www.iieminfo.com www.iiem.com

Compiled By Mr Sathish B R

iiem 1953 4th Main 9th Cross New Thippasandra Ban-galore, Karnataka – 560075 (080) 2529-2553 or (080) 48147141 info@iiem.com or ask@iiem.com

iiem | DEC01 | 2017 iiem TM

www.iieminfo.com

www.iiem.com

Compiled By Mr. Sathish B R

EXPORT-IMPORT-NEWS COTTON MILLS GO SLOW ON USING KOCHI PORT FOR TRADE The increased prices for imported cotton seem to have prompted the Southern India Mills’ Association to go slow on its plan to facilitate import and re-export of containerised cotton through the Kochi Port. “Right now the market is not conducive due to high international prices vis-a-vis domestic. It is expected to achieve a price stability in the next 3-4 months and imports will happen at this point of time,” G Radhakrishna, President, Coimbatore Cotton Association, said.Either local prices have to go up to match international prices, or global rates should come down to match Indian prices. We believe that the price balance will be achieved by April-May for the imports to be concentrated,” he told BusinessLine .

The international cotton prices are now at Rs. 42,500 per candy delivered at Indian port, while the domestic price is around Rs. 38,200, he said.However, he added that the association has started bringing cotton to Kochi through coastal container route from Gujarat utilising the facilities at ICTT Vallarpadam. “We are moving some containers to Kochi meant for the spinning mills located in Tirupur,

Coimbatore, Salem, etc., from the western part of the country along with Tuticorin Port that caters to the mills in Southern Tamil Nadu,” he said adding that the first consignment of 50 containers of cotton bales have been brought from Mundra and Pipavav last week and more such shipments are lined up for the coming months.Given the proximity of the Kochi Port to spinning mills in Coimbatore, SIMA and Indian Cotton Federation is toying up with the idea of importing and re-exporting of cotton through Kochi. Besides offering cost advantage, the closing down of Walayar check post after GST will also be an added advantage to them in ensuring faster movement of the raw material to the production units in the region. B/L-1.12.17

COTTON INDUSTRY PLANS STIR AGAINST GST ON DEC 15 (CAI) plans to go on a token strike on December 15 protesting against what they called the strain caused by GST and the reverse charge mechanism, in particular.In a statement on Thursday, the Association said that if the issue is not addressed at the next GST Council meeting, scheduled for December 21, it will go on an indefinite strike from the next

day.The action follows a recent joint meeting of the industry convened by the association, which has about 70 ginners as members. The meeting deliberated on the issue of Reverse Charge Mechanism which makes ginners responsible for the GST to be paid by farmers.This apart, the meeting also discussed the pending refunds from government to exporters since July after the GST roll-out, besides dwelling on the plight of the entire cotton industry.

Manjeet Singh Chawla, President, Madhyanchal Cotton Ginners and Traders Association, said ginners have to bear the GST of farmers as they do not pay the tax while selling cotton and this has led to blockage of ginners’ funds.Requesting the association to take up the matter with the government, he said the reverse charge mechanism on cotton has spoilt the relationship between spinners and ginners.

Omprakash Jain, President, Karnataka Cotton Association, said the ginners will be left with no option but to shut their operations if the issue is not resolved soon.BS Rajpal, President of the Maharashtra Cotton Ginners’ Association, said that RCM has been imposed only on cotton and not on other agriculture commodities which is totally unjust.Manish Daga,

Director, Cotton Association of India, said about 2,700 farmers are switching from cotton to other cash crops. This year, he said, cotton farmers have already suffered huge losses due to climatic conditions and pink bollworm problems. If the RCM continues, the cotton farming will substantially reduce in India and affect the whole textile sector, he added. B/L-2.12.17

JOB-CREATING SECTORS SET TO GET MORE SOPS UNDER EXPORT SCHEME Employment generating sectors such as leather and marine products will get higher sops in the much-awaited review of the Foreign Trade Policy (FTP), likely to be announced next week.“Most of the labour intensive sectors including leather, sports goods, marine products and textiles are likely to get a 2 per cent additional incentive under the Merchandise Export from India Scheme (MEIS),” a government official toldBusinessLine .The Commerce & Industry Ministry recently enhanced the rate of incentives under the MEIS for garments and made-ups to 4 per cent, from 2 per cent, till June 2018 to help exporters struggling with the implementation burden of the new Goods & Services Tax (GST) regime. “Most of the incentives for goods

under the on-going five-year FTP are extended through the MEIS scheme. So in the review of the FTP, the additional sops will be given through the scheme,” the official said.The MEIS is the most popular incentive for exporters, under which identified sectors are given duty exemption scrips that are fixed at a certain percentage of the total value of their exports. The scrips can be used to pay duties on inputs, including customs duties. B/L-4.12.17

MAHARASHTRA MILLS REPORT 56% JUMP IN SUGAR OUTPUT Due to good monsoon rain this year, sugar mills in Maharashtra have reported about 60 per cent increase in sugarcane crushing and a 56 per cent jump in sugar production over last year.Numbers collated by the State government show that sugarcane crushing in Maharashtra has risen to 166.55 lakh tonnes (lt) against previous season’s 104.11 lt. Sugar production increased to 154.99 lakh quintals from 99.11 lakh quintals registered last year.Sources in the State Co-operative Department said that last year due to the poor monsoon, only 138 sugar mills were operating in December. But this year 171 mills are open. This year, however, the sugar recovery factor is marginally lower at 9.31 per cent (9.52 per cent).Among the seven sugar-

producing regions of Maharashtra, Pune tops the list processing 66.10 lt of sugarcane, followed by sugar mills in the Kolhapur region, which processed 38.55 lt of sugarcane. But the sugar recovery rate in Kolhapur is 10.34 per cent — the highest in the State.Sources added that due to drought-like conditions in 2015 and 2016, the area under sugarcane was much lower. This year, higher acreage and good rainfall have boosted sugarcane production. B/L-5.12.17

FBIL ROLLS OUT BENCHMARK RATE FOR THE MONEY MARKET In its endeavour to introduce a new benchmark that will provide a risk-free reference rate for the money market, Financial Benchmarks India (FBIL) on Monday said it has developed the FBIL-Market Repo Overnight Rate (FBIL-MROR), which will be published on each working day beginning December 12, 2017.The Clearing Corporation of India (CCIL) will be the Calculating Agent for FBIL-MROR, FBIL said in a statement.FBIL-MROR will be calculated based on the Basket Repo trades executed on the Basket Repo segment on the Clearcorp Repo Order Matching System (CROMS) Platform of CCIL in the first hour of trading between 9.00 am and 10.00 am.The Basket Repo trades with value of Rs. 5 crore and above will be used for the

calculation of MROR. A minimum of 10 trades, with aggregate traded value of Rs. 1,000 crore, will be the threshold criteria for the computation of MROR.If the threshold criteria are not met, the timeline for computation of the rate will be extended in two instalments of 30 minutes each – 10.00 am to 10.30 am and 10.30 am to 11.00 am. B/L-6.12.17

HIT BY DROPPING RUBBER PRODUCTION, TYRE-MAKERS SEEK EASIER IMPORT NORMS The tyre industry has raised its concern over the deficit in natural rubber, saying “the gap between production and consumption is not showing any signs of bridging”.

Expressing concern over the fresh production data released by Rubber Board for the first half of the current fiscal, Satish Sharma, Chairman, Automotive Tyre Manufacturers Association (ATMA), said the deficit last year was 40 per cent. The gap in the first half of this fiscal remains at the same level.The industry consumes 65-70 per cent of the country’s rubber output. For 2017-18, the Rubber Board had projected the production at 8 lakh tonnes (lt), up 16 per cent over previous year’s 6.9 lt. However, in the first half of 2017-18, the production was only 3.2 lt, growing

5 per cent over the previous period.To achieve the target of 8 lakh tonnes, production needs to grow at 24 per cent in the second half over the year- ago period which, according to ATMA, looks unlikely.The tyre industry is facing acute rubber scarcity even in the ongoing peak season. It has also been paying more for the domestic rubber than for imports. The tyre industry faces a serious threat of disruption, Sharma added.

According to ATMA, rubber imports attract 25 per cent duty, which is the highest in the world, and adds to the cost. Yet, there is no option but to import.The industry asked for imports on a tariff rate quota (TRQ) basis at ‘nil’ duty to the extent of the gap between domestic production and consumption. It also asked for removal of the restriction of imports only via Chennai and JNPT; this adds to the cost and delays B/L-7.12.17

Now, Canara HSBC Life begins video service for eal-time customer engagementIn a first for the life insurance industry, Canara HSBC Oriental Bank of Commerce Life Insurance Co Ltd has come up with a video service that seeks to improve customer engagement.

“This is part of our engagement strategy where we are using digital. Digital is the future in this country. A big portion of our engagement strategy will be driven through digital,” Shalabh Saxena, Chief Operating Officer, Canara HSBC Oriental Bank of Commerce Life Insurance Co, toldBusinessLine .This video service initiative comes close on the heels of the company tapping into social-media sites – Facebook, Twitter and Linkedin – for customer services.Under the video service, a customer can go to the website of the company and click on the video service icon to directly engage with the company for various service requests, said Saxena. B/L-8.12.17

HARRISONS BREWS A ‘NEW BRAND’ PLAN TO EXPORT SPECIALITY TEAS To leverage the growing export potential of speciality teas, Harrisons Malayalam Ltd (HML), a major tea producer in South India, is going in for a big branding exercise.“We have firmed up plans to build an umbrella brand — Harrisons Heritage — with a logo for speciality teas such as single estate tea, white tea, hybrid and frost tea for our overseas and domestic buyers,” said N Dharmaraj, Whole Time Director and Chief Executive, SBU (A), HML.

The company has registered with Amazon.in for marketing, and the products, with the new tag, will hit the online and physical markets by the middle of next year.Speaking to a group of visiting journalists from Kochi, Dharmaraj said the excess supply over demand will always put price pressure on mass-market teas. It is, therefore, important for South Indian producers to differentiate their products into speciality teas, the demand for which is growing at about six per cent — twice that of general-purpose teas.South India’s tea production is in the range of 220 million kg and exports are at around 85 million kg.Hence, it is important for South India to export about 45 per cent to create a better supply-demand equation internally, he said.Today, the mass market is a challenge, and there is a need to come out with niche products.The South Indian tea industry has been hit by low prices of teas and high cost of production. Increasing exports is critical to shore up the price line of South Indian teas. B/L9.12.17

TRADE NEWS

CENTRE TO REVIEW TRADE

POLICY ON DECEMBER, 5

The Centre is set to announce on

December 5 its mid-term review of

the Foreign Trade Policy (FTP),

with the focus expected to be on

policy measures to boost the

exports of goods and services and

to increase employment generation

and value-addition in the country.

Specifically, the spotlight of the

review is likely to be on Small and

Medium Enterprises (SME) and

labour-intensive segments,

according to official sources. Export

contraction The move comes at a

time when latest trade data show

that goods exports shrank by 1.12%

in October to $23 billion, the

weakest performance since the

6.86% contraction in July 2016, the

last time shipments contracted.

The contraction in October has

been linked by trade officials to the

impact of the Goods and Services

Tax (GST) on exporters. President,

Federation of Indian Export

Organisations had said in a

statement that “the fall was

expected as exporters, particularly

SMEs, were facing liquidity problem

To pay GST for four months in a

row without getting any refund.” He

added that exports should be kept

out of the purview of GST as paying

the tax first and getting refund later

was cumbersome, in turn, affecting

exports. The FTP for the period

2015-2020 had set a target for

India’s exports of goods and

services to touch $900 billion by

2019-20 and that of raising India’s

share in world exports from 2% to

3.5%. Though the midterm review

was to be released prior to July 1, in

line with the introduction of GST, it

was postponed as the government

wanted to take into account the

exporters’ feedback regarding GST.

The Directorate General of Foreign

Trade (DGFT), which is responsible

for FTP implementation, said in a

November 29 office order that the

DGFT headquarters in New Delhi

“will remain functional on

December 2 and 3, 2017, (Saturday

and Sunday) for preparatory work

relating to release of FTP mid-term

review. All the officers/officials of

DGFT Headquarters are directed to

attend office on the above

mentioned days.

No leave of any kind shall be

allowed till the release of FTP on

December 5, 2017.” Earlier this

month, Commerce Minister had said

the FTP review would be released

soon. “One great strategy we have is

to bring economic development,

take our manufacturing to at least

20% of the GDP... In the next few

years time we will have $5 trillion

of GDP, so $1 trillion of that will

come from manufacturing and the

substantial part of that, we are

aiming to get from SMEs,” Mr.

Prabhu said at a conference of

SMEs. The Centre aimed to help

SMEs become a part of global

supply chains by identifying

opportunities.

EXPORTERS FILE OVER 10,000

APPLICATIONS FOR GST

REFUNDS

With over 10,000 applications for

refunds filed by exporters till

November, the GST Network asked

exporters to ensure that the claims

do not exceed the GST paid in that

month. The Central Board of Excise

and Customs (CBEC) had last month

started refunds for exporters of

goods who have paid IGST and have

claimed refund based on shipping

bill by filling up Table 6A. Earlier

this month, it allowed businesses

making zero rated supplies or those

who have paid IGST on exports or

those want to claim input credit to

fill Form RFD-01A. It asked them to

approach chief commissioner of

central tax and the commissioner of

state tax for the claim. “As on

November 30, 5,677 applications

have already been filed by

exporters using RFD-01 and 4,386

applications have been filed by

them using Table-6 A of GSTR-1,”

said a statement by the GST

Network. The Finance Ministry had

last week said that exporters had

claimed refunds of Rs 6,500 crore in

the first four months of the GST roll

out, and had advised them to file

claims in proper form with

matching shipping bills to facilitate

early settlements.

Goods and Services Tax (GST) was

rolled out from July 1. GSTN, the

company handling the technology

backbone of the new indirect tax

regime, said that in order to claim

refund for any month, the exporter

would have to file initial sales

return or GSTR-3B for that month.

“The amount of refund claimed in

Table-6A should not be more than

the amount paid in GSR-3B of that

month,” it said, adding that details

of shipping bills, as filed with

Customs, should be provided in

Table-6A. This would help avoid

delay or rejection of Integrated GST

(IGST) refund demand, GSTN

added. “It is important for the

exporters to fill the refund details

accurately since the computer

system is designed to automatically

grant refunds without involvement

of any officer by matching

information that is furnished on the

GST portal and Customs system,” it

said.

PARLIAMENT PANEL SEEKS GST

RELIEF FOR EXPORTERS

Lawmakers have pitched for fresh

concessions to labour-intensive

exporting sectors such as textiles,

leather, gems and jewellery to

mitigate the compliance burden

incurred in transitioning to the

goods and services tax (GST)

regime that was rolled out on 1 July.

Accordingly, a parliamentary panel

has asked the finance ministry to

allow exporters to use the old

system of refunds through the

socalled duty drawback scheme.

The parliamentary standing

committee on commerce sought the

intervention, claiming that the GST

compliance burden was causing job

losses in labour-intensive export

sectors. Under the duty drawback

scheme in the pre GST era,

exporters could claim rebates on

taxes such as service tax and excise

duty. After GST was introduced, the

government pared the duty

drawback rates as exporters were

supposed to claim refunds after

paying taxes.

A member of the standing

committee, which is currently

studying the impact of the GST on

the country’s exports, said on

condition of anonymity, “Around

80% of the exporters in the labour-

intensive industries are small

exporters.

They don’t want to get into the

process of first paying duties and

then seeking GST refunds. We are

going to recommend to the

government to just provide a

realistic duty drawback to such

exporters to take care of the

embedded taxes they have to pay

under the GST regime.”

“The finance ministry officials have

assured us that they will take up the

issue with the GST Council,” said the

member of the committee cited

above. The report is to be presented

to Parliament during the winter

session beginning 15 December.

GOVERNMENT TO PREPARE

DETAILED RESEARCH REPORT

TO PROMOTE EXPORTS

The commerce ministry would

prepare a detailed report based on

market research to promote

exports to ten geographies

including East Africa and Latin

America, a senior official said. The

issue was discussed during a

meeting between Commerce and

Industry Minister and senior Exim

Bank officials. “What govt is doing is

prepare a complete detail market

research. Exim Bank itself will not

do,” the ministry official said.

The Export-Import Bank of India

(Exim Bank) would do the macro

analysis and specifics will be done

by some expert consultants.

Recently, Commerce Minister made

a case for treating support

measures to promote exports as

investment and not subsidies,

arguing that outbound shipments

contribute in a big way to boosting

growth.

Exports in October had entered the

negative zone again, dropping 1.12

per cent. The fall in shipment has

been attributed to the liquidity

problem being faced by exporters

following the transition to Goods

and Services Tax. The US and the

European Union account for about

25 per cent of the country’s total

merchandise exports. Experts said

huge potential exists in regions like

south east Asia, East Africa and

Latin America and specific plan

would help boost the shipments.

“We should see the size of these

markets, competitors, economic

engagement with them, technical

standards they follow and

accordingly a strategy needs to be

prepared,” Federation of Indian

Export Organisations (FIEO)

Director General & CEO said.

NATHU LA BORDER TRADE

CLOCKS TURNOVER OF RS 3.54

CRORE

The annual border trade through

Nathu La, the frontier post at Sino-

Indian border in Sikkim, ended with

traders of both sides clocking a

turnover of Rs 3.54 crore. The

Indian traders exported oil, ghee,

blankets, copper items, rice, textile

and processed goods among other

items to their counterparts in Tibet

Autonomous Region (TAR) worth

Rs 2,83,91,230 while the import

comprising mostly quilt/blankets

and jackets stood at Rs 70,96,750.

The bilateral trade at Nathu La was

suspended temporarily in July after

a prolonged standoff between the

two neighbours over Doklam issue,

but business had resumed quietly

two weeks ago. Exporters from

Sikkim who had been exporting

goods through the silk route since

2006, said the resumption of trade

after the border standoff came as a

relief to the fraternity.

“Exporters have cleared all our

stocks and settled payments with

the traders of the opposite side

after business resumed for two

weeks at the fag end of the trade

window between May and

November,” it said.

GARMENT EXPORTS GET A LEG-

UP

In a bid to boost exports of

readymade garments and made ups

and employment generation in

these labour-intensive sectors, the

government has enhanced the

incentive rates for them. According

to an official statement, the

Directorate General of Foreign

Trade (DGFT) issued a public notice

on Friday by which rates for

incentives under the Merchandise

Exports from India Scheme (MEIS)

for two sub-sectors of textiles

industry — readymade garments

and made ups — have been

enhanced from 2% to 4% of value

of exports with effect from

November 1, 2017 till June 30,

2018. “The estimated annual

incentives will be Rs. 1,143.15 crore

for 2017-18 and Rs. 685.89 crore

for 2018-19,” it added.

IMPORT OF CHINESE TYRES

DECLINING: ATM

A Demonetisation, the introduction

of Goods and Services Tax (GST)

and the anti-dumping structure

have resulted in a decline in import

of Chinese tyres, the chairman of

Automotive Tyre Manufacturers

Association (ATMA) said. “Now you

can say Chinese imports have

become less than half,” ATMA

chairman told reporters. “During

the demonetisation month

(November 2016), it dropped by

20%. GST, coupled with anti-

dumping duty, it has started to sink

further.” Noting that import of

Chinese tyres had started to

‘decline’, he said, “the imports of

Chinese tyres stood at 1,50,000

units in May 2016. Today, it is

50,000 units and still going down.”

Dealers had become “confident” of

not purchasing Chinese tyres as the

profitability of the imports had also

crashed, he said. Industry growth

To a query on the growth of the tyre

industry, he said: “My guess is that

the industry this year would see a

high single digit (growth) and then

it should be in the double digit (as

turnover).” India signing free trade

agreements would also give

support to the industry. Stating that

India was not producing radial

tyres when the world was looking

for radial tyres a decade ago, he

said, “now we are producing radial

tyres, we are reentering the world

market and the world has taken

note of this.”

GARMENT EXPORTERS EXPECT

15% DIP IN SHIPMENTS THIS

FISCAL

Garment exporters have warned of

over 15% decline in shipments this

fiscal to $14 billion on account of

reduced incentive after the rollout

of the GST. Average duty drawback

pre-GST was 11.5% which is now

2.25%, industry claimed.. Exports of

readymade garments fell 41% in

October and as per exporters,

November will be as bad if not

worse, they said. the impact of GST

became visible from October and

exporters said they are seeing a 7%

on year decline in order books.

They claim 6 million jobs will get

lost in the coming months if the

situation continues. Textile is the

largest employer after agriculture

and pays Rs.26,000 crore in annual

wages.

BANKING/GST

RS. 50,000 CRORE OF EXPORTER’

GST REFUND STUCK

At least Rs.50,000 crore worth of

goods and services tax (GST)

refunds of exporters for four

months are stuck, impacting

working capital and outbound

shipments. Only about Rs. 350 crore

of refunds on account of the

integrated GST have been released

by the government for July, against

Rs.750 crore claimed by exporters.

Besides, input tax credits, which

form a chunk of GST refunds, are

yet to be released. “Refunds are

going on. There was a delay on

account of unavailability of forms

pertaining to refunds on the GST

Network. Then there was no facility

for correction. Now we are

expediting refunds,” said a

government official. According to

the industry, this will reflect in the

November export numbers as

exporters are unable to take further

orders. “Rs.50,000 crore worth of

refunds are stuck at the moment.

Exporters are unable to take further

orders as they do not have liquidity.

It will certainly reflect in the

November export figures,” said DG

& CEO of the Federation of Indian

Export Organisations. The

government, however, claimed the

refund process was on course and

the delay was on account of the GST

Network not coming up with the

refund form on time. The

government also said only Rs. 550

crore (of the Rs.750 crore claimed)

worth of IGST refunds were valid

for July. Exporters said it was a very

difficult situation for them. India’s

merchandise exports declined for

the first time in 14 months in

October as exporters struggled with

working capital constraints due to

delayed refunds under the GST

regime. It widened the trade deficit

to the highest in 35 months. Exports

fell 1.1 per cent in October to $23.1

billion. About 85 per cent of the

refund due is on account of input

tax credit, which is yet to start,

while only 15 per cent is on account

of IGST.

IGST refund claims worth ~200

crore are invalid, according to the

government, on account of

mismatches of shipping bill

numbers and claims pertaining to

drawback. “There are cases of

mismatch of refunds. Only Rs. 550

crore claims are valid for July. If

someone has left out a zero or

something it is not the

department’s fault. Rs. 200 crore

refunds relate to cases that have

availed duty drawback, and hence

not eligible for tax refund,” said the

official. The duty drawback scheme

was extended in the post- GST

regime for three months, up to

September 30, subject to exporters

not taking input tax credit under

GST.

Form 6A of GSTR 1 has been

introduced on the GST portal for

exporters to claim refund of IGST

paid at the time of export. An

exporter would have to fill details of

shipping bill and tax paid in the

relevant month for a claim. Amid

constant complaints of working

capital blockage by the industry, the

GST Council had decided to

expedite refunds for exporters from

October 10. DG & CEO, FIEO said:

“The government has released a

very small amount for July, and that

too the IGST refund. Exporters have

paid tax for four months. And the

IGST refund that has begun is only

for July. The ITC is still not

operational.” The FIEO met

Commerce and Industry Minister

last week, requesting expedited

release of refunds.

GST COLLECTIONS IN OCTOBER

DECLINE TO RS.83,346 CRORE

India’s goods and services tax

collections fell to Rs 83,346 crore in

October, from more than Rs 90,000

crore in each of the first three

months after the new tax regime

was rolled out on July 1. A finance

ministry statement attributed the

lower collections to the release of

state and central GST out of

integrated GST (IGST) paid in the

first three months, reduction in

taxes and payment of GST based on

self-declared tax return. So far, 95.9

lakh taxpayers have registered

under GST, of which 15.1lakh are

composition dealers who are

required to file returns every

quarter.

As many as 50.1lakh returns were

filed for October till November 26,

the statement said. BREAKUP OF

GST States collected Rs 87,238

crore of SGST in July, August,

September and October, it said.

States get a share in the IGST

collection from inter-state trade

when IGST collected is used for

payment.. of SGST. By way of such

share, states received Rs 31,821

crore for August, September and

October, and Rs 13,882 crores far

October. The states are also entitled

to a compensation for loss of

revenue from the rollout of GST. A

compensation amount of Rs 10,806

crore has been released to the

states for July and August 2017 and

Rs 13,695 crore for September and

October. “States’ revenues have

thus been fully protected, taking

base year revenue as 2015- 16 and

providing for a projected revenue

growth rate of 14 per cent ,” the

statement said. This adds up to Rs

1.57 lakh crore for states. The

Centre’s revenue on account of GST

in July, August, September and

October added up to Rs 58,556

crore. In addition to this, the

statement said, Rs 16,233 crore had

been transferred from the IGST

account to CGST for the first three

months and Rs 10,145 crore for

October. “Taxpayers are using the

balance credit available with them

in the previous tax regime,” the

statement said.

LOW REVENUES

The government has offered three

reasons for revenues to be lower in

October.

One, the first-time requirement of

paying IGST on transfer of goods

from one state to another state,

even within the same company.

This meant an additional cash flow

of IGST in the first three months,

but the same was not being utilised

for paying CGST and SGST when the

final transaction of these goods

took place. Two, the overall

incidence of taxes on most of the

commodities had come down under

GST. Three, because GST is now

based on self-declared tax return,

the assesse decided on his own how

much tax liability he had and

claimed input tax credit as per his

own calculations.

FISCAL DEFICIT CROSSES 96% OF

FY 18 TARGET

Fiscal deficit at the end of October

hit 96.1 per cent of the budget

estimate for 2017- 18, mainly due

to lower revenue realisation and a

rise in expenditure. In absolute

terms, the fiscal deficit — the

difference between expenditure

and revenue — was Rs 5.25 lakh

crore during April-October of 2017-

18, according to data of the

Controller General of Accounts.

During the same period of 2016-17,

the deficit stood at 79.3 per cent of

the target. For 2017-18, the

government aims to bring down the

fiscal deficit to 3.2 per cent of GDP.

Last fiscal, it had met the 3.5 per

cent target. The benchmark Sensex

suffered its biggest single-day fall in

a year on account of the growing

fiscal deficit concerns.

The BSE Sensex plummeted over

453 points to close at 33,149.35

points. Finance Minister has said

the government intends to stick to

the fiscal deficit trajectory.

Principal Economist, ICRA, said the

inching up of the fiscal deficit

highlights the lingering concerns

related to the possibility of a fiscal

slippage in the current year. “The

risk of a slippage relative to the

fiscal deficit target for FY2018

stems primarily from the growing

likelihood that tax and non-tax

revenues would undershoot the

budgeted level, whereas concerns

regarding the magnitude of

disinvestment inflows have ebbed,”

she said. Chief Economist, India

Ratings, said the fiscal deficit has

been impacted by below-par

performance of the non-tax

revenue. The decline is due to low

surplus transferred by the RBI.

ECONOMY PRE-BUDGET CONSULTATIONS FROM DECEMBER 5 Finance Minister will hold consultations with sectoral groups from next week, formally kicking off the preparations for Union Budget 2018-19. “The Finance Minister will start holding Pre-Budget Consultation Meetings with different stakeholder groups from December 5,” said an official statement. His first meeting will be with representatives of different

agriculture groups, followed by representatives of trade unions. Industry chambers are expected to meet Revenue Secretary for pre-Budget discussions on December 8. The Union Budget is expected to be presented on February 1 next year. It is likely to be the last full Budget of the NDA government in its current term. Administrative Ministries are also in the midst of pre-Budget discussions with the Finance Ministry over their Revised Estimate for the fiscal and Budget Estimates for 2018-19. The Finance Ministry has sought proposals from trade and industry on any changes that they may require. Significantly, this is also the first Budget after the roll out of the Goods and Services Tax. It is expected to focus largely on customs duty as other central indirect taxes — central excise and service tax have been subsumed in GST and are with the GST Council. PM INVITES GLOBAL ENTREPRENEURS TO MAKE INDIA THEIR BASE FOR THE WORLD Prime Minister Narendra Modi called upon entrepreneurs from across the globe to make India their base for the world. Addressing the inaugural session of the Global Entrepreneurship Summit 2017 PM said, “India has emerged as one of the fastestgrowing economies and a

happening place with immense opportunities in a number of areas. I assure you of government support to ensure your success.” Referring to the recent upgrade by Moody’s rating and India’s improvement by 42 places in the World Bank’s Ease of Doing Business ranking, Mr Modi said: “Our immediate focus is on further simplifying processes and taking up the ranking to 50 in EoDB.” “The reform process is being accelerated, with more than 1,200 laws scrapped. Yet, I am not happy with the pace of reforms and am keen to accelerate them to make India a better place to invest,” Prime Minister said. Highlighting the progress in the renewable energy sector, Mr Modi said, “We are in the process of finalising a comprehensive energy policy.” Ms Ivanka Trump, Advisor to US President Mr Donald Trump, said there is a need to ensure access to capital, networks, mentors and equitable laws for women entrepreneurs. Citing a study, Mr Trump’s daughter stated that there was nearly $300 billion annual credit deficit for women entrepreneurs in the developing world. However, in the last decade, women have made ‘remarkable’ strides in starting new businesses. Globally, between 2014 and 2016, entrepreneurship activity among

women increased by 10 per cent. Fuelling the growth of women-led business will augur well not only for society but for the economy, Ms Trump observed. Telangana Chief Minister said the State has become an attractive investment destination where top five global tech companies — Apple, Google, Microsoft, Amazon and Facebook — have set up their base. Union Minister of External Affairs proposed a vote of thanks to the 1,500 delegates from 150 nations, of whom 54 per cent were women. ADB EXPECTS INDIAN ECONOMY TO RECOVER, GROW AT 7% THIS FISCAL Asian Development Bank expects the Indian economy to pick up in the coming quarters and grow by 7 per cent this fiscal. Though the agency does not estimate quarterly growth, Economist, ADB India Resident Mission, said the leading indicators such as sale of commercial vehicles and indirect tax collections are encouraging. Official data on second quarter GDP growth will be released by the Central Statistics Office on November 30, amidst expectations that the economic activity would have picked up after the impact of demonetisation and roll out of Goods and Services Tax wore out.

The economy grew by a mere 5.7 per cent in the April to June quarter this fiscal. India Ratings said that it estimates GDP growth to improve to 6.5 per cent in the July to September quarter and gross value addition to expand by 6.4 per cent. Morgan Stanley expects real GDP growth to accelerate from 6.4 per cent this year to 7.5 per cent in 2018 and further to 7.7 per cent in 2019. ADB funding Meanwhile, ADB said it would provide loans up to $4 billion on an annual basis, including non-sovereign debt, during 2018-22. As part of the country strategy 2018-22, annual sovereign funding will increase from $2 billion to $3 billion while private sector funding would be doubled to $1 billion, Yokoyama told reporters. {From 6th Page to 20th page news Were taken by FIEO news}

ARTICLES APEDA FACILITATES GREEN CHILLI EXPORT FROM VARANASI TO DUBAI New Delhi, Dec 20 () Agri export body APEDA today organised the first trial shipment of green chillies from Varanasi to Dubai, a move aimed at encouraging entrepreneurs to boost export of fresh vegetables from eastern Uttar Pradesh.

Eastern Uttar Pradesh is one of the potential areas for export of fresh fruits and vegetables, such as green chillies, okra, bitter guard, green peas, brinjal and mango and guava etc. "Despite the potential of fresh produce in Uttar Pradesh, exports are not taking place due to logistic constraints," the Commerce Ministry said in a statement. To address this concern, the Agricultural and Processed Food Exports Development Authority (APEDA) has sensitised exporters to source produce from Uttar Pradesh. "As an outcome of this effort, one exporter has agreed to export green chillies and green peas from Varanasi to Dubai. Necessary tie up with importers has also been facilitated by APEDA," the statement said. With the efforts of APEDA, facilities of custom clearance and phyto-sanitary certificate issuance at Lal Bahadur Shastri International Airport, Varanasi are being set up to facilitate exporters from the region. SpiceJet airline has also come forward to facilitate trade from Varanasi by sending the consignment via Delhi. APEDA organised the first trial shipment export of green chillies etc. by Elite Oceanic Trading Pvt Ltd from Lal Bahadur Shastri International Airport, Varanasi to Dubai.

APEDA an organisation under the Ministry of Commerce & Industry, responsible for promotion and development of export of various agro products. - Timesofindia INDIA’S EXPORTS WILL RIDE GLOBAL MANUFACTURING REVIVAL

India’s merchandise export growth of 30.56% for November 2017, compared with a year ago, looks wonderful until you recollect that November 2016 was the month when demonetisation started. Exports had dipped sharply then, and the very high year-on-year growth for November 2017, therefore, reflects the effect of this low base. It’s also possible that some exports deferred in October 2017 due to goods and services tax (GST) issues

happened in November, which takes off some more of the shine. Chart 1 gives the absolute export figures, which show the level of exports in November 2017 was lower than in September. But that doesn’t mean we should be pessimistic about exports. First, global manufacturing growth is accelerating. The flash Manufacturing Purchasing Managers’ Index (PMI) for December in the US was at an 11-month high; for the euro zone, at a 212-month high; for Japan, it was at a 46-month high. The JP Morgan Global Manufacturing PMI for November 2017 was at an 80-month high. Manufacturing worldwide is on a high. This global manufacturing revival is good news for India’s merchandise exports. Engineering goods exports have done very well in recent months, although part of the reason could be the rise in prices of iron and steel, which are classified as “engineering goods”. Engineering exports were up 43% year-on-year in November, and

they account for almost a quarter of the country’s exports. A word of caution here: one reason why steel exports, for instance, have been high is because domestic demand has not been strong. That is likely to change as the domestic capex cycle turns. Is the strong rupee responsible for the tepid growth in exports? Several economists believe the rupee is overvalued. Prof. Vijay Joshi said in his recent L.K. Jha memorial lecture, “The question arises: Is it wise to have an appreciating real exchange rate, given the need to maintain the competitiveness of exports, especially labour-intensive exports? It is hard to think of any country that has achieved sustained rapid growth without rapid growth in its exports. But India’s exports have been growing slowly. Slow growth of world trade has obviously harmed India’s exports in the present decade, in common with other countries. But India’s share of world exports, which need not be tied to the growth of world trade, has also totally stagnated over the same period. One has to wonder whether the real exchange rate is partly responsible.”

Chart 2 shows the rapid rise in the Reserve Bank of India’s estimates of real effective exchange rate (REER) in recent months. But this is contentious territory—according to the REER computed by the Bank for International Settlements, the Indian rupee is only slightly overvalued, while the Chinese yuan is much more overvalued. Perhaps it’s best to do the hard work of improving export competitiveness rather than rely on quick fixes. Of course, there are also headwinds to export growth. The IMF’s World Economic Outlook (chart 3) estimated that growth in the volume of goods exports from developing Asia in 2018 and 2019 will be slower than in the current year. -Livemint

USEFUL LINKS

https://iieminfo.com/ IIEM was set up in 1994, with its corporate office at Bangalore. The institute has been established with a mission to impart training to entrepreneurs wishing to start export ventures and executives intending to make a career in export management.