the PoEM framework in 2018, to tax the income of Indian companies’ foreign subsidiaries. Amid the pandemic, many companies are holding meetings over videoconferencing applications to take decisions. This raises questions over the taxability of their global income. “For many companies, the decision makers are stranded in India for a long time and the fear is that they may have to pay taxes on their global income in India or foreign companies may become resident under PoEM,” said Paras Savla, a partner at tax advisory rm KPB & Associates. The tax applicable on the global income of such companies could be as high as 42%, said tax experts. Worse, most of the companies would have to cough up this amount in the coming months and pay that as advance tax. The problem has occurred for both multinationals as well as individuals. ET had rst written on April 11 that for several rich Indians, who shule between countries to avoid staying in India beyond the stipulated time to pay tax here, Covid-19 has come as a double blow, as they may have to pay tax in India. For several multinationals too this could create problems, as the tax department could look at whether they could be taxed on their entire income in India. Industry trackers said the tax department could trigger PoEM despite a recent directive from the OECD that asks countries to provide relief from regulations due to the Covid-19 situation. Tax experts said while some of the larger companies might not face any problems from it, smaller companies, that do not have an independent board or other things to establish independence, would face issues.
Source: Economic Times
The Vietnam Textile and Apparel Association on September 28 said that up to 70 percent of textile export revenue belongs to foreign direct investment (FDI) enterprises. Accordingly, the export turnover of the garment and textile industry hit US$39 billion last year. It expects that this year, despite being heavily affected by the Covid-19 pandemic, the textile export turnover will still reach around $32 billion. Currently, Vietnam's textile and garment industry ranks at the sixth place in textile exports in the world and ranks second after China among the largest textile exporters in the European market. In the long run, when the domestic garment and textile enterprises can take the initiative in raw materials for production, they will be able to increase their export market share, especially in the European market, where they only account for 2 percent of the market share. Many domestic garment and textile enterprises said that authorities need to attract foreign investment selectively in the garment and textile sector. Accordingly, it is necessary to prioritize investment attraction in the production of raw materials to create conditions for domestic enterprises to complete the garment and textile supply chain and make the most of the advantages of export tariffs. At the same time, it will help domestic garment and textile enterprises to reduce the risk of antagonistic competition with FDI enterprises investing in Vietnam in the export market.
Source: SGP News
Production in clothing industry in Azerbaijan increased by 32 percent during the period of January-August 2020, local media has reported. During the reporting period, production in textile, clothes, leather and footwear industries amounted to AZN 314.6 million. Thus, there was an increased in production of clothing by 32 percent, and in textile industry by 4.7 percent, compared to the same period of 2019. In the meantime, production in leather and footwear industries decreased by 6.3 percent. Moreover, imports of air conditions to Azerbaijan decreased by 30.6 percent and amounted to 123,700 units during the reporting period. The total cost of air conditioners imported to the country amounted to $29.5 million. Likewise, some 361,700 units of computing machines, blocks and installation, which is by 22.8 percent more compared to the same period of 2019, were imported to Azerbaijan during the reporting period. The cost is estimated at $71.5 million. In addition, 91,234 washing machines, with a decrease by 9 percent, worth $17.3 million were imported to the country during the period of January-August 2020. Furthermore, 132,300 tons of plastic and plastic products worth $225.7 million were imported to the country during the first eight months of 2020. It should be noted that 148,900 tons of plastic and plastic products worth $265.5 million were imported to the country during the same period of 2019. Additionally, 3,800 tons of tobacco were produced in Azerbaijan during the period of January-August 2020. It should be noted that all tobacco produced in Azerbaijan is exported. Russia account to be the main exported of Azerbaijani tobacco. The country produced 6,000 tons of tobacco in 2019. Azerbaijan’s foreign trade turnover amounted to $16.5 billion during the period of January-August 2020. The value of export amounted to $9.8 billion or 59.6 percent of the total turnover, while the value of import amounted to $6.6 billion or 40.4 percent. Thus, foreign trade turnover resulted in surplus of $3.1 billion.
Source: Azer News
When Haji Muhammad Abdus Salam looks across the trash-filled river near his home in one of Bangladesh’s major garment manufacturing districts, he remembers a time before the factories moved in. “When I was young there were no garment factories here,” he said. “We used to grow crops and loved to catch different kinds of fish. “The atmosphere was very nice.” The river beside him is now black like an ink stain. Abdus Salam said waste from nearby garment factories and dye houses has polluted the water. “There are no fish now,” he said. “The water is so polluted that our children and grandchildren cannot have the same experience.” Bangladesh is the world’s second biggest garment manufacturing hub after China, exporting billions of dollars worth of garments in 2019. Clothes made, dyed and finished in the country often end up in main street shops across the United States and Europe. But as consumers browse through the season’s latest colour trends, few will spare much thought to the dyes used to create everything from soft pastels to fluorescent hues - or their toxic history. Fashion is responsible for up to one-fifth of industrial water pollution. That’s thanks in part to weak regulation and enforcement in producer countries like Bangladesh, where wastewater is commonly dumped directly into rivers and streams.
Carcinogenic cocktail
The discharge is often a cocktail of carcinogenic chemicals, dyes, salts and heavy metals that not only hurt the environment but pollute essential drinking water sources. One 55 year old, who has lived near Dhaka for the past 18 years and didn’t want to be identified for fear of reprisals, said the polluted waterways were a risk to his family’s health. “The kids get sick if they stay here,” he said. “This water causes sores on the body.” The cheapest way for factories to get rid of unusable, chemical-laden wastewater is to dump it into nearby rivers and lakes. Not all of the chemicals and solvents used are hazardous, though the World Bank has identified 72 toxic ones that stem solely from textile dyeing. Once in waterways, they accumulate to the point where light is prevented from penetrating the surface, reducing plants’ ability to photosynthesize. This lowers oxygen levels in the water, killing aquatic plants and animals.
Health impacts
Also among them are chemicals and heavy metals that can build up in the body, increasing the risk of various cancers, acute illnesses and skin problems. Others have been found to increase in toxicity as they work their way up the food chain. The chemicals used to dye clothes also impact garment workers who, in some factories, don’t have adequate protective clothing and may inhale toxic fumes. Bangladesh’s Ministry of Environment, Forest and Climate Change said it was “striving towards minimizing the negative effect on environment from the largest export generating sectors including ready-made garments and textiles.” Minister Shahab Uddin said in a statement to CNN that a range of measures was being taken to address pollution. They included updating conservation and environmental laws, imposing fines on polluters and monitoring water quality. “Monitoring and enforcement activities ... are playing a vital role in combating the pollution caused by illegal polluting industries,” he said. “We have a policy and legal framework in place to address the environmental pollution issues of the country.”
Source: 7 news
