India on track to become top global steel producer

India’s steel output to clock an average annual growth of 8.9% during 2017-21

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Business News : India as a steel bright spot is highly encouraging and is on track to become a top global producer, says an industry body.

According to the latest report from BMI Research, demand from construction, automotive and infrastructure industries continues to accelerate.

The report has put down the sector’s success to the government’s push to raise capacity in order to meet demand from construction, automotive and infra sectors, said the Steel Users Federation of India (SUFI) in a statement today.

SUFI President Nikunj Turakhia said, “In recent years, the Indian steel industry has showcased a progressive output trend y-o-y.”

Being recognised as a “bright spot” is highly encouraging as well as a large responsibility at the same time, he said, adding that with the introduction new steel and anti-dumping policies, India is on the path to become one of the top steel producers.

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The report highlighted that Indian steel giant such as Steel Authority of India Ltd (SAIL) and Tata Steel as the major drivers of such growth.

BMI Research has forecast India’s steel output to clock an average annual growth of 8.9% during 2017-21, higher than 2.9% in 2012-16.

India’s steel output would grow to 128.6 mt by 2021 from 88.4 million tonnes (mt) in 2017 and the country’s share of global steel production will accelerate to 7.7% in 2021 from 5.4% in 2017, it added.

Ahead of the GST Council meeting tomorrow, Turakhia expressed concern over the headwinds faced by the sector. He has also urged the government to relax imposition of GST penalties and prosecution.

SUFI was part of the delegation that recently presented its case on GST to Maharashtra Finance Minister Sudhir Mungantiwar in Mumbai.

The Rs 35,000-cr business of making India GST-ready

Some of the players in the GST race are Payworld, Dell, Tally Solutions

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The past few days have been ‘taxing’ for Pawan Kumar Gupta, in a race against time to become compliant with the requirement for the coming national goods and services tax (GST).
A hardware and bathroom fittings supplier, he’s been zeroing on GST-ready commercial computers and hiring three new accountants, adept with the new intricacies, among other things. A checklist in hand, Gupta is making notes on the things that have to be done before July 1, when GST becomes a reality. Till now, he has spent around Rs 2 lakh in equipping himself for the transition.
National Sample Survey Office (NSSO) data from 2013 say there are around 57.7 million registered small and medium traders. Beside, at least 15 million retailers and hundreds of thousands of offline and online ventures would all come under the new tax net. The money they’d spend for this over the next two years would be over Rs 35,000 crore, say experts.
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In the past eight months, the huge spending potential has created a new sector, of GST enablers. These include providers of computer hardware and software. And, legal, technical and personnel support and services. Every small entity is investing its money to comply with the new regime.
Unlike the value added tax (VAT), say experts, GST is fully computerised, with many layers only professional accountants can understand. So, the demand for computers and skilled personnel will rise.
Competition is already on between hardware companies. “We are eyeing the lion’s share of the market and are prepared with our solutions. We have an outreach programme for traders. We believe we would see immediate returns for the next six months to one year,” said Pankaj Harjai, director of the small and medium business at (read more…)
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GST Council reduces tax rates of 66 items

Council had received representations for 133 items; GST on movie tickets below Rs 100 cut to 18%

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Tax rates on certain kitchen items like pickles and mustard sauce, as well as movie tickets costing up to Rs 100 have been lowered as the Centre and states today reduced levies on 66 items.
Movie tickets costing Rs 100 and below will now attract 18% tax, as against 28% proposed earlier, while those above Rs 100 will continue to attract 28% GST.
Kitchen use items like pickles, mustard sauce and morabba will attract 12% GST, as against 18% proposed earlier. Also, tax rates on cashew nuts have been cut to 5% from 12%.

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The GST Council also decided that traders, manufacturers and restaurant owners with turnover of up to Rs 75 lakh can opt for a composition scheme and pay taxes at the rate of 1, 2, and 5% respectively.
The Council also lowered GST rates on children’s drawing books to nil from 12%. Computer printers will attract 18% tax as against 28% earlier.
GST on insulin and agarbatti has also been lowered to 5%, while school bags will attract tax of 18%.
Tax rate on kajal has been lowered to 18% from 28%.

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 “GST Council has reduced tax rates of 66 items as against representations received for 133 items,” Finance Minister Arun Jaitley told reporters here after the 16th meeting of the GST Council.
Next meeting of the Council will be on June 18, when it will take up lottery taxes and e-way bill.
On the issue of review of GST rate on hybrid cars, it was decided that the council will take it up after considering states’ comments on a detailed paper issued on the matter earlier.

15,080 profitable Indian companies paid no tax in 2015-16

Due to various tax incentives, these firms had an effective tax rate of zero

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Tax incentives allowed 15,080 profit-making Indian companies to have effective tax rates of zero, and in some cases less than zero, in 2015-16, according to an IndiaSpend analysis of the latest available national tax data or more specifically a government analysis called the Revenue Impact of Tax Incentives under the Central Tax System.

The central government introduced a minimum alternate tax (MAT) in the late 1980s to tackle this anomaly, but even MAT has exemptions that appear to have negated its original intent partially: 52,911 companies made profits in 2014-15 and paid no tax, IndiaSpend reported in March 2016.

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Effective tax rates vary across sectors in 2015-16

The effective tax rates of the lowest paying industries (cement, sugar, financial leasing companies), which were in single digits in 2014-15, have increased substantially and all are touching nearly 20%.

These sectors, however, continue to be taxed at lower rates than other industries.

There are interesting contrasts on tax rates of different industries in the same sector:

1.Banking companies paid tax at 40.3% while share brokers/sub-brokers paid tax at 25.1% (both financial services).

2.Courier agencies paid tax at 41.7% compared to transporters who paid tax at 26.4% (both services).

3.Forest contractors paid tax at 37.6% while mining contractors paid tax at 28.2% (both contractors).

4.Drugs and pharmaceuticals paid tax at 24.2%, electronics paid tax at 35.5% (both manufacturing).

 

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Gulf-Qatar rift: What it means for India and the global oil market

Indian market is one where all oil producers would want to be involved, and especially Saudi Arabia

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Business News – To get a sense of some of the developments about Qatar look at this piece of statistic plus a bit of news. According to the US Energy Information Administration, production of shale oil in USA is expected to reach 5.4 million barrels a day in June, its highest level in more than a year. The recovery outpaces estimates for every most month since August last year. The piece of news is the fast expanding relationship of Qatar with India.

Shale has put American capital and labour to work, a huge domestic political dividend, after price of crude oil from Opec nations soared past $49 a barrel since the 14-member countries agreed since November 2016 on a production cut. In this environment, the US juice can begin to sell at about $47 a barrel, given its lower quality but enough to bring more and more of its onshore fields into production. 

It is vital for the the Trump administration to ensure that Opec keeps its production capped. Opec can keep it capped if Iran does not open the tap of its vast reservoir too much and that means both USA and Saudi Arabia should be on the same side of the field. The Saudis can ensure their diktat runs with two of the large oil producers—UAE and Kuwait, both of whose royal families are blood relations of Riyadh. But Qatar isn’t, even though its royal family too hails from the same desert. 

And Qatar’s rise is linked to its suddenly deepening relationship with India. There are reasons for it. The first of those is natural gas which Qatar like Iran has plenty of but Saudi Arabia doesn’t have much of. And countries like India wanting to use their growing economic clout want the gas to flow. There are no Opec-like restrictions on gas prices and it is cheaper. So, if Qatar plays around with its gas reserves and along with Iran dominating its market, there are enough reasons to make the Saudis worried about their politico-economic hegemony getting cut and the USA worried about its domestic recovery.

Qatar in the past three years has become almost a strategic ally for India. The Qatar government has offered to fill up India’s strategic reserves for free in exchange for buying its natural gas and easier access for Doha’s capital into the Indian economy. One of those is the one its kind permission given to Qatar Airways to fly as a domestic airline in India (read more…)

CBI raids NDTV’s Prannoy Roy for 2008 deals with ICICI Bank

Complaint by Quantum alleges Rs 48-cr loss caused to bank to benefit NDTV promoters

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Business News – Officers of the Central Bureau of Investigation (CBI) on Monday raided the residence of senior journalist and co-founder of listed broadcaster New Delhi Television (NDTV) Prannoy Roy and other premises linked to the organisation.
The investigation agency has registered a case against Prannoy Roy, his wife and NDTV co-promoter Radhika Roy, their private firm RRPR Holdings and NDTV India. The First Information Report (FIR) also mentions “unnamed ICICI Bank officials” among the suspects.
Shares of NDTV tanked nearly 7 per cent intra-day. The stock plunged 6.74 per cent to Rs 58.10, a 52-week low, on the BSE during the day. Later, it trimmed some of the losses and ended at Rs 60.45, down 2.97 per cent.
NDTV said it would fight the “witch-hunt”. It called the CBI action an attempt to undermine democracy.
The FIR, which has alleged criminal conspiracy and invoked Prevention of Corruption Act, was based on a complaint by Quantum Securities, a firm run by Delhi-based stockbroker and NDTV shareholder Sanjay Dutt. Dutt, who once shared a close relationship with the Roys, had lodged several complaints against NDTV and its promoters with various agencies, including the Securities and Exchange Board of India and the income tax department.
A statement from the company said: “It is shocking that the CBI conducted searches on NDTV offices and the residence of its promoters without even conducting a Preliminary Enquiry. This is a blatant political attack on the freedom of the press, as sources confirm that under pressure, the CBI has been compelled to file an FIR based on a shoddy complaint by a disgruntled former consultant at NDTV called Sanjay Dutt, who has been making false allegations and filing cases in courts of law with these false allegations. So far, he has not obtained a single order from any of these courts. Legal analysts are astounded that where courts have rejected giving any order in all these years, the CBI conducts raids based on what is a private complaint“.