Government mulls new duty on imports

Source: The Economic Times, Dec 16, 2019

NEW DELHI: Ahead of the Budget, the commerce department has asked the finance ministry to levy border adjustment tax (BAT) on imported goods to offset the impact of levies such as electricity duty, clean energy cess, levies on fuel and royalty that are not part of goods and services tax (GST).

“Such taxes (which are not part of GST), while resulting in an increase in the cost of production of domestic goods, also place them on an unequal footing vis-a-vis imports rendering our exports uncompetitive,” commerce secretary Anup Wadhawan has proposed to the revenue department.

An estimate suggested that coking coal, which faces clean energy cess, constituted 40% of the raw material cost producing steel, officials told TOI. An analysis shared by a steel manufacturer with the commerce department has estimated that the share of non-creditable taxes in the sale price of hot-rolled coil may be as much as 5% of the sale value, while in case of imports it could be around 3% of the price.

The commerce secretary has sought an urgent status report to brief commerce and industry minister Piyush Goyal on the proposal. Since taking charge six months ago, Goyal has been seeking a series of steps to discourage imports, especially of “nonessential” items, to boost local manufacturing.

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After dropping out of RCEP, India eyes trade deals with ASEAN countries

Source: Business Standard, Dec 11, 2019

India is reviewing trade and goods agreements with its Southeast Asian neighbors to boost exports after opting out of a China-backed trade pact.

New Delhi is working to strengthen trade deals with the ASEAN group, as well as South Korea and Japan, Commerce Minister Piyush Goyal, told lawmakers in Parliament on Tuesday. “The government priority is also to correct the asymmetry in the existing agreements and maximize its export potential to benefit domestic industry and farmers,” he said. The administration of Prime Minister Narendra Modi withdrew from the Regional Comprehensive Economic Partnership in November, citing the deal’s potential impact on the livelihoods of its farmers and job creation. China said that the other 15 countries decided to move ahead with the pact and New Delhi was welcome to join RCEP whenever it was ready. Japan has said it won’t sign the trade pact without India.“Modi government is also trying to mitigate some of the damage that was done to India’s reputation with global investors and the economic costs of being outside RCEP by intensifying rhetoric on pursuing new or revamped bilateral trade deals,” said Akhil Bery and Peter Mumford, analysts at risk consultancy Eurasia Group, in a statement on Monday. “The government is particularly eager to move ahead with trade negotiations with the U.S., European Union and Australia, while also looking to upgrade its existing FTAs with ASEAN and South Korea. ”As was the case in RCEP negotiations, there will also likely be reticence on the part of its counterparts to acquiesce to Indian demands for much greater liberalization of services markets and relaxation of immigration restrictions on skilled labor,” they said.

Govt eases input tax refunds for exporters

Source: The Economic Times, Nov 20, 2019

NEW DELHI: In a major relief for the export sector, the customs authority has directed tax officials not to insist on proof of realisation of exports proceeds for processing of input tax refunds.

Delay in issuance of refunds has been a sore point for exporters since the switchover to goods and services tax (GST) regime in July 2017.

The new directive from the Central Board of Indirect Taxes and Customs (CBIC) follows assurance from finance minister Nirmala Sitharaman to the industry on easing of compliances.

The circular makes it clear that tax authorities will not insist on proof of realisation of export proceeds for processing of refund claims related to export of goods as it has not been envisaged in the law.

CBIC emphasised that exports have been zero rated under the Integrated Goods and Services Act. Hence, as long as goods have actually been exported, even after a period of three months, tax officials should not insist on payment of Integrated tax first and claiming refund at a subsequent date.

There have been reports that exporters were being asked to pay integrated tax in cases where the goods were exported more than three months after the date of the issue of the invoice for export.
Tax experts said the circular has come at an opportune time. “The circular has provided some key relaxations,” said Harpreet Singh, partner at KPMG. Tax authorities will no longer insist on proof of realisation of proceeds, or on payment of tax before refunds are initiated when the export is delayed, he said. Also, there won’t be any adverse action in case the order of debit on claiming refund is not followed, Singh said.

Oman provides India strategic depth in West Asia and Eastern African region

Source: The Economic Times, Nov 17, 2019

NEW DELHI: India is increasing its presence with significant interest in Oman by creating a footprint in the Gulf Cooperation Council and Eastern Africa and this has given Delhi strategic depth in the region.

“Oman’s Sea ports and Industrial hubs established along its 1700 kilometers of its sea coast on the Indian Ocean makes it one of the most ideal area for international businesses to make a home. The Sultanate of Oman offers 4 sea ports and an equal number of industrial free zones all facing the Indian Ocean and Indian private and public sectors are increasingly increasing their footfall in the country,” Oman’s Ambassador to India Sheikh Hamad Bin Saif Al Rawahi told ET.

Prime Minister Narinder Modi’s visit to the Sultanate of Oman in 2018 initiated a new energy in bilateral relations with enhanced cooperation in trade and investment, energy, defence, security, food security and regional issues, according to Al Rawahi.

“The Industrial Zones at Oman’s Duqm offer 30 years corporate tax exemption, 0% customs duty, 100% foreign ownership, usufruct agreements, 50 years renewable , no restrictions on repatriation of profits , no income tax, currency exchange freedom and a stable currency rate. These Sea Ports are supported with airports and warehousing facilities for the benefit of the entrepreneurs,” the Ambassador said as his country celebrates 49th National Day anniversary on Monday.

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Smartphone shipments in July-September

Source: Financial Express, Nov 12, 2019

New Delhi: The domestic smartphone market registered one of its best performances 20191113-6during third quarter of calendar year 2019, carrying a shipment size of almost 47 million units with handsets in the Rs. 21,000-35,500 range emerging as the fastest growing segment.

Attractive schemes and discounts aided the mid-range segment (Rs. 14,000-35,000) during the quarter to increase its share at the expense of the low-end price category.

As per the latest numbers by IDC, the smartphone market shipped a record 46.6 million units in the Q3 2019, with 26.5% quarter-on-quarter growth and 9.3% year-on-year, driven by multiple online sales festivals, new model launches, and price corrections on a few key models by various brands.

“While the low-end price segment of $200 (Rs. 14,000) still accounted for 80% of overall India smartphone market in Q3 2019, its share dropped 5 percentage points year-on-year at the cost of the mid-range segment of $200-500, gaining 5 percentage points to 18.9%,” IDC said.

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APEDA eyes US$ 60 billion agriculture exports with support of new policy

Source: IBEF.org, Nov 11, 2019

20191113-1With the help of the new agriculture export policy, the agri exports from India is likely to reach the export target of US$ 60 billion by the year 2022, said Agricultural and Processed Food Products Export Development Authority (APEDA) a statutory body under Ministry of Commerce. The policy has acted as a bridge between Ministry of Commerce and Ministry of Agriculture helping in to reach the target.

“Achieving an agriculture export target of US$ 60 billion by 2022 does not look ambitious, given the current global market conditions. More so, because India’s export basket largely comprises meat, marine products, and basmati rice whose demand in the world market is on constant increase,” said Mr. Tarun Bajaj, GM, APEDA.

“With an integrated approach and better cooperation among the two union ministries for boosting agriculture production and trade increase export of organic food products as well as to double Agri-exports to US$ 60 billion by 2022 from current $38 billion” said Mr. Bajaj.

APEDA gives a platform to display India’s quality produce to the global market along with promoting the export of various agricultural commodities. Mr. Bajaj added, “After the announcement of Agri Export Policy (AEP) by the government, all the concerned ministries which includes Ministry of Commerce, Ministry of Agriculture, Ministry of Animal Husbandry, Ministry of Food Processing Industries and other agencies are working in close coordination, they are also focusing on exports. In addition, involving states since they also have an important role in encouraging exports of agriculture products from the region.”

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SEPC for adding more services under export incentive scheme to boost shipments

Source: The Economic Times, Nov 10, 2019

NEW DELHI: Services Export Promotion Council has urged the Commerce Ministry to widen scope of incentive scheme SEIS by bringing more services under it to promote the sector in overseas markets, a senior official has said.

20191111-3The foreign trade policy provides tax incentives under Service Exports from India Scheme (SEIS) to several services sector.

Depending on the nature of services, the government gives duty credit scrips or certificates. The scheme offers reward at 5 per cent or 7 per cent of net foreign exchange earned and covers service providers located in India.

“We have asked the commerce ministry to widen the scope of SEIS by including more services in the list like animation and VFX under audio visual services,” Services Export Promotion Council (SEPC) Director General Sangeeta Godbole has said.

She said the council is working with the Commerce Ministry on the matter.

Currently, nine broad categories of services are there in the list, including professional, communication, construction, educational, environmental, tourism and transport.”In each of these categories, we would like to add more services by broadening the list,” she added.

Incentives to services exporters under the scheme during the 2018-19 stood at Rs 4,262.8 crore with a total of 6,376 number of SEIS scrips issued.

This incentive to exporters to offset infrastructural inefficiencies and associated costs involved to increase services export.

Scrips or certificates provided under the scheme can be used for payment of basic and additional customs duties on goods imported. These are freely transferable. If an exporter is not in a position to use the scrip, they can sold in open market.
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