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IACC flags points to streamline GST roll-out

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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.

IANS

Business

Mi India’s Republic Day Sale: List of TVs, Smart Bands, and Smartphones available at Huge discounts

Flipkart VIP, Amazon Prime, and Mi VIP Club members will be able to take advantage of this sale from January 19, a day before.

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Amazon Flipkart

Mi India has announced the Republic Day offer. The sale offers huge discount offers on a variety of products including smartphones, smart TVs, and Smart Bands.

Mi India’s Republic Days offer sale will start from 12 noon on January 20, 2021, which will continue till 11.59 PM on the night of January 24, 2021.

This offer can be enjoyed on the e-commerce sites Amazon, Flipkart, and Mi.com. Flipkart VIP, Amazon Prime, and Mi VIP Club members will be able to take advantage of this sale from January 19, a day before.

Mi Smart Band 4

Selling Price – 2,299

Sale price – 1,899

Mi TV Stick

Selling Price – 2,799

Sale price -2,299

Mi Box 4K

Selling Price – 3,499

Sale price – 3,299

Mi LED TV 4A PRO 108 cm (43)

Selling Price – 24,999

Sale Price – 23,999

Mi LED TV 4X 50

Selling Price – 34,999

Sale Price – 33,999

Mi Watch Revolve Midnight Black & Silver

Selling Price – 10,999

Sale price – 8,999

Earphones (TWS) – Mi True Wireless Earphones 2C

Selling Price – 2,499

Sale Price – 1,999

Earphones (TWS) – Mi True Wireless Earphones 2

Selling Price – 3,999

Sale price – 2,499

Mi Beard Trimmer 1C

Selling Price – 999

Sale Price – 799

Mi Smart Water Purifier (RO+UV)

Selling Price – 12,999

Sale price – 9,999

Redmi Earbuds S

Selling Price – 1,799

Sale price – 1,499

Redmi Smart Band

Selling Price – 1,599

Sale price – 1,299

Redmi 9i (4+ 64GB)

Selling Price – 8,299

Sale price – 7,999

Redmi 9 Prime (4+64GB)

Selling Price – 9,999

Sale price – 9,499

Redmi Note 9 (6+128GB)

Selling Price – 14,999

Sale price – 13,999

Redmi Note 9 Pro (4+128GB)

Selling Price – 15,999

Sale price – 13,999

Redmi Note 9 Pro Max (6+64GB)

Selling Price – 16,999

Sale Price – 14,999

Mi LED TV 4A PRO 80 cm (32)

Selling Price – 14,999

Sale Price – 14,499

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Dogfight: Airlines unleash deep discounts to dominate the sky

IndiGo’s Chief Strategy and Revenue Officer Sanjay Kumar said: “Low fares always helps stimulate the demand for the travel period far out and works as a part of airline strategy.”

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Preparing for Landing

New Delhi, Jan 19 : Fare wars induced deep discounting has reappeared in India’s aviation sector, as airlines seek to augment cash reserves, consolidate market share and bring back more capacity.

The first shot in this war of extremely low prices was fired recently with most airlines commencing their sales offers.

The development comes around a year since Covid-19 lockdown devastated the sector.

Industry insiders, however, now believe that the roll-out of anti-Covid-19 vaccination programme will give a boost to air travel.

Besides, some of the travel period offered under these schemes are beyond the current expiry of the fare cap imposed by the Centre.

IndiGo’s Chief Strategy and Revenue Officer Sanjay Kumar said: “Low fares always helps stimulate the demand for the travel period far out and works as a part of airline strategy.”

“These sales stimulate traffic among extremely price sensitive customers and helps airlines meet overall objectives.”

The latest passenger traffic data from the sector regulator DGCA indicate that the growth in passenger volumes is not yet adequate enough for a revival in the airline sector.

The aggregate passenger traffic in December 2020 at 73.27 lakh was still 43.7 per cent lower on a year-on-year basis.

“Lack of adequate demand in the post festive season along with higher available capacity has therefore, led a drop in passenger load factor for some of the airlines in December 2020 on a sequential basis vis-a-vis Nov 2020,” said Suman Chowdhury, Chief Analytical Officer at Acuite Ratings & Research.

“Such a scenario is possibly leading to a deep discounting strategy from airline companies. This involves sale of seats over the next few months through an attractive discount or add ons to ensure higher PLF over the next 1-2 quarters.”

Nevertheless, deep discounts are expected to hurt the already fragile financial condition of the sector.

“It will have an impact on the profitability of airline operations which has already been under losses in the last few quarters. In our opinion, however, passenger demand will witness a significant improvement in the next few months with the tapering of the Covid infection rate as well as the progress on the vaccination,” Chowdhury said.

Apart from ensuring a minimum PLF in the coming months, experts contend that deep discounts will trigger liquidity enhancement for airlines.

“Low airfares this month indicate the expected dip in travel post holiday season in December. Airfares in Jan across key routes have decreased 15-20 per cent MoM,” said Rajnish Kumar, Co-founder & CTO, ixigo.

“Heavy discounts being rolled out by major domestic and international airlines will definitely woo travellers who are planning vacations this year. With government caps ending on March 31, the discounts will attract flyers to plan their trips in advance and accelerate recovery in bookings to pre-Covid levels this year.”

On the other hand, the government has till now permitted the industry players to operate at 80 per cent of their pre-Covid capacity.

The operational capacity deployment level is expected to reach pre-Covid mark by the end of calendar year’s first quarter.

“In the current scenario of impact on demand due to the pandemic, while some aircraft continue to be grounded, the passenger load factors (PLFs) of airlines have also been impacted despite the lower capacity,” said Kinjal Shah, Vice President, ICRA.

“Thus, airlines have to take a calculated call on fares and its impact on demand.”

(Rohit Vaid can be contacted at [email protected])

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Azim Premji and Dr Devi Shetty chosen for PCB awards

Besides them 25 senior journalists have been selected for the ‘Press Club Annual Awards’, a release said.

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Azim Premji Wipro

Bengaluru, Jan 19: The chairman of Wipro Limited Azim Premji and the founder chairman of Narayana Health Dr Devi Prasad Shetty are among those who have been selected for the annual awards given by the Press Club of Bangalore.

Premji has been chosen for ‘Press Club Person of the Year’, while Dr Shetty and actor-Director Sudeep Sanjeev have been selected for the ‘Press Club Special Award.’

Besides them 25 senior journalists have been selected for the ‘Press Club Annual Awards’, a release said.

Chief Minister B S Yediyurappa will facilitate the awardees at a function scheduled for the third week of February, it said.

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