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DebtFX: US Presidential Elections in Focus
Nov 08,2016

Both global and domestic markets are likely to be singularly focused on the outcome of US presidential elections, to be held on 8 November 2016, says India Ratings and Research (Ind-Ra). Domestically, currency and debt markets are likely to take cues from global developments, amid this otherwise data-light week. The 10-year G-sec yield could trade at 6.78%-6.89% (6.82% at close on 4 November 2016). The rupee is likely to trade at 66.50/USD-67.30/USD (66.71/USD at close on 4 November 2016).

Risk-Off Sentiments Trigger Market Correction: The keenly awaited US elections will set the tone for the markets this week. In the run-up to elections, both equity and debt markets have corrected as both lead candidates have close possibilities to win the elections. Additionally, uncertainties over timeline and modalities of Brexit have kept investors sentiments cautious. This is evident in the recent appreciation of Swiss franc and Japanese yen, which are largely viewed by investors as a safe haven to hedge against the US dollar volatilities.

Bond Yields to Remain Anchored: Governments upcoming repurchase auction (INR150bn) will alleviate some pressure on demand-supply dynamics in the debt market - as a combined gross supply of over INR410bn is scheduled this week in the form of both central and state government borrowings. Easy interbank liquidity conditions suggest limited need for durable liquidity injection, keeping scope for open market purchase operations dim in the near term. Incremental scope for yields to soften significantly from the current juncture is limited on account of two major factors (1) front-loaded open market operations by the Reserve Bank of India (2) global volatility as key events unfold.

Transmission of Global Risks to Keep Rupee under Radar: Notwithstanding the swings in major global currencies and initiation of FCNR (foreign currency non-resident) deposits redemption, the rupee has exhibited a relatively steady performance. A resurgence of risk-aversion sentiment globally will impact emerging market currencies, in general - exposing rupee to potential pressure. However, the impact is likely to be cushioned in the absence of any kneejerk and panic-selling pressure from foreign investors.

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Smog hitting employees at India Inc. hard and fast in Delhi-NCR: Survey
Nov 08,2016

Smoggy atmosphere across Delhi-NCR has started taking a toll on peoples health and is hampering their ability to do their jobs efficiently, according to a just-concluded quick survey by ASSOCHAM.

The Social Development arm of the Associated Chambers of Commerce and Industry of India (ASSOCHAM) interacted with human resource professionals in about 150 companies working in different industries both in public and private sectors in and around Delhi to evaluate impact of air pollution on companies financial health in India Inc.

The survey was conducted during the course of past one week.

Most of the HR professionals said they are facing staff crunch ranging between 5-10 per cent with growing number of employees calling in sick.

Persistent cough, burning eyes, itchy throat and respiratory/lung-related problems like asthma and bronchitis are the main reasons as to why many employees are not turning up for work, said many of HR representatives.

Though many HR professionals said they have installed air purifiers across their office and have advised their staff to use face mask but the severity of air pollution has certainly impaired performance through changes in respiratory, cardiovascular, and cognitive function.

Though many private companies are allowing their employees to work from home while recuperating from their illness, the survey noted.

As per studies, the most harmful for sedentary office workers is particulate matter, which can seep-in buildings through windows and vents thereby entering the blood stream and central nervous system, affecting concentration and mental performance.

n++Air pollution in Delhi-NCR is not just devastating the environment but harmful amount of gases, dust, fumes and odour are causing breathing problems to people,n++ said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the chambers survey.

n++Companies should offer employees flexible working hours to cope with this problem,n++ said Mr Rawat.

n++Environment and air pollution related issues might hurt brand India and hit sectors like tourism, outdoor recreation as people tend to stay away from polluted areas so as not to breathe in dense and toxic air,n++ he said.

n++Sick days together with visits to hospital might impact middle class people the most as high levels of pollution are linked to serious chronic illnesses, like heart disease and lung cancer, which are costly to treat,n++ added Mr Rawat.

n++Sunshine and good air have become luxury for Delhiities who have been dealing with anxieties over pollution, traffic, living costs, property values and the general stress,n++ he said further.

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Tapping value added to finance urban infra projects through innovative Value Capture Financing
Nov 08,2016

In the context of growing demand for resources to finance ongoing urban infrastructure expansion, the Ministry of Urban Development will soon come out with a policy framework for an innovative resource mobilization through Value Capture Financing (VCF). This seeks to enable States and city governments raise resources by tapping a share of increase in value of land and other properties like buildings resulting from public investments and policy initiatives, in the identified area of influence.

The Ministry will soon have inter-ministerial consultations on Value Capture Financing based on the feedback from the States. Shri Rajiv Gauba, Secretary (Urban Development) held final round of consultations with States in this regard last week.

The Ministry is keen about integrating VCF into project feasibility assessment for systematic and large scale adoption of capturing a part of potential increase in the value of land and other properties resulting from the proposed investment. The Ministry has identified ten ways of VCF out of which only a couple are being currently used for project financing by some States.

The proposed VCF policy framework that works as a guide to State and city governments will assist in assessing the scope of resource mobilization, identifying the area of influence of proposed projects and optimizing resource mobilization.

The different instruments of VCF are ; Land Value Tax, Fee for changing land use, Betterment levy, Development charges, Transfer of Development Rights, Premium on relaxation of Floor Space Index and Floor Area Ratio, Vacant Land Tax, Tax Increment Financing, Zoning relaxation for land acquisition and Land Pooling System.

While Betterment levy and Development charges are being currently used to some extent in States, the other instruments also have substantial scope for resource mobilization.

Traditional resource mobilization through direct sale of land, the most fundamental asset owned and managed by States and Urban Local Bodies is an inefficient form of resource mobilization and the Ministry is keen about land monetization more effectively though value capture. This innovative mechanism could also be used by central Ministries investing heavily in building national highways, railway projects, power generation and port infrastructure development.

Some cases of current use of VCF tools are:

The Mumbai Metropolitan Region Development Authority (MMRDA) and City and Industrial Development Corporation Limited (CIDCO) have used different Value Capture methods including Betterment levy to finance infrastructure development in the urbanizing areas. Tamil Nadu and Maharashtra have made Land Value Tax applicable to urban areas too under which increase in land value is tapped through increased revenue tax. West Bengal has formulated a system to capture gains from land use conversion. Area based Development charges are being resorted to in Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Madhya Pradesh. Karnataka, Gujarat and Maharashtra have made enabling provisions for enabling Transfer of Development Rights to buy additional FSI/FAR. Tax Increment Financing (TIF) enables realization of investments through increased taxes in the area of influence of a project and has been proposed by some cities under Smart City Plans.

Andhra Pradesh Government has resorted to Land Pooling for acquiring land for its Amaravati Capital Project under which farmers have given land in return for developed land parcels. Gujarat and Haryana also used this tool for some projects.

Ministry of Urban Development is working to develop a comprehensive VCF framework so that it can be used efficiently and optimally across the country as a method of financing infrastructure and enhancing the finances of urban local bodies.

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Proposed Regulation on Criteria for Leasing of Foreign Registered Aircraft by Indian Operators for Operation by Indian Crew
Nov 07,2016

To boost the growth of the civil aviation sector and in particular the regional air connectivity scheme, DGCA has proposed a new regulation on criteria for leasing of foreign registered aircraft by Indian operators for operation by Indian crew. This regulation will enable operators to import foreign registered aircrafts and operate them on foreign registration with Indian crew. This will also make the aircraft leasing environment user friendly.

The proposed regulations lay emphasis on airworthiness, training, operation and safety oversight aspects. Before such arrangement would be permitted, both the State of Operator and the State of Registry would have to sign a Memorandum of Understanding on oversight responsibility. This proposal is at a draft stage and is being put up for public consultation. It is likely to be finalized by the second week of Dec 2016.

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Proposed Regulation to Ensure that Pilots Adhere to Flight Duty Assignments
Nov 07,2016

Cases often come to the notice of DGCA where some pilots employed with air transport undertakings do not adhere to their assigned flight duties, at times reporting sick. This has a bearing on flight safety and public interest, leading to last minute flight delays or cancellation, thereby causing inconvenience and harassment to the passengers. Against this background, DGCA has proposed a regulation under the provision of Rule 39A(2) of the Aircraft Rules, 1937.

As per the proposed regulation, any act on the part of pilots wherein they are found to falsely report illness to escape flight duty, report late to the aircraft, do not undertake the flight even after reporting for flight duty or are unwilling to follow the dynamic roster well within the FDTL, which results in last minute flight disruptions and may imperil safety of aircraft operations, would be treated as an act against public interest, and the pilots would be liable for enforcement action against them. The proposal is at a draft stage and is being put up for public consultation. It is likely to be finalized by the second week of Dec 2016.

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The rate structure will achieve the twin objective of protecting the revenues of the Central and the State Governments-FICCI
Nov 07,2016

n++FICCI compliments the GST Council in reaching a consensus and finalising the four tier rate structure under GST. The rate structure will achieve the twin objective of protecting the revenues of the Central and the State Governments and further containing the inflationary pressures that may arise consequent upon the change of the taxation systemn++ said Harshavardhan Neotia, President, FICCI.

n++It is believed that the consensus reached today on the rate structure will pave the way for a successful implementation of GST in the country from . FICCI looks forward to working with the Central and the State Governments in implementing the most ambitious indirect tax reform of the nationn++, Mr. Neotia stated further.

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SPICe e-form for speedy company incorporation-related services to be implemented by December: DIPP Secretary
Nov 07,2016

To improve ease of doing business in India a Simplified Proforma for Incorporating a Company Electronically (SPICe) e-form is to be implemented by December this year. The main objective of launching this e-format proforma is to provide speedy incorporation related services within a stipulated timeframe, in line with international best practices, said Ramesh Abhishek, Secretary, Department of Industrial Policy and Promotion (DIPP), Government of India.

As the Chairperson at the plenary session on Ease-of-Doing Business: NexGen Reforms at the India Telecom 2016 organized by the Department of Telecommunications, Ministry of Communications and FICCI, Abhishek said that the existing INC-29 was not being used; hence SPICe will be the sole, simplified and versatile form available for incorporation of a company in India.

Abhishek said that India ranked 130th in the World Banks Ease of Business ranking, an improvement of one rank from the last year, which meant there was a long way to go. Hence the government was working towards dismantling complex processes to create a business-friendly climate in India.

Speaking about the recently released ease of doing ranking of the states, Abhishek said that a feedback mechanism would be included in the state rankings. The state ranking reflected that the Centre and state governments were working in tandem to improve the business climate in the country.

Elaborating on the various initiatives undertaken by the government, Abhishek said that efforts were being made to reduce physical touch points between the government and private sector interactions with the use of technology to expedite the process of granting licenses and clearances.

Abhishek said that the government has already set up commercial benches in high courts and would soon set up more such courts and e-courts which would move India to paperless courts. Also, India aims to become the arbitration hub and was working towards it. He added that with the Insolvency and Bankruptcy Code 2016 and GST roll-out next April, the business environment will improve in India.

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FICCIs Overall Business Confidence Index at six quarter high
Nov 07,2016

The results of FICCIs latest Business Confidence Survey points towards a sanguine mood among members of India Inc. The Overall Business Confidence Index (OBCI) rose to a six quarter high. The index value stood at 67.3 in the current survey, vis-n++-vis 62.8 in the last round.

This was supported by an improved assessment of the respondents with regard to current conditions as well as expectations. The proportion of respondents citing a moderately to substantially better performance currently vis-n++-vis last six months noted an increase at all the three levels - economy, industry and firm level. The participants were optimistic about near term prospects as well.

About 63% of the respondents in the present survey reported current economic conditions as moderately to substantially better compared to last six months. Likewise, the corresponding number at the industry and firm level was 63% and 60% respectively.

About 75% of the participants said that they foresee a better performance at the economy level in near term. Further, 63% of the respondents at the industry level and 70% of the respondents at the firm level were hopeful of a better performance going ahead.

India is on the recovery course and there are indications of an improved economic activity. The Governments focus on reforms has been laudable and it is hoped that the momentum on implementation will continue. The recent consensus on the passage of GST Bill is commendable and industry is looking forward to GST being rolled out in April next year. This will be a game changer for Indian industry and economy.

The survey results also show that the demand pulse is gradually gaining strength, which is a welcome sign. Good monsoons and award of the seventh pay commission will give a further trigger to demand.

In the current round, 46% of the participants reported weak demand to be an impediment to their business performance. This was lower than 59% respondents stating likewise in the previous round. The proportion of respondents indicating demand to be a constraining factor has noted a decline for the third consecutive quarter.

The respondents also indicated that they foresee a pickup in domestic demand over the period October, 2016 to March, 2017. 62% of the respondents said that they expect domestic demand to increase by up to 10% over next six months; and about 16% participants anticipated an increase of more than 10%.

Further, a higher proportion of respondents (vis-n++-vis the last survey) expected an improvement in the order book position over next two quarters. About 59% of the respondents anticipated a better order book position over the coming six months, vis-n++-vis 55% stating likewise in previous round.

With respect to credit, an increase was noted in the proportion of respondents citing availability and cost of credit to be constraining factors. In the present round 54% of participants reported cost of credit to be a bothering factor. The corresponding number in the previous round was 46%.

In addition, 29% respondents said availability of credit was an issue, vis-n++-vis 24% stating likewise in the previous round.

High interest cost has been one of the major areas of worry for the industry. It remains critical that the cost of capital is made competitive to propel investments. The Reserve Bank of India has cut the repo rate by 175 bps since January last year. The survey results show that on an average, the companies are paying an interest rate of about 12.0% on working capital and term loans.

The Government had also announced a cut in the small saving rates earlier this year. It remains critical that Banks take cognizance of the situation and transmit these cuts by lowering the lending rates.

Results pertaining to operational parameters indicated mixed signs. In the present round, participating companies seemed upbeat about near term sales prospects and profits when compared to the previous survey results; however their outlook on other parameters such as investments, employment and exports was by and large unchanged.

With regard to sales prospects, a majority of the respondents anticipated an improvement in performance over the next two quarters. About 62% participating companies said that they foresee higher sales over the coming six months. In the previous survey, 55% companies had reported the same. Higher disposable income in hands of consumers along with the onset of festive season is expected to drive sales.

On the investment front, a marginal increase was noted in the proportion of respondents expecting an uptick in investments. 41% participants anticipated higher investments over the next six months, which was 2 percent points higher than the corresponding number in the previous round.

In light of the measures undertaken by Government to kick-start investments, the participants were also asked to indicate if they have witnessed any projects taking off in and around their area of operation.

About 46% of the participants in the survey said that they have noted an improvement in investment activity in and around their area of operation. The participants indicated projects being implemented in sectors including Roads & Highways, Civil Aviation, Power, Construction, Auto & Auto Ancillary.

Further, the latest assessments by IMF and World Bank point towards persistence of headwinds and global economic situation is likely to remain challenging over the near term. This sombreness was also reflected in the outlook of the participants with regard to exports. In the current survey, 32% of respondents anticipated exports to go up over the next two quarters. In the previous round the corresponding number was 34%. In addition, 45% respondents expected no change in the export volumes, while 23% said that they foresee a decline.

With regard to hiring prospects, 31% of respondents in the latest round reported that they would consider hiring more people in the coming six months; the corresponding number in the last round was 29%. Nonetheless, still a majority 56% of the participants did not foresee any fresh hiring over the near term.

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Export of Oilmeals was down by 29% April - October 2016-SEA
Nov 07,2016

The export of oilmeals during October 2016 is reported at 67,779 tons compared to 34,168 tons, as per the data compiled by The Solvent Extractors Association of India (SEA). The overall export of oilmeals during April to October, 2016 is reported at 554,147 tons compared to 783,565 tons during the same period of last year i.e. down by 29% due to lesser availability of oilseeds for crushing and continuous disparity in exporting soybean meal in International Market.

Oilmeal import by South Korea from India during April-Oct., 2016 is reported at 378,064 tons compared to 481,827 tons; consisting 137,567 tons of rapeseed meal and 240,497 tons of castor meal. Vietnam imported 113,743 tons compared to 175,744 tons last year; consisting of 5,824 tons of rapeseed meal, 103 tons of soybean meal and 107,816 tons of Deoiled Rice Bran Extraction. Taiwan imported 16,988 tons compared to 22,340 tons last year; consisting of 7,082 tons of rapeseed meal, 827 tons of groundnut meal and 9,079 tons of castor meal. Myanmar imported 16,989 tons compared to 13,225 tons last year; consisting 3,039 tons of soybean meal , 2,845 tons of rapeseed meal, 10,906 tons of Deoiled Rice Bran Extraction and 199 tons of groundnut meal.

The export from Kandla is reported at 377,944 tons (68%), followed by Kolkata handled 122,022 tons (22%), Mumbai including JNPT handled 16,686 tons (3%), and Mundra handled 37,495 tons (7%).

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PHD Chamber urges the Government to rationalise 28% GST on white goods
Nov 07,2016

While welcoming the GST rate structure of 5%, 12%, 18% and 28% announced by the Union Finance Minister, the President, PHD Chamber of Commerce and Industry, Dr. Mahesh Gupta said 28 per cent tax on white goods is not in sync with the present tax reforms.

Dr. Mahesh Gupta said that high tax rate will have a cascading impact on the consumer goods segment and hit to consumer demand majorly in the rural segments of the economy as demand is primarily emerging for the rural sectors of the economy.

I strongly believe that the impact of GST would be a major game changer for the economy for accelerating the economic growth and generating more and more employment opportunities, said Dr. Mahesh Gupta.

The lowest tax rate of 5 percent is suggested to be levied on items of mass consumption such as spices, mustard oil etc. which are used particularly by common people is a welcome step. The standard tax rate of 12 and 18 percent would accommodate most of the goods and services including processed foods, soaps, oil, smart phones etc. is also good.

We appreciate the pre emptive measures to keep inflation under check as essential items including food, which presently constitute roughly half of the consumer inflation basket, will be taxed at zero rate, said Dr. Gupta.

Undoubtedly, the interest of common man has been duly taken care of which is evident from finalisation of 5% tax rate on common use items, as against 6% proposed earlier. Further, zero rating of necessities is also a welcome move in the beneficial interest of the common man, said Dr. Mahesh Gupta

The fourth slab of 28 percent will imply to white goods and cars while an additional cess will be collected along with the higher tax rate of 28 percent on Luxury cars, which the industry says is counterproductive to the ongoing tax reforms in the country as it will have impact on demand and make in India programme and consequently on manufacturing and employment, said Dr. Gupta.

The Chamber urges the government to look into GST rate for white goods and to reduce the same to maintain a rational rate in line with the initial aims of GST implementation. The chamber awaits the rates for gold and precious metals which will be announced today during the GST council meet today, he said.

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Spurt in Imported Coal Prices to Negatively Impact the Power Value Chain
Nov 07,2016

The 60% rise in imported coal prices (Richard Bay Index) between April - October 2016 is likely to negatively impact the power sector value chain, says India Ratings and Research (Ind-Ra). The distribution companies (discoms), independent power producers (IPPs) with non-escalable fuel cost, merchant IPPs and ports relying on imported coal for the bulk of their volumes will face volume and profitability pressures. The increase in imported coal prices was more pronounced in October 2016, wherein prices rose by 25% to around USD85/t from USD68/t in September 2016.

Distribution Companies

Ind-Ra notes, that historically the ability of the distribution companies (discoms) to pass on fuel cost increases to the end-consumers has been limited and delayed due to the political intervention in the tariffs. The regulatory commissions can allow a pass-through of such costs, by way of power purchase and fuel cost adjustment (PPFCA), since power purchase cost is an uncontrollable expense for the discoms. However, anecdotal evidence suggests that most state regulatory commissions have not allowed for such PPFCA adjustments on an actual and timely basis, which has led to an escalation in the power purchase cost of discoms, without a commensurate increase in revenues.

Merchant IPPs

Ind-Ra expects merchant IPPs which sell power through the merchant route, to be impacted significantly since the prices on the exchanges/bilateral trades have not moved up at the same rate (2% mom), as the rise in variable cost of generation (25%) in October 2016, on account of the imported coal price increases (Figure 2). Thus leading to a significant compression in their gross margins, which have fallen to zero in October 2016 (Figure 2). Hence the viability of merchant IPPs on imported coal is doubtful in the current price scenario.

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Imports from China seen decelerating by 20% in the coming months: PHD Chamber
Nov 07,2016

Demand for Chinese products in India is decelerating month after month and imports from the country would see a major hit in the coming months finds a survey conducted by PHD Research Bureau of PHD Chamber of Commerce and Industry.

Survey has been conducted in the various consumer and industry segments across the country and around 2000 responses were analysed from the consumption segment and more than 100 industry stakeholders participated in the survey study.

Demand for industrial products such as raw materials etc is declining by 10-15% and demand for consumption goods is less by 20-25% said the survey study.

Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry said that Indian production capabilities are incasing and becoming competitive as compared with China because of many reasons such as improvement in the ease of doing business. Also, there is a significant shift in the consumption pattern of Indian consumers from the Chinese products to domestic products.

India has been dramatically improving in all the global frontiers with its accomplishments in the Global Competiveness Index by moving 16 spots up to 39th place from 55th place earlier, Ease of Doing Business Ranking (130th) and improvements in goods market efficiency, business sophistication, and innovation which reflects there is a rising accentuation in global competitiveness of India, said Dr. Mahesh Gupta

Indias imports from China increased more than 500% from US$10bn to US$61bn during the last ten years from 2005 to 2015. Chinas share in Indias imports increased from 7% in 2005 to around 16% in 2015 said the analysis by PHD Research Bureau.

However, the trend has been reversed and growth of imports from China decelerated by 8% in the first six months of the current financial year 2016-17.

The growth of imports from China has been decelerating and is in the negative trajectory in the recent months; no enthusiasm is seen in the upcoming months too.

Despite the festive season imports from China decelerated (-) 14.5% in the month of September 2016 whereas imports from World decelerated (-) 2.5%.

Majority of the decline in imports has been witnessed in products such as ships and boats, tobacco products, aquatic products, pearls and precious stones, musical instruments and parts thereof, mineral fuels and oils, lead and articles thereof, cocoa products, and wool and products thereof, further revealed the analysis.

Analysis highlighted the pivotal role of investments for the long term sustainable goals.

FDI inflows from China to India between April 2000 and March 2015 stood at USD 288.512 billion wherein Chinas share was roughly 0.47% which rightfully indicates that China is not a significant and substantial investor in India as compared to Singapore, Mauritius and Switzerland.

As the Make in India programme is getting pace month after month, we can anticipate a significant improvement in the balance of trade with China, said Dr. Mahesh Gupta.

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SEA requests the Government to initiate Market Intervention Operation to buy groundnut shell at MSP
Nov 07,2016

This year, during the current kharif season, country will be harvesting a bumper groundnut crop of about 55.0 lakh tonnes against 32.3 lakh tonnes last year. The total production of groundnut in shell as per trade estimate would be about 70.0 lakh tonnes for the current oil year against last year 45.0 Lakh tonnes. Government has fixed Minimum Support Price for groundnut in shell at Rs.4,220 per quintal, whereas due to bumper crop, the prices has already fallen below MSP and farmers are forced to sell in distress at Rs.3,700/- to Rs.3,800/- per quintal which is likely to go down further with the full arrival pressure, discouraging and disappointing the groundnut farmers.

To support the groundnut farmers, Solvent Extractors Association of India (SEA) has strongly requested the Government to initiate Market Intervention Operation (MIO) to buy groundnut shell at MSP and also allow immediately the export of groundnut oil in bulk to support the price level.

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Centralised registration system under GST is imperative for ease of doing business: CII President
Nov 07,2016

Model GST Law suggests multiple registrations in each State for supply of goods and services. n++This has the potential to result in huge burden of complexity as companies operate in many different States. Businesses in the services sector such as telecom, banking, insurance, airlines, e-commerce, undertake pan-India operations, meeting requirements of each State through different registrations, audits and compliances would be a massive taskn++, said Dr Naushad Forbes, President, Confederation of Indian Industry. Dr Forbes further stated that n++a centralized registration system should be instituted under GST. States could be offered credits through the Integrated GST (IGST) mechanism. Such a system would greatly simplify ease of doing business and foster better tax compliance.n++

On multiple GST rates, CII has said that GST rates structure can be absolute limit of four rates as suggested by the Government, and over time, the Government should commit to converge to one or two rates. Further, CII has said that it is also important that the bulk of goods and services should fall within the standard rate of 18% and only as exception to go to the higher rate of 28% and a lower rate for essential goods such as unprocessed food items, etc. CII agrees with the proposal that the higher rate of 28% should apply only to demerit goods and the term n++Luxuryn++ goods should not be used to define this category, stated the CII Release.

CII has further suggested that the Cess needs to be levied only at the final product and total tax including Cess on demerit goods should be kept within the present overall indirect tax incidence.

GST Law does not clarify if administration of GST for assessment and audits is to be undertaken by the Central Government or by State governments. n++It would be challenging for companies to meet the requirements of dual administration by both the Central and State governments, while maintaining consistency across different filings. Likewise, it could be an additional burden for the administration in terms of duplication and costs. There should be a single administration process, either by the Center or the State, which would be acceptable to both. This would action the intention of making India a common market with single audit and assessmentn++ said Dr Forbes. He further added that for all purposes of calculating taxes under GST, only the invoice value should be considered.

Dr Forbes further emphasized on the transition to GST issues and stated that n++transition is expected to entail a period where companies have higher inventories and it is necessary to deal with these stocks of goods in terms of applicable tax. GST Law does not clearly specify if credit is available on excise duty and central sales tax paid on inventories of domestic goods, and on countervailing duty (CVD) paid for imported goods. Clarity on this aspect needs to be providedn++, said the CII President.

Introducing a national tax reform of the magnitude that impacts every consumer and millions of producers is certainly not an easy endeavour. n++We commend the Central and State governments for strong commitment to the GST. In turn, CII pledges to partner with the government to ensure smooth, hassle-free, and efficient roll-out of the GST so that all stakeholders derive the maximum benefitn++, stated Dr Forbes.

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Improvement in Ease of Doing Business Ranking Inspiring: PHD Chamber
Nov 07,2016

While appreciating the importance in Ease of Doing Business to the rank of 130 by the World Bank, Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry said that lot of things at the ground level are becoming visible and the business community is enthusiastic to enhance its growth trajectory going forward.

India is now ranked at 130th among 190 economies by the World Bank.

Implementation of the Insolvency and Bankruptcy code would improve the ranking further. It is also expected that the goods and services tax will help make significant improvement in Indias ranking next year, he said.

Going ahead, President, PHD Chamber, Dr. Mahesh Gupta suggested that the Government must focus on the reforms in labour laws and decriminalization of businesses as stringent labour laws are a major roadblock to enhance production possibility frontiers and employment generation in the economy.

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