MARKET WATCH 18 NOV, 2020

NATIONAL

INTERNATIONAL

 

Centre, states look to tighten GST registration process

The Directorate General of GST Intelligence (DGGI), the investigation unit under GST, has arrested 30 unscrupulous persons dealing with fake invoice and identified 1,282 entities and booked 393 cases so far.

The Centre and states are looking to further tighten the GST registration process and legal measures to deal with the rising cases of fake invoicing.

A meeting of the law committee of the GST Council has been convened on Wednesday to discuss these issues, finance ministry sources said.

The committee, comprising senior central and state tax officers, would also discuss the GST fake invoice frauds, further tightening of the GST registration process and work out other legal measures including necessary law amendment required in the GST Act to curb the menace of fake invoicing, they added.

Also the provisions related to deemed registration under Goods and Services Tax (GST) law may be tightened to prevent the misuse of such provisions by fake dealers and the provisions related to suspension of registration may also be streamlined to make the procedure of suspension and cancellation of registration more efficient and faster, so that such fraud operators can be prevented in time from continuing to pass on fake credit down the chain.

“It is also learnt that data analytics techniques will be used to identify such taxpayers, who are suspected to be indulging in fraudulent activities and a coordinated action is likely to be taken against such elements by suspending their registration, followed by detailed physical and financial verification by field officers to check genuineness of their operations, before they are allowed to reuse their registration,” a source said.

The Directorate General of GST Intelligence (DGGI), the investigation unit under GST, has arrested 30 unscrupulous persons dealing with fake invoice and identified 1,282 entities and booked 393 cases so far.

Goods and services involved were waste and scrap of metals (ferrous metals as well as non-ferrous metals), articles of iron and steel, copper wire, plastic granules, milk products (butter and ghee), electronic goods, leather, textiles, chemicals, software, waste paper, cement, TMT bar, tobacco products, construction services, works contract services, manpower supply services, advertisement and animation services, other employment and labour supply services etc.

The law committee would also consider the impact of the issuances of fake invoices and strict actions/measures required under the GST law to curb these activities and deliberate on measures that are required to plug loopholes in the law which are being exploited by the unscrupulous elements to defraud the exchequer.

Sources said that businesses, whose owners or promoters do not have commensurate financial track record, like filing of income tax returns and payment of income tax to the government, may require detailed physical and financial verification by tax officers, before their companies can be considered for GST registration.

“The Finance Ministry is in the process of plugging these gaps in the GST registration process to ensure that only genuine businesses get a GST registration and those, who have intent to defraud the system, are purged out at the registration stage itself,” one of the sources said.

SOURCE: PTI

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India may have slightly higher tariffs, but advanced nations keep much higher NTBs

The US has put in place as many as 8,453 NTBs, followed by the EU (3,119), China (2,971), South Korea (1,929) and Japan (181), shows a commerce ministry analysis, based on the WTO data (See chart). In contrast, India has imposed only 504 NTBs.

Major developed and developing countries, such as the US, China, South Korea, Japan and those in the EU, have erected huge non-tariff barriers (NTBs) to mask the ferocity of their trade protectionism and discourage “undesirable imports”, even though they claim to maintain a low-tariff regime.

The US has put in place as many as 8,453 NTBs, followed by the EU (3,119), China (2,971), South Korea (1,929) and Japan (181), shows a commerce ministry analysis, based on the WTO data (See chart). In contrast, India has imposed only 504 NTBs.

Although India’s trade-weighted average tariff of 10.3% in 2018 was higher than these countries, it was still well below a third of its bound tariff, or the level it’s permitted by the WTO to impose, government officials argue.

Analysts say most of the non-tariff measures are typically in the form of either technical barriers to trade (TBT) or sanitary and phytosanitary (SPS) measures.

While non-tariff measures are not always aimed at curbing imports (for instance, safety, quality and environmental standards are put in place by all countries for imported products), what have often worried analysts is that they can be abused for trade protectionism, especially in times of frosty political ties between trading partners.

Last December, in an inter-ministerial meeting chaired by commerce and industry minister Piyush Goyal, it was revealed that while most of India’s key partners had built in elevated levels of NTBs, only about 10% of New Delhi’s imported products were subject to various standards; the rest remain unregulated even from basic safety and environment parametres.

Concerned with a surge in inflows of sub-standard products, Goyal had then asked the Bureau Of Indian Standards (BIS) to develop standards for over 4,500 products (HS lines) at the earliest, taking the total number of imported items where quality and other parameters would be in place to 5,000. These items include steel, consumer electronics, heavy machinery, telecom goods, chemicals, pharmaceuticals, paper, rubber articles, glass, industrial machinery, some metal articles, furniture, fertiliser, food and textiles.

This move marked a policy shift in New Delhi from an avowedly pro-liberalisation approach to external trade to a more discretionary one, where barriers could be erected, if required, to ‘non-essential’ and sub-standard imports that could harm the economy, rather than benefit it. New Delhi’s earlier approach was to curb non-essential imports through just a hike in tariffs (it has raised duties on a number of electronic and other products since 2018). Analysts say India seems to have taken a cue now from key markets like the US, the EU, China and South Korea that have effectively employed various non-tariff measures to imports they deem undesirable.

Indian exporters have already pointed out that some of the common NTBs that they are subjected to are stringent rules on product certification, labelling standards and import approval requirements. Customs clearances face delays and often (especially in case of China) factory has to be inspected at the exporter’s expense. Customs value of the same item may vary for duty calculation depending on ports and rules are frequently changed and details are not easily available in English.

India pulled out of the 16-nation Regional Comprehensive Economic Partnership (RCEP) agreement in November last year, as its proposals on safeguard measures to deal with any “irrational spike” in imports, among others, weren’t adequately addressed by potential partners, including China.

SOURCE: The Financial Express

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INTERNATIONAL

Kelheim Fibres joins European sustainability programs

Viscose speciality fibres manufacturer Kelheim Fibres has partnered with the European Technology Platform for the Future of Textiles and Clothing (ETP) in two strategic programs.

The Bavarian firm has signed up to the Bio-Based Fibres and the Circular Economy programs, the aims of which are to bring key players from industry and science together to develop a long-term strategy to actively shape the sustainable realignment of the European textile industry.

According to Kelheim, its membership of the two three-year ETP programmes are in recognition of the fundamental changes inside the textile supply chain, particularly against the backdrop of the increasingly important sustainability debate.

“We have been manufacturing bio-based fibres for almost 85 years – these fibres are made from the renewable material wood and they are fully biodegradable at the end of their product lifecycle," explained Dr. Marina Crnoja-Cosic, head of New Business Development at Kelheim Fibres. "As an alternative to crude-oil based materials, these fibres are becoming increasingly popular in various applications. Part of the reason for this is the fact that we can functionalize our speciality fibres during the production process and give them the exact properties that are required for different end uses. In terms of performance, they can keep up with synthetic materials.

"Kelheim’s sustainability criteria also includes the full life cycle of its products: when a textile, after its use, can become the raw material for new fibres and new products, that is a huge advantage in terms of sustainability. We want the best possible result – bio-based fibres and circular economy are the way to get there.”

The European Technology Platform for the Future of Textiles and Clothing (ETP) is the largest European network for the promotion of textile research and innovation. It brings together over 200 members from industry, research, higher education, clusters, associations and textile-related sectors.

Kelheim Fibres GmbH is the world’s leading producer of viscose speciality fibres and a key supplier of viscose fibres for the tampon industry. About 90,000 tons of viscose fibres are produced every year at Kelheim in South Germany with applications ranging from fashion, hygiene and medical products to nonwovens and speciality papers.

SOURCE: https://www.nonwovensnews.com/

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Ethiopia textile sector to get boost with new agreement between ETIDI and Texcoms Textile Solutions (Singapore)

Ethiopian Textile Industry Development Institute (ETIDI) and Texcoms Textile Solutions (TTS), a Singapore-based consulting firm for the textile industry, signed a strategic agreement recently to upgrade Ethiopia’s textile and apparel manufacturing sector.

It’s worth mentioning here that textile and apparel export of Ethiopia has been on the rise continuously for last 5 years and the country is emerging as a strong player in the global market.

Sensing the same, the Ethiopian Government and the relevant organisations/institutes (such as ETIDI) are offering much needed helping hand to the textile sector of the country.

One of the initiatives has been taken by ETIDI which is working towards establishing a ‘Textile Pilot Plant’ in Ethiopia that will have the entire value chain of textile industry that consists of processes such as spinning, weaving and finishing; and the machinery for these processes will also be installed along with various other machines.

Housing all relative technologies, the new textile plant aims to encourage entrepreneurship; demonstration/training and know-how transfer; research & development; and product development.

According to the agreement, the role of TTS is to support ETIDI in setting up this plant. The extensively experienced TTS team will take up this project to modernise the country’s textile manufacturing by imparting technical knowledge in the operators so that they can run modern machinery with best of efficiency.

The scope of work for TTS covers supplying of machinery, installation, commissioning, training, know-how transfer as well as hand holding till the textile set-up becomes operational.

Source:Apparel Resources

Bangladesh continues dominating denim shipment to USA with 13.59% yearly growth in Sep. ’20

September might have been a dismal month for Bangladeshi apparel shipment to USA, but the country’s denim apparel exports to its largest export destination have grown significantly!

According to an analysis of Apparel Resources, Bangladesh shipped US $ 62.32 million worth of denim garments to USA in September ’20, marking 13.59 per cent growth from September ’19. This shipment value was the highest value from any apparel shipping country to USA in denim segment.

The total denim apparel import value of USA stood at US $ 284.12 million in September ’20 with a Y-o-Y fall of 12.63 per cent and the contribution of Bangladesh to this value was 21.93 per cent.

The country was way ahead of its competitors in the denim segment in September ’20 as Mexico (ranked 2nd, fell by 36.80 per cent), Vietnam (ranked 3rd, grew by 3.39 per cent) and China (ranked 4th, fell by 29.98 per cent) could just clock US $ 42.52 million, US $ 37.20 million and US $ 32.75 million in their respective denim, apparel shipment to USA.

However, Bangladesh fell by 21.39 per cent in September ’20 as compared to August ’20 shipment value when denim apparel export clocked US $ 79.28 million.

As far as January-September ’20 period is concerned, Bangladesh was down by 8.46 per cent on Y-o-Y basis and its denim apparel shipment to USA totalled US $ 333.55 million which is US $ 59.10 million more than the second top shipper – Mexico.

SOURCE: Apparel Resources, BD

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India and Bangladesh decided to strive jointly for a 35% proportion of global textiles and clothing trade in the next five years

At a recent virtual conference, textile ministers, top bureaucrats and stalwart industry from India and Bangladesh decided unanimously that both countries jointly should strive for a 35% proportion of global textiles and clothing trade in the next five years. India’s total exports of textiles and clothes are currently around $39 billion (FY19) and are forecast to cross $82 billion by 2021 before the coronavirus pandemic. Bangladesh ‘s exports were 27.95 billion USD in FY20, on the other hand, compared to the previous fiscal year’s 34.13 billion USD. In the past, the target for 2020-21 for the duration from $50 billion has adjusted and is set at $33.78 billion in terms of the present circumstances.

Both countries export $66.95 billion in textiles and clothing together and have to hit at least $350 billion over the next five years together. With the rate of 5.22, they have to evolve together. Mr. Rubana Huq, chief executive officer of the Bangladesh Association of Manufacturers and Exporters (BGMEA) stresses the joint effort and calls for ‘go rural, go green.’ Though Apparel Export Promotion Council (AEPC) Chair Dr A. Sakthivel proposes a shared exhibition of Indian and Bangladeshi companies where customers can work together and jointly gain a better valuation and more business.

SOURCE: Textile Focus. BD

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IBM & Kaya&Kato develop block chain network for fashion

IBM and Kaya&Kato have developed a block chain network for the fashion industry, with the support of the German Federal Ministry for Economic Development. The network is designed to create transparency about the origin of garments, from the fibre used to the completion of the final product, and to provide knowledge that the clothes are sustainably produced.

The new application of block chain technology to document and trace the supply chain for textiles will allow suppliers of organic cotton and customers of Kaya&Kato alike to identify the origin and where the fabrics were processed as well as gain an understanding into each production and distribution step. The aim is to create transparency and to help develop secured protocol for the traceability of ecological materials. All the permissioned parties involved will be able to access the transaction data recorded in blocks in an unchangeable record on the chain, according to a press release by IBM.

There is increasing demand from consumers to understand the environmental impact of the products they buy. According to a global study conducted this year by the IBM Institute for Business Value in association with the National Retail Federation, 77 per cent of consumers surveyed say that sustainability is important to them, and 57 per cent surveyed said they are willing to change their purchasing habits to help reduce negative impact to the environment.

Within the garment industry, these attitudes are more prevalent among and more important to younger demographics. A recent survey of European consumers by Morning Consult commissioned by IBM found that 75 per cent of respondents said they are concerned about the level of waste in the fashion industry. Furthermore, 64 per cent of respondents said they would be more likely to buy the garment if new technologies could prove sustainability claims.

Many within the fashion industry are working to help address changing consumer attitudes while creating ways to be more transparent about the environmental impact of the materials they use. Blockchain is well-suited to help garment manufacturers and their suppliers work together to create a permanent, immutable record of the origin of all materials used in production to build trust.

“Blockchain technology is a catalyst for collaboration and transparency across industries and within supply chains. Blockchain technology today is being used to help increase visibility and agility in supply chains in industries including automotive manufacturing, mining, electronics production and even the cultivation and distribution of many types of food. By creating shared visibility, the technology helps foster trust among companies and their suppliers, businesses and especially their consumers. We want to set an example within the industry and offer other companies the opportunity to join us in advancing development and helping to create solutions for supply chain,” Christian Schultze-Wolters, director of blockchain, IBM said.

“The advancement of sustainability and digitisation is crucial to our forward-looking approach. This project combines both aspects in an excellent way by promoting supply chain transparency. For Kaya&Kato, there are multiple compelling reasons to initiate the development of a blockchain network and we look forward to implementation and eagerly await the first solutions in cooperation with IBM,” Stefan Rennicke, co-founder and managing director of Kaya&Kato said.

Kaya&Kato is one of the first 27 companies to be certified with the ‘Green Button’ by the German Federal Ministry for Economic Cooperation and Development. The Green Button is the seal for textiles produced in a socially and ecologically sustainable manner. The Green Button is the first state seal to combine requirements for textiles and for the entire company.

Source:Fibre2Fashion News Desk (GK)

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Francesca’s to shut down 140 stores by January 2021

As the year is nearing the end, the struggle to survive continues for retailers across the globe.

The Houston-based clothing retailer Francesca’s is no exception! The fashion retailer has said that it will be shutting down 140 stores by 30 January 2021.

The retailer announced this yesterday (16 November) in a filing with the Securities and Exchange Commission (SEC).

Francesca’s also made it clear that if it fails to raise enough capital to continue its operations and honour its commitments, it will seek reorganisation under bankruptcy protection.

The retailer has been exploring and evaluating different options to better its financial standing like cutting costs, debt refinancing and lease.

Like many other apparel retailers, Francesca’s too had been struggling since last year; however, the pandemic led to forced store closures, which finally dented its capital and inventory structure.

Also, it is imperative to note that most of the 700 stores of the retailer run in malls, and with malls too in a poor state in these tough times, the situation has only worsened for Francesca’s.

What needs to be seen now is if Francesca’s will be seeking reorganisation under bankruptcy protection any time soon.

Source:Apparel Resources

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BRICS Virtual Summit: PM Modi calls for urgent reforms in WTO, IMF and UN

The multilateral system is going through a crisis. Questions are being raised on the credibility and effectiveness of the institutions of global governance. They have not changed appropriately with the times,” Modi said, addressing a virtual summit of the BRICS – the 5-nation grouping comprising Brazil, Russia, India, China and South Africa.

Prime Minister Narendra Modi on Tuesday called for urgent reforms in International Monetary Fund, World Trade Organization and in the United Nations as important steps in strengthening multilateralism. “The multilateral system is going through a crisis. Questions are being raised on the credibility and effectiveness of the institutions of global governance. They have not changed appropriately with the times,” Modi said, addressing a virtual summit of the BRICS – the 5-nation grouping comprising Brazil, Russia, India, China and South Africa.

India will take over as the chair of BRICS after the summit and will host the 13th summit in 2021. “Being a founding nation of the UN, India has always upheld its values of multilateralism,” Modi said, calling for reforms in the UN to ensure its relevance. Modi also said nations supporting terrorism should be “brought to the book”. “Terrorism is the biggest problem facing the world today. We have to ensure that the countries that support and assist the terrorists are also blamed, and this problem is tackled in an organised manner,” Modi said.

Modi referred to the strength of India’s pharma sector to drive home the importance of ‘Aatmanirbhar Bharat’, a self-reliant India which was able to provide medicines to over 150 countries during Covid-lockdown era. “India’s vaccine production and distribution capacity will come to world’s aid during this pandemic,” Modi said, adding that a self-reliant India can play a pivotal role in shaping the post-Covid economic recovery and in the global supply chains.

Inviting investors from BRICS countries to support South Africa’s forthcoming “Third Investor Conference” to showcase the opportunities in the African nation, Ramaphosa also pointed out the trade and investment potential which would open up with the African Continental Free Trade Area (AFCFTA) which will come into operation on 1 January 2021. Brazilian President Jair Bolsonaro also echoed the consensus on reforming of the WTO to expedite global economic recovery.

SOURCE: The Financial Express

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