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Services to have 4-slab GST rates, no decision on gold

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Arun Jaitley

Srinagar, May 19:  In a move which is expected to bring prices down from the current levels, the Goods and Services Tax (GST) Council on Friday decided on a four-slab tax rate for services along with the novel concept of input credit for goods used.

The Council concluded its two-day meeting here with the decision to apply the same four tax rate slabs for services as for goods, exempting, however, healthcare and educational services from the purview of the GST.

However, no consensus could be reached on the rate to apply on gold as well as on beedi, and the Council will meet again on June 3 in New Delhi for a decision in this regard.

Briefing reporters here following the meeting, Union Finance Minister Arun Jaitley said that under GST, services will get the benefit of input tax credit for the goods used, effectively making the real incidence of taxation lower than the headline taxation rate.

He said that while “luxury services” would attract the highest rate of 28 per cent, health and education services would be exempt categories.

Jaitley said there would be a 5 per cent tax on carriage of goods by rail, road and air transport services because their main input is petroleum.

Work contracts currently attract central tax at 6 per cent, while state taxes vary between 1-5 per cent, but no input credit is available for these services, the minister noted.

“Most of the inputs for work contracts… cement, steel are taxed at 28 per cent,” he said.

“The uniform GST will be at 12 per cent while the entire credit inputs will now be available and, thus, the level of taxes will come down below the present level,” he added.

“Those paying service tax will not be able to take benefit of input credit as petroleum not in GST,” he said.

IT, telecom and financial services will be taxed at the rate of 18 per cent.

While five-star hotel services will be taxed at the highest 28 per cent, restaurants with a turnover of Rs 50 lakh and less would be levied at 5 per cent.

“Non-air conditioned restaurants will have 12 per cent, while air-conditioned restaurants will have a service tax of 18 per cent,” Jaitley said.

“Those restaurants located inside 5-star hotels will have same service tax as applicable to the 5-star hotels,” he added.

He also said that entertainment tax will be merged with the service tax at 28 per cent.

Hotels, gambling, race club betting and cinema will all be levied GST at 28 per cent.

“The net effect of GST will not be inflationary. There is a set of exemptions for services… we are grandfathering most of the existing exemptions because we don’t want any adverse impact of taxation in those areas,” Jaitley said.

“Once input credit starts, it will have a positive impact,” he added.

Speaking to reporters after the meeting, Kerala Finance Minister Thomas Isaac said that “not in a single case has there been an increase in taxes from before”.

The Council on Thursday approved the tax rates for 1,211 items, of which 7 per cent will be exempted, 14 per cent will be in the 5 per cent slab, 17 per cent in the 12 per cent category, 43 per cent in the 18 per cent segment, while 19 per cent of goods will go into the top tax bracket of 28 per cent.

Thus an overwhelming 81 per cent of goods will attract tax of 18 per cent or below. Only 19 per cent of items will be taxed at the highest rate of 28 per cent.

(IANS)

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Nearly 4% of GDP is lost due to malnutrition: Report

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Malnutrition
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New Delhi, Jan 21: India loses about 4 per cent of GDP (gross domestic product) to malnutrition and the trend can be reversed by focusing “on production diversity as well as food fortification at a macro level”, a research paper revealed on Sunday.

According to a joint paper published by industry body Assocham and consultancy firm EY, nearly four per cent of the GDP is lost due to different forms of malnutrition and that “women and children deserve a better deal in expenditure outlay”.

The report outlined that the country hosts 50 per cent of the world’s under-nourished children.

The paper quoted data from the National Family Health Survey-4 which showed that close to 60 per cent of children aged between 6 and 59 months are anaemic.

“It is only about 10 per cent of the country’s total children who are receiving adequate diet,” the research report said.

“The women and girl child, for whom the NDA Government has launched flagship programmes, are no better in terms of their daily nutrition intake. About 55 per cent of non-pregnant women and 58 per cent of pregnant women aged between 15-49 years are anaemic.”

Commenting upon the finding, Assocham’s Secretary General D.S. Rawat said the government needs to pursue policies which “focus on removing health and social inequities. Programmes and policies that aim to address the nutrition burden present a double-win situation”.

On the remedy-front, the paper said that in order to cater to the large unmet needs of micro-nutrients, “it is imperative to focus on production diversity as well as food fortification at a macro level”.

“For instance, millets are three to five times more nutritious than rice and wheat in terms of proteins, minerals and vitamins. They are cost effective crops as well; yet considered as poor people’s crop while rice and wheat are preferred over them,” the paper noted.

“Millets are rich in Vitamin B, calcium, iron, potassium, magnesium, zinc and are gluten-free. They are suitable for people with gluten allergies or those with high blood sugar levels.”

IANS

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Republic Day sales: Amazon, Flipkart fight it out with big discounts

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Amazon Flipkart

New Delhi, Jan 21: Top e-commerce players Amazon India and Flipkart are deepening their range of offerings at extreme discounts in the first online sale of the year starting today. While Amazon’s Great Indian Sale will go on till January 24, Flipkart’s Republic Day sale will shut shop earlier by 23 Jan.

With e-commerce becoming the default shopping choice for many, this season – last the previous editions – will see an influx of shoppers logging in to tap the online-exclusive deals.

The hard-to-miss offers this week will include: Mobile phones, Fashion & lifestyle, Home & dining and Large appliances.

Amazon, as usual, offered 12-hours early access to its Prime members starting the sale from Saturday afternoon (January 20).

Industry players believe that cash crunch at the end of the month remains no longer a problem with almost all e-commerce platforms and banks offering extra cashbacks and easy EMI options for customers to have a hassle-free shopping experience.

“Republic Day sales every year serve as a great way to kick start shopping in the new year. Marketing around the sale attracts consumers and encourages impulsive purchases,” Rohan Bhargava, co-founder of CashKaro.com, told IANS.

CashKaro is a partner to more than 1,500 e-commerce sites and provides its members with cashback offers on their online shopping at various sites like Flipkart, Amazon.in, Paytm and Shopclues.

“Even though it is the month-end, given the additional benefits around the sale, it is usually not a deterrent to purchases. Many banks give extra cashback and there are easy EMI options available through which customers can pay in installments,” Bhargava added.

Online marketplace ShopClues had already begun its sixth anniversary “Acche Din Sale” from January 19 targetting Republic Day to end the sale.

“Over 20 lakh products with whopping discounts, upwards of 66 per cent will be on offer, spread across categories like fashion and lifestyle, mobile phones, electronics and accessories, home and kitchen, and even its exclusive labels — Meia, Digimate and Homeberry,” ShopClues said in a statement.

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ONGC to buy government’s 51.11% stake in HPCL for Rs 36,915 cr

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ONGC

New Delhi, Jan 20: State-run Oil and Natural Gas Corporation Ltd (ONGC) will acquire the government’s 51.11 per cent equity share-holding in Hindustan Petroleum Corporation Ltd (HPCL) at a consideration of Rs 36,915 crore.

Through the single share sale, the Centre would be able to meet half of its disinvestment target of Rs 72,500 crore for 2017-18.

“The Government of India has entered into an agreement with ONGC today (Saturday) for strategic sale of its 51.11 per cent equity share-holding in HPCL at a consideration of Rs 36,915 crore,” a statement said.

In line with the budget announcement, ONGC had proposed to acquire the Centre’s existing equity shareholding in HPCL.

Accordingly, the Union Cabinet, in its meeting held in July last year, gave “in-principle” approval to the proposal and decided to set up an alternative mechanism to decide on the price, timing and the terms and conditions of the strategic sale.

“The Alternative mechanism under the Chairmanship of Finance Minister (Arun Jaitley) in its meeting today (Saturday) approved the price bid of ONGC and the terms and conditions of the sale,” it said.

Through this acquisition, ONGC will become India’s first vertically integrated “oil major” company, having presence across the entire value chain.

According to the statement, the integrated entity will have advantage of having enhanced capacity to bear higher risks, take higher investment decisions and neutralising the impact of volatility of global crude oil prices.

“In this process, ONGC has acquired significant mid-stream and downstream capacity and will attain economies of scale at various levels of operations,” it said.

Through this economic consolidation, HPCL will join as a member of an integrated oil and gas major group. This will help it in further leveraging synergy at various levels of vertical value chains and look for economic consolidation within and outside the group.

HPCL will continue to be a Central Public Sector Enterprise (CPSE).

In fact, Prime Minister Narendra Modi had underlined the need of efficient management of government investments in CPSEs during the review in February 2016.

The centre accordingly expanded the approach from disinvestment to investment and public asset management.

As part of investment management strategy, Government decided to explore possibilities of consolidation, mergers and acquisitions within CPSE space.

IANS

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