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New Delhi, Jun 15 () Industry chamber FICCI's arm on Monday said several cases of seizures by enforcement agencies of smuggled imported cigarettes reported in the last few months indicate a spike in cigarette smuggling during the coronavirus-induced lockdown. FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy), said the seizure of foreign brand cigarettes worth Rs 11.88 crore from a container at Jawaharlal Nehru Port Trust (JNPT) in Navi Mumbai on June 12, by the Directorate of Revenue Intelligence (DRI) is one of the biggest seizures since lockdown. "The trend is nationwide, with seizures intercepted via road transport, in cargo and passenger luggage," FICCI CASCADE said in a statement. Expressing concern FICCI CASCADE Chairman Anil Rajput said, "cigarette smuggling is a big racket across the globe and India continues to remain a hot bed for this menace. Even as the country is grappling with the coronavirus crisis, the seizures of such goods remain high." Citing a recent study, FICCI CASCADE said while cigarette smuggling has now become highly lucrative activity, it has caused 3.34 lakh job losses and urged for more active vigilance. RKL DRR DRR

Spike in cigarette smuggling during COVID-19 lockdown: FICCI CASCADE

New Delhi, Jul 15 () Industry chamber FICCI's arm on Wednesday said illicit trade has emerged as one of the most formidable challenges before the nation, especially during the current coronavirus pandemic which has led to an economic distress. FICCI's Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE) said several cases of smuggling of goods such as gold, cigarettes, liquor have been reported amid the COVID-19 pandemic. "The perpetrators of illicit trade are always looking at innovative ways to deceive the system to carry out their activities. This deeply harms the economic interests of the nation and the society ends up paying a huge cost," FICCI CASCADE Chairman Anil Rajput said in a statement. Asking policy makers to treat illicit trade as a "national threat", FICCI CASCADE said, "illicit trade has emerged as one of the most formidable challenges before our nation, especially during the current pandemic which has led to an economic distress." Citing instances of the recent seizures of smuggled cigarettes at New Delhi Railway station, Mumbai and Hyderabad; and gold in Kerala, FICCI CASCADE said, "not only does smuggling dent the government exchequer, by creating opportunities from tax arbitrage, but also threatens local industries on which livelihoods of many depend." Rajput said while the recent efforts of enforcement officers are laudable, the government cannot afford to let the guard go down. "At a time when the country is already dealing with the coronavirus triggered financial stress, it is even more important that the government maintains strict vigil to ensure that these offenders are kept at bay," he said. RKL DRR DRR

Sharp spike in smuggling of goods amid COVID-19 pandemic: FICCI CASCADE

<ul><li>The FMCG industry-household and personal goods and packaged foods together account for 75% of the total value of illicit goods in <keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword>. </li><li>The Indian government has suffered a $7 billion loss due to the counterfeit market in 2019-2020. </li><li>The illicit market drains $2.2 trillion from the global economy. </li></ul><keyword id="169120" type="General" weightage="50" keywordseo="sanjiv-mehta" source="Orion">Sanjiv Mehta</keyword>, the chairman of HUL said on Thursday that counterfeiting and smuggling of goods should be treated as serious criminal offenses in India. He batted for civil action against grey imports during the launch of a <keyword id="6355001" type="General" weightage="100" keywordseo="ficci" source="Orion">FICCI</keyword> report on India’s illicit market. “India is an official signatory to the <keyword id="126959" type="General" weightage="50" keywordseo="world-trade-organization" source="Orion">World Trade Organization</keyword> and there should be a civil action against grey imports. Even though the quality of packaging has improved and the supply chain is agile once again, the dark web is still being used for counterfeit trade. A lot of illicit products are also coming from China, “ said Mehta who is also the president of industry body FICCI. The report titled ‘Illicit markets: A threat to National Interests’ says that India’s illicit market, spread across five key industries, has cost India 3 million jobs. The government has suffered a $7 billion loss due to the counterfeit market in 2019-2020, said the report which was released by former Vice President of India, <keyword id="74369" type="General" weightage="50" keywordseo="venkaiah-naidu" source="Orion">Venkaiah Naidu</keyword>. “You can change your friends but not your neighbours,” said Naidu, referring to illicit imports from China. Counterfeiting, smuggling and tax evasion-clubbed under the head of organized crime, together comprise grey or Illicit markets. According to the <keyword id="69007" type="General" weightage="50" keywordseo="world-economic-forum" source="Orion">World Economic Forum</keyword>, the global illicit market drains $2.2 trillion from the global economy, taking over 3% of the global GDP. Size of illicit market in India The report pegs the size of India’s illicit market at ₹2.6 lakh crore. The FMCG industry, household and personal goods and packaged foods together account for 75% of the total value of illicit goods in India. The other four industries with the highest number of illicit goods were FMCG packaged Foods (25%), tobacco products (20%), alcoholic beverages (19.8%) and mobile phones (7.56%). “The impact of the illicit market of these industries on the economy is significant because of the backward linkages of these industries with other sectors of the economy resulting in a multiplier effect,” said FICCI. The report said that the counterfeiting in mobile phones is declining because of the Make in India campaign. India has also become the second largest mobile phone manufacturing nation globally in volume terms, it said. “The highest counterfeit product comes from FMCG household and personal goods with products from small and medium enterprises more. Even though tobacco consumption has dipped, its illicit market remains the same and the loss to the government is highest since it is the most heavily taxed,” said Kaushik Dutta, Director <keyword id="1493665" type="General" weightage="50" keywordseo="thought-arbitrage-research-institute" source="Orion">Thought Arbitrage Research Institute</keyword> (TARI). The report was prepared by TARI for FICCI Committee Against Smuggling and Counterfeiting Activities (CASCADE). Supply disruptions and illegal trade Affected by global supply disruptions amid the Covid-19 pandemic, criminals were provided with multiple opportunities for creating illicit markets. Even though alcohol consumption has gone down, its share in the illicit market still is 20% as there are high regulatory and tax barriers. “Boost of Jago <keyword id="15056440" type="General" weightage="50" keywordseo="grahak-jago" source="Orion">Grahak Jago</keyword> is the need of the hour. Awareness without action is worthless. Consumer led movement is crucial in India now. Counterfeit products won't exist if consumers reject them. Each time an illicit product is purchased, the country is cheated out of revenue. Only when genuine goods are produced, does the nation become tax compliant,” said <keyword id="2135047" type="General" weightage="50" keywordseo="anil-rajput" source="Orion">Anil Rajput</keyword>, chairman of FICCI CASCADE. Jago Grahak Jago (Wake Up Customer) was launched in 2005 by the government of India to make customers in India more aware of consumer rights. The report was prepared using the Annual Survey of Industries, <keyword id="159764" type="General" weightage="50" keywordseo="nsso" source="Orion">NSSO</keyword> survey, Private Final Consumption Expenditure (PFCE) under the Ministry of Commerce India. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sustainability/news/tribal-women-in-mayurbhanj-odisha-tie-rakhis-to-trees-for-protection-from-illegal-felling-and-forest-fires/articleshow/94371649.cms">Tribal women in Mayurbhanj, Odisha tie 'rakhis' to trees for protection from illegal felling and forest fires</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/news/which-zodiac-signs-do-the-biggest-billionaires-belong-to/articleshow/94372790.cms">Which Zodiac signs do the biggest billionaires belong to?</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/the-adani-effect-ambuja-cements-rallies-40-in-one-month-analysts-suggest-good-days-ahead-for-the-cement-industry/articleshow/94366341.cms">The Adani effect: Ambuja Cements rallies 40% in one month – analysts suggest good days ahead for the cement industry</a>

India’s illicit market has resulted in loss of 3 million jobs: FICCI

New Delhi, Dec 17 () Ahead of crucial GST Council meet on Wednesday, industry body FICCI's arm made a case for maintaining GST rate on tobacco products at present level saying any increase would lead to rise in smuggling and will adversely impact domestic industry.
 Currently, GST rate on these products are 28 per cent while cess varies between 61 to 204 per cent.
 FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) said various agencies seized illicit cigarette worth about Rs 18 crore so far this year.
 It said that there has been spurt in smuggling due to increase in tax in the past few years. The illegal cigarette trade has more than doubled from 12.5 billion sticks in 2005 to 26.5 billion sticks in 2018.
 "We must also remember that a higher tax rate provides greater incentive for evasion," said P C Jha, former Chairman, Central Board of Indirect Taxes and Customs and Advisor, FICCI CASCADE.
 "It is therefore necessary that legal products are made available at affordable prices, and it is in our best interest that we take a serious look and rationalise the tax structure on cigarettes, and do not allow anti-social elements to make deep inroads in our country," he said.
 Jha said the impact of smuggling on India's legal cigarette industry is massive. Citing a report, he said it continues to face an uphill task as penetration of illicit cigarettes in India has now reached a whopping 24.3 per cent.
 With GST collection under pressure, there is demand for raising rates on certain items and also cess to meet the shortfall.
 However, experts are of view that further increase in GST rates would fuel inflation, which is on the rise for past few months.
 Both Centre and States are expected to arrive at a decision which can boost revenue without hurting inflation.
 The Central GST collection fell short of the Budget Estimate by nearly 40 per cent during the April-November period of 2019-20, according to government data.
 The actual CGST collection during April-November stood at Rs 3,28,365 crore, while the Budget Estimate was Rs 5,26,000 crore for these months. DP DRR

FICCI CASCADE for status quo on GST rate on tobacco products to check smuggling

<keyword id="2974268" type="UNKNOWN" weightage="80" keywordseo="Illicit-market">Illicit market</keyword>, with respect to seven sectors of the <a href="http://www.businessinsider.in/searchresult.cms?query=manufacturing">manufacturing</a> industry, had led to a loss of Rs 32,239 crore to the exchequer during 2014, according to a report released by <a href="http://www.businessinsider.in/searchresult.cms?query=FICCI">FICCI</a>. 
 The <keyword id="6355001" type="CITY" weightage="80" keywordseo="FICCI">FICCI</keyword> report prepared by its Committee Against Smuggling and Counterfeiting Activities Destroying the <keyword id="34412" type="ORGANIZATION" weightage="80" keywordseo="economy">Economy</keyword> and titled “Illicit Market: A Threat to Our National Interest” released said the loss was inclusive of both indirect and <a href="http://www.businessinsider.in/searchresult.cms?query=direct+taxes+">direct taxes</a> -- Rs 34,020 crore and Rs 5,218 crore, respectively. 
 
According to the report, there was a loss of Rs 26,190 crore in 2012. 
 FICCI released its nine sector report titled 'Illicit Market: A Threat to Our National Interest' in Guwahati on Tuesday. This is a quantitative study evaluating the impact of illicit markets on various economic aspects of the <keyword id="6362048" type="ORGANIZATION" weightage="80" keywordseo="Manufacturing">manufacturing</keyword> industry, including sectors like <a href="http://www.businessinsider.in/searchresult.cms?query=FMCG">FMCG</a>, packaged foods and personal goods, computer hardware, automobiles, mobile phones, tobacco &amp; alcohol, and media and entertainment industry. 
 
The study found that the revenue loss to the <a href="http://www.businessinsider.in/searchresult.cms?query=central+government+">central government</a> due to illicit trade increased 49.8% to Rs 13,049 crore from 2011-12 to 2013-14. 
 
Amongst the various sectors, the maximum revenue loss was from counterfeiting and illicit trade is tobacco products—23% and Rs 9,139 crore. 
 When it comes to states, <keyword id="6354915" type="CITY" weightage="100" keywordseo="Assam">Assam</keyword> saw a significant growth in illicit trade in these sectors in the last couple of years. It was one of the fastest growing markets for illegal cigarettes and alcohol in the country. 
 
In 2014, illegal cigarettes accounted for more than 25% of the total cigarette market in the state. 
 
Assam's illegal market for alcohol too grew significantly in value terms, especially for IMFL and imported liquor. 
 "During the last twenty years, the volume of the counterfeiting activity has increased 100 times and the size of trade in counterfeited goods is 10% of the legal <keyword id="35028" type="ORGANIZATION" weightage="80" keywordseo="international-trade">international trade</keyword> (around 2% of the world's overall economic output)," said PC Jha, adviser, <keyword id="2974267" type="PERSON" weightage="60" keywordseo="FICCI-CASCADE">FICCI CASCADE</keyword>, and former chairman of the <keyword id="514301" type="ORGANIZATION" weightage="80" keywordseo="Central-Board-of-Excise-Customs">Central Board of Excise &amp; Customs</keyword>. 
 
Deep Chand, advisor to FICCI CASCADE and former Special Commissioner of Police, New Delhi, said: "In the past few decades, leading intelligence and law-enforcement agencies around the world have found conclusive evidence of the increasing involvement of terrorist organizations in counterfeiting, piracy and smuggling activities to fund their activities…The need of the hour is tangible actions to increase enforcement and to impose increased punishments." 
 
The study said that high state-level taxes like VAT and imposition of health cess on the legal cigarette industry is resulting in high prices for legal cigarettes, and this is the key reason for such an alarming growth of illegal cigarette industry in the state. 
 
Most of the manufacturers of such illegal <a href="http://www.businessinsider.in/searchresult.cms?query=cigarettes+">cigarettes</a> (mostly based in the surrounding states and in some northern states) evade the high central <keyword id="6356916" type="UNKNOWN" weightage="80" keywordseo="excise-duty">excise duty</keyword> and state taxes/cess and thus are able to offer their products to consumers at rock-bottom prices. Price of an illegal cigarette pack in Assam is a fifth of the price of a legal packet. 
 
According to the study, smuggled international contraband cigarettes contribute significantly to the alarming growth of the illegal cigarette industry in Assam. Assam shares a porous international border with Bangladesh. In addition, other states in the north-east also share a similar border with Myanmar, Bangladesh and China. Therefore, there is a sizeable influx of cheap king-sized smuggled cigarettes from across the border into Assam. 
 
These smuggled cigarettes are transported from Assam and other north eastern states to the rest of the country by air, bus and train, the report said. 
 
"Such illegal cigarettes defeat the tobacco control objectives of the government as they neither bear any health warnings required as per Indian laws nor have other mandatory declarations like MRP, date of manufacture or place of Manufacture. High VAT compared to the rest of the country and the recent imposition of health cess on cigarettes have also resulted in large-scale diversion of the cigarettes trade into the state," the report pointed out. 
 
(Image: Indiatimes)

Over Rs 39, 000 crore loss to exchequer in 2014 all thanks to illicit trade!

New Delhi, Dec 1 () Rival industry associations CII and FICCI have closed ranks and written to Finance Minister Nirmala Sitharaman seeking relief for telecom companies that have been ordered by the Supreme Court to pay Rs 1.47 lakh crore in past statutory dues, in an apparent attempt to counter billionaire Mukesh Ambani-run Jio's narrative on the issue.
 While Jio has been strongly opposing a bailout of telecom companies at taxpayers' expense saying they had "sufficient" financial capacity to pay dues, CII and FII president's have in separate letters asked Finance Minister to address "precarious" financial position of telcos saddled with a debt of Rs 7 lakh crore and ensure robust competition for vibrancy in the sector.
 CII president Vikram Kirloskar in the November 19 letter sought revisting the current revenue-sharing business model - where the government is paid a predecided share out of the income generated from using scarce natural resource, and replace it with "competitive and transparent" model that also "address the possible adverse impacts on banks" having exposure to sectors with such business model.
 FICCI president Sandip Somany wrote to Sitharaman on the issue on November 27, which was first reported by on Friday.
 "The recent developments on the Adjusted Gross Revenue (AGR) dues of Telecom Service Providers (TSPs) , have triggered a great deal of concern not only to the seriously-affected TSPs, but also amongst others who are part of the overall telecom eco-system. 
 "The precarious financial health of key players in this sector and their massive debt burden (estimated to be Rs 7 lakh crores), threaten not only their individual existence but also the much-needed vibrancy in this sector of national importance," Kirloskar wrote.
 The Supreme Court on October 24 upheld the government position that non-telecom revenue should be included in calculating AGR, a percentage of which is paid to the exchequer as statutory dues. Telcos such as Bharti Airtel and Vodafone Idea were asked to pay Rs 1.47 lakh crore in past dues within three months.
 "In this context, CII urges the Government to consider addressing the situation in a manner which continues the robust competition in the industry and ensures further investments in infrastructure for new technologies," the November 19 letter said.
 It went on to say that telecom services are a 'raw material' for the rest of the economy serving as a productivity-enhancer for many other sectors. "A robust vibrant ecosystem of TSPs is critical for some of the key nation business initiatives of the government of India, including the drive towards a less cash-based economy and the larger Digital India programme. In essence, a vibrant telecom sector is in the national interest."
 "CII urges the government to continue with its policy of encouraging healthy competition in the telecom sector with at least 3-4 strong players, and work towards addressing the issues facing the sector with that prespective. This is essential in the national interest and the interest of the consuming masses," it said.
 FICCI in the letter had stated that the apex court ruling not just lead to the collapse of the telecom sector but will also have a cascading effect on several other sectors including power, steel and railways.
 It urged Sitharaman's urgent intervention to resolve woes in the telecom sector saying the debt-ridden industry has no appetite left to invest in networks and future technologies.
 "...As you are aware, currently the sector is saddled with a massive debt and has almost no appetite to invest in networks and future technologies. Adding further woes to the sector, the recent ruling on the AGR, dues of the telecom service providers will lead to an unfortunate and disastrous collapse of the already battered sector," the letter said. ANZ MR
MR

Jio boxed into corner; CII, FICCI join cause to seek relief for telcos

New Delhi, Nov 29 () The Supreme Court ruling on adjusted gross revenue will not just lead to the collapse of the telecom sector but will also have a cascading effect on several other sectors including power, steel and railways, according to industry chamber FICCI. 
The Federation of Indian Chambers of Commerce and Industry (FICCI) in a letter to Finance Minister Nirmala Sitharaman seeking her urgent intervention to resolve woes in the telecom sector said the debt-ridden industry has no appetite left to invest in networks and future technologies while businesses across the world are exploring new opportunities around emerging technologies like 5G, artificial intelligence and internet of things. 
"Given the multiplier impact the (telecom) sector has on the economy and various intermediary industries, it is of critical importance that the sector remains healthy, dynamic and vibrant," FICCI said.
The Supreme Court On October 24, 2019 upheld the government's way of calculating telecom revenue, on which licence fee and spectrum usage charges are computed.
As per the initial calculations, access players like Airtel, Vodafone Idea and other operational telecom operators may have to pay the government a whopping Rs 1.33 lakh crore within three months.
Telecom Minister Ravi Shankar Prasad in Parliament last week said that there is no proposal before the government at present on waiver of penalties and interest on outstanding licence fee payments based on adjusted gross revenue (AGR), or on extending the timelines for telcos to pay up their statutory dues.
"This ruling will have a cascading effect and will severely impact many other companies in multiple sectors such as internet service providers, satellite communications providers, cable operators and even companies in power, steel and railways sector," FICCI said. 
According to internal estimate of the Department of Telecom, telecom companies which are operational at present will have to cough up around Rs 1.33 lakh crore by January 2020 as per the apex court order.
This is beyond the total debt on the telecom sector estimated to be around Rs 7.87 lakh crore as on August 2017.
"...As you are aware, currently the sector is saddled with a massive debt and has almost no appetite to invest in networks and future technologies. Adding further woes to the sector, the recent ruling on the AGR, dues of the telecom service providers will lead to an unfortunate and disastrous collapse of the already battered sector," the letter said.
Both Bharti Airtel and Vodafone Idea have expressed uncertainty on continuing their operations following the apex court judgement and in the absence of relief from the government. 
Vodafone Idea posted an unprecedented loss of 50,922 crore-- highest ever by any corporate in Indian Inc and Bharti Airtel posted it highest loss of Rs 23,045 crore in the second quarter of current fiscal. 
Reliance Communications posted Indian Inc second biggest loss of Rs 30,142 crore following the apex court judgement. 
"At a time when the world is witnessing the advent of new possibilities and business opportunities from emerging technologies such as 5G, AI, IoT, etc which will redefine the way businesses and economies will work in the coming decades, it is important that India retains its leadership position in the telecom space," the letter said. 
The industry body called for change in policy saying that timely intervention and support will not only save the sector from the brink of collapse but ensure a healthy growth adding to the economic momentum of the country. 
 The government recently doled out a Rs 42,000 crore relief to debt-laden telecom companies after it agreed not to take any payments for spectrum they use for the next two years.
The Union Cabinet approved giving Bharti Airtel, Vodafone Idea Ltd and Reliance Jio an option to avail of a two-year moratorium on payments they were supposed to make in yearly installments for the spectrum bought in auctions.
While the move will give Rs 42,000 crore relief to Bharti Airtel, Vodafone Idea and Reliance Jio, the government is unlikely to intervene in the Supreme Court-mandated statutory payments, top sources said. PRS MKJ

Supreme Court's AGR ruling will lead to telecom sector's collapse: FICCI to FM

As the <a href="http://www.businessinsider.in/searchresult.cms?query=Indian+government" target="_BLANK￿￿￿￿">Indian government</a> is all set to levy its <keyword id="2692614" type="UNKNOWN" weightage="20" keywordseo="Swachh-Bharat-cess">Swachh Bharat cess</keyword>, the Indian Inc says it is not ready for it yet. 
 
The government, in its <a href="http://www.businessinsider.in/searchresult.cms?query=union+budget" target="_BLANK￿￿￿￿">Union Budget</a>, had announced that a cess of up to 2% would be levied to fund <a href="http://www.businessinsider.in/searchresult.cms?query=prime+minister+narendra+modi" target="_BLANK￿￿￿￿">PM Narendra </a><a href="http://www.businessinsider.in/searchresult.cms?query=prime+minister+narendra+modi" target="_BLANK￿￿￿￿">Modi</a>’s pet campaign ‘<keyword id="2517872" type="UNKNOWN" weightage="20" keywordseo="Swachh-Bharat-Abhiyan">Swachh Bharat Abhiyan</keyword>’. 
 
The 0.5% cess on all taxable services was notified by the Centre. 
 
"It may be seen that all issues relating to Swachh Bharat cess are addressed in the service tax provisions itself by virtue of the applicability of Chapter V of the Finance Act, 1994, and the rules made thereunder," the finance ministry stated. 
 But, the Indian industry says this is against the PM’s claims of <keyword id="6354423" type="UNKNOWN" weightage="20" keywordseo="Ease-of-Doing-Business">ease of doing business</keyword> in India and also sought clarity on certain issues. 
 
Also, the <a href="http://www.businessinsider.in/searchresult.cms?query=ficci" target="_BLANK￿￿￿￿">Federation of Indian Chambers of Commerce &amp; Industry</a> (<keyword id="6355001" type="CITY" weightage="20" keywordseo="FICCI">FICCI</keyword>) said the eight day's notice was too short and that the cess should be implemented from January. 
Experts in India Inc say that changing billing system in the middle of the month, especially in festive season, will prove to be difficult. 
 
The <a href="http://www.businessinsider.in/searchresult.cms?query=cii" target="_BLANK￿￿￿￿">Confederation of Indian Industry</a> (CII) also asked if the cess would be creditable. 
 Meanwhile, India Inc said the cess should have been levied in line with the Goods &amp; Services Tax (<keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword>). 
 
Even telecom operators voiced the same concern and asked for a delay. 
 
“There is no clarity whether credit of Swachh Bharat would be available as in the case of service tax. In case the credit is not available, the net incidence of the cess would be higher than 0.5% on services on account of cascading. Similarly, the cess would also impact the price of goods as there would be an incidence of cess on input services,” Bipin Sapra, partner, EY, told ET. 
 
Also, the value and rate is unclear, what the effective rate of tax would be for services that are taxable at an abated rate. 
 
The finance ministry explained that the taxable value for the levy of Swachh Bharat cess would be the same on which service tax is levied. 
 
“The cess would be calculated on abated value or value arrived at under service tax. On the issue of point of taxation, the statement said norms laid down in Rule 5 would apply. Therefore, in case where payment has been received and invoice is raised before the service becomes taxable, i.e., prior to November 15, 2015, there is no liability of Swachh Bharat cess,” stated the finance ministry. 
 
(Image: Indiatimes)

India Inc wants deferment in Swachh Bharat cess, says it will affect ease of doing business

New Delhi, Dec 5 () Oil Minister Dharmendra Pradhan on Thursday hoped that Finance Minister Nirmala Sitharaman will signal the inclusion of jet fuel and natural gas under the ambit of GST to reduce multiplicity of taxes and improve the business climate.
 When the Goods and Services Tax (GST) was introduced on July 1, 2017 amalgamating 17 central and state levies, five commodities namely crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) were kept out of its purview given the revenue dependence of state governments on this sector.
 "Our expectation is that in the coming Budget, ATF and natural gas is included in GST," he said at a FICCI conference here.
Finance Minister is scheduled to present the Union Budget for 2020-21 fiscal on February 1.
 Including ATF and natural gas will not just help companies set off tax that they paid on input but will also bring about uniformity in taxation on the fuels in the country.
 Including natural gas in GST is said to be one of the biggest drivers of not just consumption but will also incentivize producers to spend more on finding and producing more gas as well as incentivize importers to bring in more LNG.
 ATF makes up for almost half of the cost of an airline and rates vary from state to state depending on local VAT.
 A uniform GST would also push the usage of environment-friendly natural gas, whose share in the energy basket the government wants to increase to 15 per cent by 2030 from current 6.2 per cent.
 Pradhan has been making a case for the GST Council - the highest decision-making body of the new indirect tax regime - to take a decision in favour of these two fuels at the earliest.
 The Council is headed by Union Finance Minister and comprises representatives of all states and union territories.
 Under the existing structure, both natural gas and ATF attract the Centre's excise duty and a state's value-added tax (VAT). Both these and all other levies will get subsumed under GST if they are brought under its ambit.
 The decision on their inclusion depends on the financial position of states as revenues from these five petroleum products constitute a substantial chunk of state government finances.
 Barring a few, most of the states are incurring revenue shortfall as GST subsumed a dozen of their taxes, introducing the single levy, in a bid to simplify taxation system and remove the cascading effect of 'tax on tax' in the country.
 According to the industry, keeping ATF and natural gas out of the GST net was increasing the cost of these products as a tax on inputs is not being credited against the sale of these products, which ultimately, adds to the cost of production.
 The aviation ministry has time and again sought inclusion of ATF under GST as any surge in international oil rates gets reflected in domestic jet fuel prices, leading to costlier air tickets.
 Natural gas is widely used as industrial input by a variety of industries - from power to steel - and it coming under GST would help eliminate the cascading impact of taxes, bringing down prices of CNG and piped natural gas. ANZ ANZ ANU
ANU

Pradhan hopes coming Budget will signal inclusion of ATF, natural gas in GST

New Delhi, Feb 3 () Finance Minister Nirmala Sitharaman on Monday said the money raised through disinvestment will be used to develop infrastructure, which will have multiplier effect on the economy and not bridging revenue deficit.
The government set an ambitious disinvestment target of Rs 2.10 lakh crore for the next financial year, which includes selling stake in BPCL and insurance behemoth Life Insurance Corporation of India (LIC).
"We are showing clearly where each monies being raised will go. So, it's not being raised to fill certain hole in the Consolidated Fund of India. The money being raised from disinvestment will go towards infrastructure.
"We are showing the direction. We are telling you where the money is going to be spent so that you can plan your investments and your investments and your expansion well in alignment with what government does... you will facilitate the government and we will equally facilitate the private sector," she said while addressing industry chamber Ficci here.
Citing an example, she said import of those medical equipment which are not made in India will come at a duty, but duty collected will be utilised to fund creating medical infrastructure in aspirational districts where there are not good hospitals.
She said when the government puts money infrastructure, it has cascading effect and give rise to economic activity.
On criticism of the government selling family silver through disinvestment, she said the money is not going to bridge revenue deficit but for creating infrastructure which has multiplier effect on the economy.
"...money is not going to as fancy as revenue expenditure but going for creating infrastructure for the country which would probably have lot more multiplier effect in terms of economic activity than to keep an inefficient public sector largely. There are some efficient one also that are put on the block," she said.
Recalling the past experience of government fiscal expansion during the global economic crisis, the Finance Minister said the government has learnt from the past experience and decided not to go on the splurge to boost economy.
"If I have to spend that kind of money, yes we are willing to do but we are clearly saying that we shall not repeat the mistakes of splurging whereas the money spent now with clear intention of asset creation, public asset creation...," she said. JD DP CS BAL

Disinvestment proceeds to be used for creating infra for country: FM

India Inc welcomed the passage of the <a href="http://www.businessinsider.in/searchresult.cms?query=gst&amp;sortorder=effectivedate">Goods and Services Tax (GST) Bill</a> in Rajya Sabha and termed it as a milestone achieved after 1991 Economic Reforms. 
 
The India Inc said once implemented, the GST Bill will bring transparency in the system and propel growth of the country. 
 
CII Director General Chandrajit Banerjee said, "GST is expected to remove the cascading effects of various multi-level indirect taxes on goods and services and will subsume most of the country's central and state level duties and taxes, thus making the country a national market.” 
 
READ ALSO: <a href="http://www.businessinsider.in/GST-will-boost-growth-in-India-but-may-miss-April-2017-target-ASSOCHAM/articleshow/53535504.cms">GST will boost growth in India but may miss April 2017 target: ASSOCHAM</a> 
 
Meanwhile, FICCI President Harshvardhan Neotia said GST gives hope for growth and high GDP. 
 
"The cooperation extended by the Opposition to this crucial legislation is the cornerstone of democracy and gives industry a lot of hope on progress of reforms in the country," Neotia said. 
 
Anshuman Magazine, Chairman, CBRE India and South East Asia termed it as a "major tax reform for our economy, which will transform India into a single market". 
 
READ ALSO: <a href="http://www.businessinsider.in/GST-Council-to-walk-a-tightrope-while-deciding-GST-rate-between-18-20/articleshow/53535604.cms">GST Council to walk a tightrope while deciding GST rate between 18-20%</a> 
 
He said the roll out of the indirect tax reform is likely to positively impact the real estate sector. 
 
"GST will facilitate Make in India by making India a unified market, improve competitiveness of Indian businesses and help bring down the prices of goods for consumers by doing away with cascading levels of taxation. In the long run, it will also enhance Government revenue," Harsh Pati Singhania, Director JK Organisation said. 
 
(Image: Reuters)

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