GST IMPACT: SERVICES ACTIVITY CONTRACTS TO 4-YEAR LOW IN JULY, SAYS REPORT
NEW DELHI: The services sector contracted in July and fell to its lowest level in nearly four years following implementation of the Goods and Services Tax (GST), showed a monthly survey on Thursday.
The Nikkei India Services Purchasing Managers’ Index (PMI), a pointer to services output on a monthly basis, plunged to 45.9 in July, the lowest since September 2013, from June’s eight-month high of 53.1.
The July services PMI also signalled the first downturn in output since the start of this year.
“PMI data for July highlight a reversal in fortunes across India, with the economy going into the reverse mode after seeing a pick-up in growth momentum during June,” said Pollyanna De Lima, Principal Economist at IHS Markit, and author of the report.
The launch of GST was cited by services firms as having caused contraction in new work orders, leading to lower activity, the survey said.
The downturn in services follows a similar weakness in the manufacturing sector, which also contracted in July following the GST launch as new orders and output dropped significantly.
Accordingly, the seasonally adjusted Nikkei India Composite PMI Output Index — which maps both manufacturing and services — fell sharply to 46.0 in July, from 52.7 in June.
“Private sector activity dipped for the first time since the demonetisation shock and to the greatest extent since early 2009, mirroring the sales trend,” Lima added.
Indian service providers, however, remain optimistic about the 12-month outlook.
“Whereas many will question how deep an impact the GST will have on the economy in the near and long term, firms seem convinced that prospects will brighten as the new tax regime becomes clearer,” Lima said.
Meanwhile, the Reserve Bank has lowered its key lending rate by 0.25 per cent, a move which is likely to translate into lower interest rates for home, auto and other loans as also boost economic activity.
ARUN JAITLEY INDICATES SCOPE FOR CLUBBING 12% AND 18% RATES UNDER GST
NEW DELHI: Finance minister Arun Jaitley on Wednesday said there is scope to rationalise goods and services tax (GST) and rolling 12 per cent and 18 per cent slabs into one as implementation of the country’s most comprehensive indirect tax reforms progresses.
“I do concede that as it (GST) moves forward, there will be scope for rationalising the rates. There, probably, will be scope that the two standard rates of 12% and 18 per cent, after some time, could be clubbed into one. That is a fair possibility and a suggestion,” Jaitley said replying to debate on the two bills related to GST in J&K.
Central Goods and Services Tax (Extension to Jammu and Kashmir) Bill, 2017 and the Integrated Goods and Services Tax (Extension to Jammu and Kashmir) Bill, 2017 were later passed by a voice vote.
The current GST has 5 per cent, 12 per cent, 18 per cent and 28 per cent rates, plus one for luxury and sin goods. There are some that are zero rated, or nil rate.
AMLA EASES THROUGH GEARS PAST TO INSPIRE SOUTH AFRICA
Jaitley said if the two rates had been merged into one its inflationary effect would have been high. “Therefore, we did not get into this exercise,” he said responding to criticism over several slabs in the GST rates. Jaitley said there can’t be a single slab in a country like India which has a large population below poverty line (BPL). As an example, he said a hawai chappal and a BMW car could not be taxed at the same rate.
The finance minister also wondered why certain manufacturers have hiked the prices of small hybrid cars even though the duty has been reduced. He added that a hybrid car is priced higher and those who buy it can afford to pay a little more. He said one of the GST objectives is to assist domestic products and the government does not want to just allow cheap foreign products to come in.
Jaitley said the passage of the bills will ensure greater economic integration of the state with rest of the country. He asserted that special status of Jammu and Kashmir was “never meant to create economic impediment” as he maintained that the GST is in the larger interest of traders and consumers of J&K.
Jaitley said it was a positive step that J&K has been integrated with GST and the dream of one tax regime is now met, hitting out at the Congress party for its reported claim that GST would infringe upon the special status of J&K.
“If they (J&K) didn’t integrate, the traders would not have got input credit and the tax on final products would have been higher… That would have made products costlier and consumers would have to pay more,” the minister said. “J&K is a consumer state and GST being a destinationbased tax, revenues of the state would increase.” He added that if GST was not put in place in J&K, then customers would prefer to buy products like cars and refrigerators from outside the state.
INDIA’S Q2 GOLD DEMAND SURGES 37% TO 167.4 TONNES, SAYS GOLD COUNCIL
MUMBAI: Gold demand in India jumped by 37 per cent to 167.4 tonnes during the second quarter of 2017, buoyed by seasonal demand and improved rural sentiment, the World Gold Council (WGC) said in a report.
The demand in the April-June last year stood at 122.1 tonnes, WGC said in its latest Gold Demand Trends report.
In value terms also, the demand surged by 32 per cent at Rs 43,600 crore against Rs 33,090 crore in the Q2 2016.
“However, the second quarter demand is lower than the five-year average and is mainly driven by the anxiety on the Goods and Services Tax (GST) roll out, which led to advance purchase towards the end of quarter,” WGC managing director, India. The second quarter of 2016, was partially affected by the jewellers strike against one per cent excise duty on jewellery, he said.
The total jewellery demand in India during Q2 this year was up 41 per cent at 126.7 tonnes as compared to 89.8 tonnes in the same period of last year, the report said.
In value, jewellery demand grew by 36 per cent at Rs 33,000 crore against Rs 24,350 crore in the corresponding quarter of 2016.
The total investment demand was up 26 per cent at 40.7 tonnes against 32.3 tonnes in Q2 2016.
Similarly, in value terms, gold investment demand was recorded at Rs 10,610 crore, up 21 per cent from Rs 8,740 crore in the corresponding period last year.
The total gold recycled in India in the April-June period increased at 29.6 tonnes against 23.8 tonnes in Q2 last year.
“India’s gold demand in Q2 2017 was a robust quarter as seasonal demand and improved rural sentiment contributing to the year-on-year increase. Both jewellery and investment demand saw a healthy rise despite a low base of Q2 2016,” Somasundaram said.
Though underlying concerns about GST and other transparency measures continue, predictably, positive sentiment returned with continued remonetisation and an expectation of a good monsoon, he said.
This was evident in the sales momentum during ‘Akshaya Tritiya’, supported by a relatively higher number of auspicious wedding days during the quarter, he said.
“Looking ahead, in the second half of the year, as consumers and trade adapt to the new tax and compliance regime, growth will remain range bound even with good monsoons. Our full year demand estimate remains between 650 and 750 tonnes, the higher end of the range being more likely,” Somasundaram said.
CASHEW DECLINES ON SUBDUED DEMAND
New Delhi, Aug 3 () Cashew prices fell by Rs 5 per kg in the national capital owing to sluggish demand from retailers and stockists amid adequate stocks.
Increased arrivals from producing belts against slackened demand from bulk consumers also weighed pressure on the cashew prices.
Cashew kernel (No 180, 210, 240 and 230) prices fell Rs 5 each to conclude at Rs 1,075-1,085, Rs 950-965, Rs 895-930 and Rs 820-845 per kg, respectively.
Marketmen said slackened demand from retailers and stockists against adequate stocks weighed on cashew prices.
Following are today’s (Thursday) quotations (per 40 kgs):
Almond (California) Rs 18,000-18,200, almond (gurbandi) Rs 12,100-12,200, almond (girdhi) Rs 5,200-5,300; abjosh afghani Rs 8,000-23,000, almond kernel (california) Rs 662-672 per kg, almond kernel (gurbandi) Rs 700-800 per kg, chilgoza (Roasted) (1 kg) Rs 2,600-2,800, cashew kernel 1 kg (no 180) Rs 1,075-1,085, cashew Kernel (no 210) Rs 950-965, cashew kernel (no 240) Rs 895-930, cashew kernel (no 320) Rs 820-845, cashew kernel broken 2 pieces Rs 675-775, cashew kernel broken 4 pieces Rs 655-770, cashew kernel broken 8 pieces Rs 555-665, copra (qtl) Rs 9,000-11,500, coconut powder (25 kgs) Rs 4,100 -4,500, dry dates Red (qtl) Rs 2,300-12,000, fig Rs 20,000- 26,000, kishmish kandhari local Rs 10,000-15,000, kishmish kandhari special Rs 9,000-21,000, kishmish Indian yellow Rs 3,600-4,900, kishmish Indian green Rs 5,100-7,600, pistachio Irani Rs 1,100-1,200, pistachio hairati Rs 1,380-1,450, pistachio peshawari Rs 1,520-1,620, pistachio dodi (roasted) 700-800, walnut Rs 280-390 and walnut kernel (1 kg) Rs 810- 1,310. DP SUN DPL SRK.
BUSINESSES CAN START FILING JULY RETURNS ON GSTN FROM AUG 5
New Delhi, Aug 3 () The first tax returns under the new Goods and Services Tax (GST) regime can be filed from Saturday and the facility will remain open till August 20, GST Network CEO Navin Kumar said.
Businesses can start filing their first GST returns and pay taxes for July on the portal of GST Network — the IT infrastructure provider for the new indirect tax regime, beginning August 5, he told.
To make compliance easy for businesses, the GST Council has allowed businesses to initially file their returns on self-assessment basis in the first two months of the GST rollout.
So, the GST returns for July and August will be filed on the Goods and Services Tax Network (GSTN) portal by filling up GSTR 3B form.
“We will start the facility of filing interim return form GSTR 3B by August 5 and any registered entity who has transacted business in July will have to file the return by August 20,” Kumar told .
GSTN has tied up with 25 agency banks authorised by the RBI to collect taxes, he said.
“We have tied up with all major banks, both private and public. The facility for tax payment is already on and Integrated GST is being collected. Along with filing of returns by August 20, payments for central and state GST will also come in,” said Kumar, in-charge of the biggest technology backbone created for the new indirect tax regime.
Over 71.30 lakh excise, service tax and VAT payers have migrated to the GSTN portal with 13 lakh fresh registrations.
The final GST returns for July will have to be filed by these businesses by September 5 instead of August 10.
Companies will have to file sale invoice for August with GST Network by September 20 instead of September 10 earlier.
The sales returns for September will have to be filed by October 10. JD ARD.
MOTH, ARHAR RISE ON STOCKISTS BUYING
New Delhi, Aug 3 () Prices of moth and arhar rose by up to Rs 150 per quintal at the wholesale pulses market today (Thursday) on revival of buying by stockists following uptick in demand from retailers.
Traders said fresh stockists buying on the back of pick up in demand from retailers, mainly led to the rise in moth and arhar prices.
In the national capital, moth rose by Rs 150 to Rs 3,300 -3,700 per quintal. Arhar and its dal dara variety also edged up by Rs 50 and Rs 100 to Rs 3,700 and Rs 5,600-7,400 per quintal, respectively.
Following are today’s (Thursday) pulses rates (in Rs per quintal):
Urad Rs 4,150-5,050, Urad Chilka (local) Rs 4,250-4,350, Urad best Rs 4,350-4,850, Dhoya Rs 4,750-4,950, Moong Rs 4,500-5,200, Dal Moong Chilka local Rs 5,200-5,400, Moong Dhoya local Rs 5,800-6,300 and best quality Rs 6,300-6,500.
Masoor small Rs 3,500-3,700, bold Rs 3,550-3,800, Dal Masoor local Rs 3,800-4,300, best quality Rs 3,900-4,400, Malka local Rs 4,100-4,300, best Rs 4,200-4,400, Moth Rs 3,300-3,700, Arhar Rs 3,700, Dal Arhar Dara Rs 5,600-7,400.
Gram Rs 5,150-6,000, Gram dal (local) Rs 5,900-6,300, best quality Rs 6,300-6,400, Besan (35 kg), Shakti bhog Rs 2,500, Rajdhani Rs 2,500, Rajma Chitra Rs 7,700-10,000, Kabuli Gram small Rs 9,300-10,500, Dabra Rs 2,700-2,800, Imported Rs 4,700-5,100, Lobia Rs 4,800-5,000, Peas white Rs 2,600-2,625 and green Rs 2,650-2,750. SUN KPS SRK
VIDEOCON EDGE EYES 12% SHARE OF BIZ COMMUNICATION MARKET
New Delhi, Aug 3 () Enterprise arm of Videocon Telecom said it has set a target of cornering 12 per cent market share, about Rs 195 crore revenue, in the Indian business communications market in the current financial year.
Videocon Edge is eyeing business from services like sms applications, toll free conference solution and interactive voice response system.
“The enterprise communication solutions market is estimated to be approximately Rs 1600 crore, and considering we are a recent entrant in the market, we are targeting a fair market share of 12 per cent, about Rs 195 crore this financial year,” Videocon Telecom and Smartphones CEO Arvind Bali said in a statement.
He said that looking the potential of the market, Videocon Telecom had setup the enterprise communication solutions vertical last year.
The company said that application-to-person, which means sms generated while operating applications, dominates the enterprise communication market with around 82 per cent share.
Bali said the market is expected to grow two-fold within the next few years.
He said that current A2P sms market in the country of 180 billion SMS per year is only about one-fourth of the average A2P SMS consumption of the rest of the world.
“There is a huge potential for the business. We aspire to be the first choice of businesses and brands using the service, and desire to be among the top 3 players by 2020,” Bali said.
Videocon Telecom has exited the mobile services business but still holds fixed line infrastructure and pan-India permit for internet services.