Uzbekistan to reinforce strategic partnership with India: talks with PM Modi next week
Targeting bilateral trade at $1 billion with India within two years, leading a high-level delegation in what will be his first visit to India since assuming office in 2016, Uzbekistan President Shavkat Mirziyoyev is arriving in New Delhi on a two-day visit on Sunday. The visit is expected to reinforce the strategic partnership between the two countries and to be centred on connectivity, investment cooperation, and trade and agro business.
According to an official statement of the MEA, the visiting leader and Prime Minister Narendra Modi will hold restricted and delegation-level talks on October 1. The two leaders had met on the sidelines of the Shanghai Cooperation Organisation (SCO) Summit in Qingdao, China, in June and also at last year’s SCO Summit in Astana, Kazakhstan, when India was made a full member of the Eurasian inter-governmental organisation.
Stating that relations between India and Uzbekistan have traditionally been close and cordial, the statement said: “Since 2011, the two countries have elevated their relations to the level of strategic partnership encompassing cooperation in a wide spectrum of areas including political, economic, education, health, human resource development, defence, counter-terrorism, science and technology, culture and tourism.”
Briefing the media Uzbek Ambassador to India Farhod Arziev said that during the visit, a meeting of the Uzbek-Indian Business Forum will be held. “The two countries were working on more transport corridors to boost trade after India joined the Ashgabat Agreement, which seeks to establish an international transport and transit corridor between Iran, Oman, Turkmenistan and Uzbekistan,” the envoy added.
Government again hikes duty benefits for exports of as many as 28 milk related products
The government has again hiked duty benefits for exports of as many as 28 milk related products such as cheese and yoghurt under a scheme to boost their overseas shipments. The duty benefits were enhanced under the Merchandise Export from India Scheme (MEIS). Under this scheme, the government provides ‘duty credit scrip’ to exporters. The rates vary from product to product and the export destination, as envisaged in the foreign trade policy.
Rewards under the scheme are payable as percentage of realised free-on-board value and MEIS duty credit scrip can be transferred or used for payment of a number of duties, including the basic customs duty. “The MEIS benefit for certain items have been enhanced to 20 per cent from the current 10 per cent,” the Directorate General of Foreign Trade said in a public notice.
The products which would enjoy the incentive include butter milk, fresh cheese, grated or powdered cheese, skimmed milk, milk food for babies, whole milk and condensed milk The move assumes significance on account of a milk crisis in Maharasthra. Milk growers had strongly protested in some parts of Maharasthra due to fall in milk prices amid huge supply.
Sushil Modi-led gom to examine modalities for ‘calamity tax’ under GST
The Government Friday constituted a seven-member ministerial panel headed by Bihar Deputy Chief Minister Sushil Modi to examine modalities for revenue mobilisation in case of natural calamities and disasters. The panel would submit its report to the GST Council by October 31, an official release said. Earlier in the day, the GST Council — chaired by Finance Minister Arun Jaitley — decided to set up a Group of Ministers (GoM) to examine the legality of imposing a new tax on certain goods to raise resources for natural calamity-hit states like Kerala.
Assam Finance Minister Himanta Biswa Sarma, Kerala Finance Minister Thomas Isaac and Punjab Finance Minister Manpreet Singh Badal are part of the group. Other members of the GoM are Odisha Finance & Excise Minister Sashi Bhusan Behera, Maharashtra Finance & Excise Minister Sudhir Murgantiwar and Uttarakhand Finance Minister Prakash Pant. “Union Finance Minister Arun Jaitley, has approved the constitution of a Group of Ministers to examine the issue regarding ‘Modalities for Revenue Mobilisation in case of Natural Calamities and Disasters’,” the release said.
To help tide over the losses suffered due to recent floods, Kerala had sought the GST Council’s opinion on allowing imposition of higher taxes on goods within the state. The panel would look into five issues flagged by the Council, including whether the new tax should be levied only in the state concerned or should it be an all-India levy, and that should it be on specified luxury or sin goods only.
Besides, the grouping would look at whether National Disaster Response Fund (NDRF)/ State Disaster Response Fund (SRF) mechanism is sufficient to deal with calamities as well as define circumstances where the ‘calamity tax’ can be imposed. Other issues such as the legal aspect of imposition of such a tax within the GST would also be looked at.
Briefing reporters after the Council meeting, Jaitley said the GST law states that a special rate of tax can be imposed after permission of GST Council. Isaac said the GST law provides that the Council can impose a tax for a temporary period in the GST framework to help states in terms of exigencies. “We have not thought out the details, therefore GoM will look into it. An additional 1 per cent tax on some commodities was discussed,” Isaac said.
GST council discusses revenue shortfall, sets up GoM on ‘calamity tax’
The GST Council Friday set up a seven-member ministerial panel under Bihar Deputy Chief Minister Sushil Modi to examine the legality of imposing a new tax on certain goods and services to raise resources for natural calamity-hit states like Kerala. The panel, headed by Union Finance Minister Arun Jaitley and comprising representatives of all states and UTs, also took stock of the shortfall in tax mop up by majority of the states under the new indirect tax regime.
Briefing reporters after the 30th GST Council meeting, Jaitley said the demand of Kerala to allow imposition of higher taxes on goods and services within the state to help tide over the losses suffered due to the recent floods was considered by the Council.
It was decided that the matter should be referred to a seven-member Group of Ministers (GoM), which would include representatives from North-Eastern, hilly and coastal states. The GoM, which has Assam Finance Minister Himanta Biswa Sarma and Kerala Finance Minister Thomas Isaac as members, would submit its report by October 31. It will look into five issues flagged by the Council, including whether the new tax should be levied only in the state concerned or should it be an all-India levy, and that should it be on specified luxury or sin goods only.
The GoM will also look into whether National Disaster Response Fund (NDRF)/State Disaster Response Fund (SRF) mechanism is sufficient to deal with calamities and also define circumstances where the ‘calamity tax’ can be imposed as also the legal aspect of imposition of such a tax within the GST.
“We will have a seven-member group of ministers which in the next few weeks will make a recommendation,” he said, adding that the grouping will include representatives from North East, hilly states and coastal states as they are hit by calamities the most.
While Jaitley said the GST law states that a special rate of tax can be imposed after permission of GST Council, Kerala Finance Minister Thomas Isaac said the law provides that the Council can impose a tax for a temporary period in the GST framework to help states in terms of exigencies. “We have not thought out the details, therefore GoM will look into it. An additional 1 per cent tax on some commodities was discussed,” Isaac said.
On revenue position of the states, Jaitley said the states faced an average 16 per cent shortfall in Goods and Services Tax (GST) mop up in the first year of implementation (July 2017-March 2018).
The shortfall has come down to 13 per cent during April-August period of current fiscal. While only six states — Mizoram, Arunachal Pradesh, Manipur, Nagaland, Sikkim and Andhra Pradesh — are facing revenue surplus in current fiscal, 25 states are staring at revenue shortfall and have to be compensated by the Centre.
The 10 states facing the maximum revenue shortfall during April-August are Puducherry (42 per cent), Punjab and Himachal Pradesh (36 per cent each), Uttarakhand (35 per cent), Jammu and Kashmir (28 per cent), Chhattisgarh (26 per cent), Goa (25 per cent), Odisha (24 per cent), Karnataka and Bihar (20 per cent each).
The state deficit has to be neutralised within five years of launch of the GST. “As it goes on a glide path downwards, the more it comes closer to zero at the expiry of the 5th year the more the states will be closer to achieving those targets,” Jaitley said.
In 2017-18, the Centre had released Rs 41,147 crore to the states as GST compensation to ensure that the revenue of the states is protected at the level of 14 per cent over the base year tax collection in 2015-16. In current fiscal, there has been a spike in the bi-monthly GST compensation paid to the states by the Centre during June-July. The Centre paid Rs 14,930 crore to compensate states for revenue loss incurred in June and July, a nearly four-fold jump compared to Rs 3,899 crore paid for April and May.
GST council meet: extra tax likely to support kerala
The Goods and Services Tax (GST) Council on Friday set up a committee of seven state finance ministers to examine the legality and recommend the methodology for levying an ‘additional tax’ to raise revenue for floods-ravaged Kerala.
The Council also reviewed the GST revenue collections by the states at its 30th meeting, and found that though collections have improved marginally in the current finacial year, the states’ overall GST revenue deficit is still a worrisome 13%.
Finance minister Arun Jaitley hinted that the overall GST revenue (Centre and states) this year might be short of the nearly `13.2 lakh crore overall (GST+compensation cess) target.
The committee examining the idea of a new impost to assist Kerala would comprise representatives from states prone to natural calamities like northeastern and hilly states and coastal ones, Jaitley said. He added that a decision taken by Council on mitigating revenue loss for a calamity-hit state would set a precedent and would also be used in the future. The Council also considered Kerala’s proposal to have an extra tax on state GST within the state.
The committee will look into five issues flagged by the Council, including whether the new tax should be levied only with the state concerned or should it be an all-India levy, and whether it should it be on specified luxury or sin goods only or on a broader base.
While a cess to cover for losses due to natural calamity would need a change in law – the methodology for such a move is complex –, Jaitley said the GST law provides for a special tax over and above the GST rate with the Council’s approval.
Kerala finance minister Thomas Isaac said the law provides that the Council can impose a tax for a temporary period in the GST framework to help states to deal with exigencies. “We have not thought out the details, so the GoM will look into it. An additional 1% tax on some commodities was discussed,” Isaac said.
“The introduction of any cess either at national level or at state level should be avoided to the extent possible as it would make the entire GST process, including the invoicing, return filings, etc, much more complex for all businesses,” MS Mani, partner, Deloitte India, said.
The committee of state FMs would also look into whether the National Disaster Response Fund (NDRF)/State Disaster Response Fund (SDRF) mechanism is sufficient to deal with calamities and also define circumstances where a ‘calamity tax’ can be imposed as also the legal aspect of imposition of such a tax within the GST framework. “We will have a seven-member group of ministers which in the next few weeks will make a recommendation,” Jaitley said.
Most of the smaller northeastern states reported GST revenue surplus but 25 other states saw their deficit narrow this fiscal. The states facing highest deficit include Punjab, Himachal Pradesh, Uttarakhand, Jammu & Kashmir and Chattisgarh.
According to the GST Compensation law, the Centre would provide the funds to the states to bridge the deficit for the first five years of GST. The deficit is calculated against a 14% year-on-year increase in the states’ revenue with FY15-16 revenue collection taken as the base year.
As for the Centre, the shortfall is around 20% now. Answering a question on whether the GST revenue target would be met by the government, Jaitley said, “Currently, we are in the middle of the year and there is festival season coming. We will try and come as close to the target.” He added that the government was ahead of the target on direct tax mop-up, which would help meet the fiscal deficit target.