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  • India has Defied Global Slowdown, Poised to Seize Opportunity: FM
  • GST - a shot in the arm for manufacturing
  • Customs Rules to Change for EOUs, Software Exports
  • Reliance Jio fuels price war, Airtel, Voda cut data prices
  • Chinese Smartphones Widen India Network
  • LeEco to Invest Rs 1,300 cr to Develop Content for India
  • A budget dual screen
 
Policy Update
 
A ray of hope for GST roll out: It is welcome that the government and the Opposition have found common ground on amending the Constitution to enable the transition from a fragmented set of indirect taxes to a harmonized system of goods and services taxes across the country. The Congress has dropped its demand for specifying a cap on the GST rate in the Constitution and has settled for the cap being specified in the central GST and Integrated Goods and Services Tax (IGST) Bill. The government, on its part, has dropped a 1% tax on inter-state sales and accepted the need for a dispute resolution mechanism and agreed to compensate states for full five years for any loss in their indirect tax collections they suffer on account of moving to GST.

The Constitution Amendment removes statutory incapacity of the Centre to collect taxes on retail sales of goods and of the states to tax services; creates a new IGST for goods and services sold across state borders, to be levied by the Centre and apportioned with the concerned states; and creates the GST Council with representation from all states and the Centre. This is a major step forward. But for the transition to GST to be complete, Parliament has to pass two Bills, on the central GST and on IGST, and the states must pass state GST laws. There has to be agreement on the rates of tax and on how the GST Council would work. Without reaching agreement on the rates and procedures to be adopted, these Bills would not be converted into Acts. If the process stretches into 2017-18, leaving implementation of the tax to April 2018 at the earliest, the government itself would not be keen to embrace the unpredictable consequences of adopting a new tax system in the run-up to the next general elections.

While much work remains to be done before the levy can be rolled out, Finance Minister Arun Jaitley has said he's optimistic about getting it in place by April 1 next year.
(ET, Aug 04, 2016)

Handset Vendors Making in India Seek continuation of duty structure that will make handset imports expensive: Handset vendors, worried about how the proposed goods and services tax (GST) regime will affect the Make in India initiative, intend to seek clarity from the government on incentives offered for manufacturing phones locally. The companies are preparing a proposal for the government, seeking continuation of a duty structure that will make it more expensive to import handsets than to produce them in the country. A formal request, with the consensus of all handset makers, will be sent to the revenue department.

"We're mulling a proposal where we will be asking the government to keep the differential duty structure as is in order to keep the benefits for local manufacturing," said Pankaj Mohindroo, chairman of the Fast Track Task Force established by the government to achieve its target of 500 million locally made handsets as part of the Make in India programme.
(ET, Aug 03, 2016)

 
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