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IACC flags points to streamline GST roll-out




New Delhi, July 17: The Indo-American Chamber of Commerce (IACC) flagged points for the smooth transition of the Goods and Services Tax (GST) into a full-fledged tax structure.

Upon the suggestion list of the IACC is the need to bring alcohol and petroleum products within the ambit of the Central GST, said the apex bilateral Chamber synergizing India-US economic engagement.

This should be done in a calibrated manner since more than 60 per cent of the revenues were mobilised through tax realisations from these goods, IACC’s National Vice President Vasant Subramanyan said.

There is a strong pitch by the states not to give up the taxation of these sectors as the revenues from them constitute a major chunk of their resource mobilisation, the IACC said in a statement.

“A pragmatic approach to counter this will be citizens’ pressure for assigning this right to the Centre,” the statement released on Monday added.

Next in the order of importance, according to the IACC, is pruning up the number of slabs in the GST.

World over, GST or similar clone of a comprehensive indirect tax, would either have one slab or at best two.

In India, in effect, there are five slabs — zero per cent, five per cent, 12 or cent, 18 per cent and 28 per cent — which would make the tax structure complicated and difficult to comply with.

“We have to draw up a roadmap for further pruning the number of rates in a time-bound manner,” IACC’s Finance Committee Chairman S.K. Sarkar said.

“In the given situation, it is prudent to do away with highest slab/s and amalgamate it/them with the next lower slab,” Sarkar said.

The conceptual ambiguity in the GST structure was another important issue that has to be addressed, the Chamber said.

The manufacturing states feel that their interests have been jeopardised under the GST, which is a destination based tax, the IACC noted.

It is important to evolve pragmatic schemes that should address the genuine concerns of manufacturing states in order to shore up their faith in the dispensation, it said.

Small businesses in the manufacturing sector would not have it easy in the GST regime.

Under the excise laws, only manufacturing business with a turnover exceeding Rs 1.50 crore had to pay excise duty.

Under the GST, the turnover limit has been reduced to Rs 20 lakh, increasing the tax burden for many manufacturing Small and Medium Enterprises (SMEs).

Many of the SMEs would find compliance tough and even if they comply with the GST norms, it would be at an additional cost.

Most businesses use accounting software or ERPs for filing tax returns, which have excise, VAT and service tax already incorporated in them.

“The transition to GST will require businesses to change their ERPs either by upgrading the software or by purchasing new GST-compliant software. This will lead to increased costs of buying new software and training employees on how to use it,” Sarkar said.

Another anomaly in the GST structure is in the form of taxing branding packaged edible items if the brand name is registered under the Trade Marks Act. If it is not registered under the act, tax is not levied.

Introduction of the GST is seemingly affecting the textile industry at least in the short run.

It is expected that the tax rate under the GST would be higher than the earlier tax rate for the textile industry. Natural fibres (cotton, wool) which were exempted from tax, would be taxed under the GST.

A significant portion of the textile industry is in the unorganised sector or composition scheme. This creates a gap in the flow of input tax credit since tax credit is not allowed if the registered taxpayers procure the inputs from the unorganised sector.

Also, Composition scheme (turnover up to Rs 75 lakh) for traders, manufacturers and hotels may be done away with since this scheme militates against the GST principle of getting input credit across the supply chain.

In any case, this scheme does not appear to have too many takers, the IACC said.

On the export front, it is important to align two main export promotion schemes in India — the Merchandise Exports from India Scheme (MEIS) and the Services Exports from India Scheme (SEIS) with the GST.

Under these schemes, exporters with a certain amount of turnover are provided with duty credit scrips.

These scrips allow for the exemption of duties paid on the import of raw materials.

Under the duty drawback scheme, the exporters are provided with a refund of the customs and excise duties paid on the imported inputs.

The GST legislation has a provision on a duty drawback for these inputs. This implies a refund of the taxes paid on both imported as well as domestic inputs.

The duty drawback scheme helps those exporters who produce goods that are not being taxed but still have to pay taxes on the inputs used in their manufacture.

Due to a higher rate of tax under the GST, exporters might face a cash crunch due to the blockage of working capital.

“In order to address this issue, the Finance Ministry should evolve schemes to fast track process of refund within a stipulated time of say five days,” Subramanyan said.



Key Indian equity indices open lower




Mumbai, March 20: The key Indian equity indices opened on a negative note on Tuesday.

The wider Nifty50 of the National Stock Exchange (NSE) traded lower by 38.45 points or 0.38 per cent at 10,055.80 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 32,876.48 points, traded at 32,826.94 points (9.25 a.m.) – down 96.18 points or 0.29 per cent — from its previous session’s close.

The Sensex has so far touched a high of 32,876.65 points and a low of 32,810.86 points during the intra-day trade.

The BSE market breadth was bearish with 907 declines and 351 advances.


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Twitter likely to ban cryptocurrency ads, claims Report

“Twitter may also ban all ads for cryptocurrency exchanges, with some limited exceptions, when the policy is launched,” the report claimed.




San Francisco, March 19: After Facebook and Google, now microblog platform Twitter likely to ban cryptocurrency, token sales and Initial Coin Offerings (ICO) related advertisements.

News agency IANs citing a Sky News report on Monday stated the new Twitter policy will be rolled out within in two weeks.

“Twitter may also ban all ads for cryptocurrency exchanges, with some limited exceptions, when the policy is launched,” the report claimed.

Last week, Google announced that it will debar advertisements for cryptocurrencies and other “speculative financial products” across its ad platforms.

The ban on such advertisements will be effective from June.

“We updated several policies to address ads in unregulated or speculative financial products like binary options, cryptocurrency, foreign exchange markets and contracts for difference (or CFDs),” Scott Spencer, Google’s Director of Sustainable Ads, said in a blog post.

“In June 2018, Google will update the financial services policy to restrict the advertisement of contracts for difference, rolling spot forex and financial spread betting,” the search engine giant asserted.

In 2017, Google scrapped more than 3.2 billion ads that violated its advertising policies.

The search also blocked 79 million ads in its network for trying to send people to malware-laden sites and removed 400,000 of these unsafe sites last year.

In January, social media giant Facebook put a ban on all ads promoting cryptocurrencies, including Bitcoin and ICOs.

The new policy prohibits ads that promote financial products and services that are frequently associated with misleading or deceptive promotional practices, Facebook said in a statement.

“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception.

“That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith,” stated Rob Leathern, Product Management Director at Facebook.


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Global cues, fears of political instability dent equity indices




Mumbai, March 19: Negative Asian cues — on the prospect of higher interest rates in the US and global trade wars — pulled the key indices of the Indian equity market lower during the early morning session on Monday.

Apart from global cues, fears of domestic political instability dented investors’ risk-taking appetite. However, value buying had initially pushed the equity indices higher.

According to market observers, heavy selling pressure was witnessed in oil and gas, metals and auto stocks.

At 9.30 a.m., the barometer 30-scrip Sensitive Index (Sensex) of the BSE traded at 33,142.37 points — down 33.63 points, or 0.10 per cent, from its previous close of 33,176 points.

Similarly, the wider Nifty50 of the National Stock Exchange (NSE) edged-lower. It was down by 17.90 points, or 0.18 per cent, to close at 10,177.25 points.


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