Kolkata, May 13 () The industry bodies and leadingbusinessmen in West Bengal on Wednesday lauded the financialpackage and policy interventions announced by the Centre, torevive the country's economy, which has been severely hit dueto the coronavirus-triggered lockdown.The turnover-based definition of MSMEs has addressed along pending demand and extended the benefits to a largenumber of companies, city-based Indian Chamber of Commercesaid in a statement.Finance Minister Nirmala Sitharaman announced Rs 3lakh crore of collateral-free loans for small businesses, acut in the tax rate for non-salary payments and measures toprovide liquidity to non-banking companies to help them tideover the disruptions caused by the lockdown."The Rs 3 lakh crore government guaranteed loans tothe liquidity-starved MSMEs would go a long way in stabilisingand strengthening the sector," the industry body said.The power distribution companies, which are facingunprecedented cash flow problem, will be benefited from theemergency liquidity injection to the tune of Rs 90,000 crore,it said.City-based Merchants' Chamber of Commerce presidentVivek Gupta also hailed the Centre for new defenition ofMSMEs."Hope MSMEs will be fully able to extract benefitsfrom the implementing institutions," he said.Bandhan Bank MD and CEO, C S Ghosh, said, "Thespecial liquidity and partial credit guarantee schemes forNBFCs, HFCs and MFIs will ultimately benefit the endconsumers, many of who are in the rural and semi-urban areas."Praising the stimulus package, Village FinancialServices MD and CEO Kuldip Maity said the microfinanceinstitutions have been facing a tough time due to significantcash flow issues."The liquidity infusion measures will help combat therising stress in the sector and eventually, cater to the needyborrowers who are in search of emergency loans to resume theirbusiness operations," he said.Welcoming the package unveiled by the Centre,Engineering Export Promotion Council of India Chairman RaviSehgal said, "Infusion of liquidity through debt and evenequity into the MSMEs is a major step forward."Real estate developers on Wednesday said thegovernment's decision to extend the timeline of completion ofprojects by six months will provide much needed relief to theindustry but sought more measures to improve liquidity, reduceinput cost and boost housing demand.Credai West Bengal President Sushil Mohta appreciatedthe declaration of Covid-19 as "Force Majure" that will givethe "real estate sector some breather"."The sector is very important for restarting theeconomic activities. There is much more to be done. We areexpecting a reduction in interest rates," Mohta said. BSMBDC BDC

Bengal Inc lauds special package to revive economy

<ul><li>Following the <keyword id="28504" type="LOCATION" weightage="20" keywordseo="Kerala">Kerala</keyword> <keyword id="48088" type="COMPANY" weightage="20" keywordseo="floods">floods</keyword> in late August, it was found that the National <keyword id="41418" type="PERSON" weightage="20" keywordseo="Disaster">Disaster</keyword> Relief Fund (NDRF) was insufficiently capitalised to finance relief efforts. </li><li>In light of this, the Indian government has instituted a panel, comprising several state finance ministers, to assess the feasibility of introducing a “natural disaster tax” under the <keyword id="6354679" type="DEFINITION" weightage="20" keywordseo="gst">GST</keyword> regime. </li><li>It remains to be seen whether the <keyword id="6386887" type="UNKNOWN" weightage="20" keywordseo="cess">cess</keyword> would be a state-level or national-level <keyword id="45031" type="PERSON" weightage="20" keywordseo="Tax">tax</keyword> and whether it would imposed on a specific set of items or all items. A questionnaire will be sent to all states to get their views on the same. </li></ul>In the aftermath of the Kerala floods in late August, in which close to 500 people died and the damages were estimated to be around ₹200 billion, a major criticism was levied at the central government’s slow release of aid funds. It was found that the National Disaster Relief Fund (NDRF) and State Disaster Response Fund (SDRF) were insufficiently capitalised. In addition, the process of applying for and receiving aid from the corpus fund is extremely <a href="https://www.business-standard.com/article/current-affairs/flood-ravaged-kerala-s-wait-for-full-central-aid-package-could-be-long-118082700019_1.html">time-consuming</a>. The NDRF is funded by a “National Calamity Contingent Duty” on tobacco products and similar items. However, after the imposition of GST last year, the contributions to the fund have been declining. In light of this, the Indian government has instituted a panel, comprising several state finance ministers, to assess the feasibility of introducing a “natural disaster tax” under the Goods and Services Tax (GST) regime. The panel, which is led by Bihar deputy CM Sushil Kumar Modi, is set to consult India’s attorney general, K. K. Venugopal, on the legal implications of levying a disaster tax to fund the recovery efforts of states that have been struck by natural disasters. Under the GST Act, states are allowed to charge a cess in the event that they suffer losses of revenue due to the implementation of the GST regime. A disaster cess would require the approval of an apex court. The GST Council decided to form the panel <a href="https://www.ndtv.com/india-news/gst-council-meets-to-consider-new-tax-for-kerala-flood-future-calamities-1923718">at the end of September </a>following a proposal from the government of Kerala to impose an additional 10% cess on specific goods sold in the state so as to fund reconstruction and rehabilitation. At the time, the central government said that the Kerala’s proposal would be difficult to implement given the absence of any tax credits on cesses. It remains to be seen whether the cess would be a state-level or national-level tax and whether it would imposed on a specific set of items or all items. A national-level tax under the GST regime seems more likely after the panel recognised the possibility that residents of Kerala would opt for large purchases outside the state so as to avoid paying the additional cess. A questionnaire will be sent to all states so as to establish a majority consensus on the above issues. The panel’s next meeting will be in November.

India is mulling the introduction of a “natural disaster tax” to fund relief efforts

In what is one of the biggest reductions since <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> came into effect from July 1, the <keyword id="6355040" type="ORGANIZATION" weightage="20" keywordseo="GST-Council">GST Council</keyword> has today reduced <keyword id="6403501" type="PERSON" weightage="20" keywordseo="tax-rates">tax rates</keyword> on more than 175 items. The council, which is currently meeting in Guwahati, has decided to cut keep only 50 luxury and 'sin’ goods like tobacco in the highest slab. Meanwhile, tax rates have been slashed from the existing 28% on a host of consumer items such as chocolates, chewing gum, shampoo, deodorant, shoe polish, detergents, nutrition drinks, marble and cosmetics. "Only 50 items will face 28% rate," Bihar finance minister Sushil Modi told reporters on the sidelines of the ongoing Council meet. "There were 227 items in the 28% slab. The fitment committee had recommended that it should be pruned to 62 items. But the GST Council has further pruned to more items. Now all types of chewing gum, chocolates, preparation for women cosmetics, shaving and after-shave items, deodorants, washing powder detergent and granite and marble. All these items have been put in the 18% category," Modi said. Paints, cement have been retained at 28%. Luxury goods such as washing machine and air conditioners will still be taxed at 28%. The tax cuts will have a revenue implication of about Rs 20,000 crore. Even as there is a consensus that slowly, the 28 per cent slab should be brought to 18 per cent, the council is still skeptical because of a huge revenue implication. In the next few hours, the Council is expected to take crucial decisions to make composition scheme more attractive, improve compliance burden, and it may explore the possibility of including real estate under GST.

Only 50 luxury and 'sin' items find their place in GST's highest slab

MUMBAI: For over a year, promoters and executives of power companies and their lenders had sleepless nights, wondering what the <keyword id="6354977" type="ORGANIZATION" weightage="100" keywordseo="Supreme-Court">Supreme Court</keyword> would decide about coal blocks allotted to them. 
 
On Wednesday, their worst fears came true when the apex court cancelled all but four of the 218 coal blocks allocated since 1993. While industry experts lauded the verdict as a precursor to coal sector reforms, the nightmare for the power companies isn’t over yet. 
 “We are relieved that the uncertainty is over. But now where do plants attached to these mines get coal from? What happens to the expenses already incurred? The government needs to give clarity on the modus operandi,” said Sushil Maroo, a director of Essar Energy and CEO of <keyword id="6440383" type="COMPANY" weightage="80" keywordseo="Essar-Power">Essar Power</keyword>. The company stands to lose three coal blocks. 
 
Companies had expected the court to take a more lenient view on the 40 coal mines that had started operations and not cancel them. Instead, the court gave companies with operational mines six months to transfer their assets to the government. 
 “This move will have an extremely negative impact on power, steel and cement companies as an issue that is almost 21 years old is being addressed now and a lot of <keyword id="6362476" type="ORGANIZATION" weightage="80" keywordseo="investments">investments</keyword> have gone into these blocks, which will now get impacted. Most companies will have no option but to bid in the new round of auctions as one cannot only depend on imported coal,” said Issac George, Group Chief Financial Officer at GVK Power &amp; Infrastructure, which had been allotted two blocks. 
 
 
 
The power sector has already investedRs 2,86,677 crore toward exploration, mining and end-use projects, equivalent to almost 3% of the GDP. 
 
Coal-based projects represent about 59% of India’s total installed power generation capacity. Apart from the cancellation, operational mines will have to pay a penalty of Rs 295 for every tonne of coal extracted since they started. 
 
This will aggravate the finances of power companies, which are already grappling with stretched balance sheets. 
 
“The penalties imposed by the Supreme Court are very exacting and will take a big toll on the finances of some of these companies. How will the companies cough up this kind of cash without seriously compromising their cash flows or indebting themselves further?” George of GVK asked. 
 
According to Citigroup, the other grey area is how production and sale of coal will be affected when Coal India takes over these mines. “Will Coal India be able to produce in the same quantity, and how will sale of that coal happen? Will JSPL get the requisite coal even after Coal India starts operating its mines?” 
 In 2013-14, Coal India produced 462 million tonnes of coal, <keyword id="6357415" type="ENTERTAINMENT" weightage="60" keywordseo="missing">missing</keyword> the target of 482 million tonnes. The coal ministry anticipates that local supplies will fall as much as 185 million tonnes short of the country’s projected demand of 950 million tonnes in 2016-17. The gap could widen if the cancelled mines don’t produce the projected volumes of coal.

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Bengal Inc lauds special package to revive economy

PTI

India is mulling the introduction of a “natural disaster tax” to fund relief efforts

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Only 50 luxury and 'sin' items find their place in GST's highest slab

BI India Bureau

Coalgate Verdict: Worst Fears For Power Companies Come True

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