The Centre has announced the implementation of the much awaited new Remission of Duties or Taxes on Export Products (RoDTEP) scheme from January 1, 2021, but, with the rates of reimbursement yet to be finalised, exporters are worried about how to cost their products and fix prices.
“There is uncertainty for exporters as they will not know how to book their orders without knowing the rates. There is also a lack of clarity on transitional times…we may need to recall some shipping bills already in transit,” Sharad Kumar Saraf, President, Federation of Indian Export Organisations (FIEO) told BusinessLine.
Fieo is set to make a presentation to the Centre this week to point out its concerns and request for early action.
Last year, the Finance Ministry announced the new RoDTEP scheme to replace the popular Merchandise Export from India Scheme (MEIS) from January 1, 2021, as the MEIS was ruled by a World Trade Organisation panel to be against multilateral trade norms.
The Ministry, in a statement issued on December 31, said that the RoDTEP rates will be notified shortly by the Department of Commerce, based on the recommendation of a Committee chaired by G K Pillai, former Commerce and Home Secretary, which will submit its report soon.
“The RoDTEP shall be allowed, subject to specified conditions and exclusions. The notified rates, irrespective of the date of notification, shall apply with effect from 1st January, 2021 to all eligible exports of goods,” the statement said.
As even a target date for announcement of the RoDTEP rates has not been fixed, things are in a greater state of flux. “If a date, say January 31, was fixed for declaration of rates, exporters would have happily waited for a month without complaining,” said Saraf.
Calculating work
The three-member RoDTEP Committee was set up in July 2020 to work out the modalities for calculation of duties/ taxes/ levies, at the Central, State and local level, borne on the exported product, including embedded taxes.
Since the RoDTEP rates are based on actual input taxes paid by each sector at various stages of production, the calculation is proving to be time consuming.
“The government’s announcement on RoDTEP is good news because implementation is from January 1, 2021. But it is a cause of concern as in the absence of rates, exporters will not know how to fix cost of their exports,” said Rafeeque Ahmed, a Tamil Nadu based leather goods exporter.
Ahmed said that the RoDTEP committee has been working in close coordination with the industry and exporters hoped that the rates would be finalised soon.
The uncertainty on the rates also stems from the fact that while expenditure under RoDTEP was initially pegged at ₹50,000 crore annually, subsequently there have been indications that the actual outlay may be much less because of financial constraints.
Sectors like gems & jewellery and meat, that were not benefitting from MEIS, have their fingers crossed over inclusion in RoDTEP. “If included in RoDTEP, it could be a game-changer for the gems & jewellery sector,” said Colin Shah, Chairman, Gems & Jewellery Export Promotion council.
India’s goods exports declined 17.76 per cent in April-November 2020-21 to $173.66 billion due to a fall in global demand hit further by the Covid-19 pandemic. Exporters are hopeful of better performance in the next fiscal as the order book position for many has started improving.
Source: The Hindu Business Line
GST collections touched a record high of over Rs 1.15 lakh crore in December, reflecting festive demand and reflating economy.
The gross GST revenue collected in the month of December 2020 is Rs 1,15,174 crore and is the highest since the introduction of Goods and Services Tax from July 1, 2017, the Finance Ministry said in a statement.
“This is the highest growth in monthly revenues for the last 21 months. This has been due to combined effect of the rapid economic recovery post-pandemic and the nation-wide drive against GST evaders and fake bills along with many systemic changes introduced recently, which have led to improved compliance,” the Finance Ministry said in a statement.
The total number of GSTR-3B Returns filed for the month of November up to 31st December 2020 is 87 lakh.
During the month, revenues from import of goods were 27 per cent higher and the revenues from domestic transaction (including import of services) are 8 per cent higher than the revenues from these sources during the same month last year.
In line with the recent trend of recovery in the GST revenues, the mop-up in December crossed Rs 1 lakh crore mark for the third month in a row and was 12 per cent higher than over Rs 1.03 lakh crore collected in December 2019.
During December Central GST mop-up is Rs 21,365 crore, State GST is Rs 27,804 crore, Integrated GST is Rs 57,426 crore (including Rs 27,050 crore collected on import of goods) and Cess is Rs 8,579 crore (including Rs 971 crore collected on import of goods).
The government has settled Rs 23,276 crore to CGST and Rs 17,681 crore to SGST from IGST as regular settlement. The total revenue earned by the Central Government and the State Governments after regular settlement in the month of December is Rs 44,641 crore for CGST and Rs 45,485 crore for the SGST.
Source: The Economic Times
Availability of benefits under tax refund scheme RoDTEP for exporters would be subject to conditions, restriction, ineligibility and fulfilment of procedural requirements as notified by the government, an official statement said on Friday. The government on Thursday said it has decided to extend the benefit of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to all goods, with effect from Friday.
The finance ministry also said that the RoDTEP benefit would be available from January 1 even if the rates and other details are prescribed later, within the next few days. "The benefit of RoDTEP would be available subject to the conditions, restriction, exclusions, ineligibility and fulfilment of the procedural requirements as notified," the ministry said in a statement on Friday.
It added that things which will be notified shortly include details of export goods (tariff lines) eligible for scheme; applicable RoDTEP rate, value caps (wherever applicable) on such eligible goods/tariff lines; excluded category of exports; other conditions and restrictions and the procedural details for grant of RoDTEP duty credit, and utilisation.
In March, the government approved the scheme for reimbursement of taxes and duties to exporters, with a view to give a boost the country's dwindling outbound shipments. The scheme would refund to exporters the embedded central, state and local duties and taxes that were so far not being rebated or refunded and were, therefore, placing India's exports at a disadvantage.
A three-member committee was formed for determination of ceiling rates under a scheme for reimbursement of taxes and duties to exporters. The country's exports declined 17.76 per cent to USD 173.66 billion during April-November this fiscal.
Source: The Economic Times
The Reserve Bank of India (RBI) on Friday announced the launch of the next round of household surveys to capture inflation expectations and consumer confidence, which provide useful inputs for its monetary policy. The central bank has been conducting these surveys regularly.
Announcing the launch of the January 2021 round of the Inflation Expectations Survey of Households (IESH), the RBI said it aims to capture subjective assessments on price movements and inflation from about 6,000 households based on their individual consumption baskets across 18 cities. The cities include, Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi, and Thiruvananthapuram.
"The survey seeks qualitative responses from households on price changes (general prices as well as prices of specific product groups) in the three-month ahead as well as one-year ahead periods and quantitative responses on current, three-month ahead and one-year ahead inflation rates," it said.
The Consumer Confidence Survey (CCS) seeks qualitative responses from households, regarding their sentiments on the general economic situation, employment scenario, price level, households' income, and spending.
The survey is conducted regularly across 13 cities -- Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Patna and Thiruvananthapuram. The survey covers about 5,400 respondents across 13 cities.
The RBI said the result of the surveys provides useful inputs for monetary policy. The next meeting of the Monetary Policy Committee, the rate-setting panel, is scheduled for February 3-5, 2021.
On behalf of the RBI, a Mumbai-based agency will conduct the surveys through face-to-face interviews as well as telephonically, in view of the phase-wise resumption of activities amid the COVID-19 pandemic.
Source: The Economic Times
Despite disruptions in commercial activities due to the COVID-19 crisis, sales of motor spirit and diesel have increased during 2020, which indicates a revival of the economy, an official of Indian Oil Corporation (IOC) said on Friday.
During 2020, sales of motor spirit have increased by 108 per cent and diesel by 96 per cent over the previous year, IOC director (marketing) Gurmeet Singh said.
“This shows the healthy signs of an economic revival,” he said at an event in Bhubaneswar in the presence of petroleum and natural gas minister Dharmendra Pradhan.
IOC chairman S M Vaidya said domestic LPG demand increased by 10 per cent during the lockdown months in the country.
He said 2020 was a year of digitalisation at the state-run oil marketing company, which had helped it achieve seamless business continuity.
Petroleum and natural gas minister flagged off the despatch of high-octane premium petrol from the country’s oldest refinery at Digboi in Assam to seven cities, including Kolkata.
He also introduced a missed call facility for LPG refill bookings and registering new connections for households.
Currently, the option of registering new connections through the missed call facility is available only in Bhubaneshwar and will soon be rolled out in other parts of the country, IOC official said.
Prasad said the number of LPG connections in the country has reached 30 crore, out of which, 17 crore had been achieved in the last six years.
Source: The Financial Express
Indian economy is now expected to see a faster turnaround given the impending rollout of vaccine, increased mobility and less disruptions to business operations as the economy opens up but a lot will also depend on the upcoming Budget for 2021-22 to steer its course.
India, which had in 2019 overtaken the UK to become the fifth-largest economy in the world, was knocked off course somewhat due to the carnage that the pandemic and the ensuing strict lockdown unleashed — businesses were shut, consumption slumped, investments took a hit and jobs were lost.
The combined effect being that the economy got relegated to the sixth spot in 2020.
The Budget for the next fiscal starting April 2021 that Finance Minister Nirmala Sitharaman will present a month from now will be the starting point for picking up the pieces after the economic destruction.
The government’s spending plans particularly on infrastructure and social sectors as well as relief to sections hit by the pandemic and lockdown will dictate the pace of recovery, analysts said.
India’s economy had been losing momentum even ahead of the shock delivered by the COVID-19 crisis. The rate of GDP growth sank to a more than ten-year low of 4.2 per cent in 2019, down from 6.1 per cent the previous year.
The pandemic bought a human and an economic catastrophe for India, with nearly 1.5 lakh deaths. Though the deaths per million are significantly lower than in Europe and the US, the economic impact had been much more severe.
GDP in April-June was 23.9 per cent below its 2019 level, indicating that nearly a quarter of the country’s economic activity was wiped out by the drying up of global demand and the collapse of domestic demand that accompanied the series of strict national lockdowns.
And a 7.5 per cent decline in GDP in the following quarter pushed Asia’s third-largest economy into an unprecedented recession.
As restrictions were gradually lifted, many parts of the economy were able to spring back into action although output remains well below the pre-pandemic levels.
While agriculture with bountiful harvest has been a driver of India’s economic recovery, the government’s stimulus spending in response to the COVID-19 crisis has been significantly more restrained than most other large economies.
Sitharaman announced a total stimulus package of Rs 29.87 lakh crore, or 15 per cent of GDP. That equals the total spending envisaged in the government’s budget for the year to March. But the actual fiscal cost has been estimated at around 1.3 per cent of GDP, including 0.7 per cent for the incentive programme whose expense is spread over five years.
Most saw this spending as grossly inadequate.
The limited cash spending was on account of the government not generating enough revenue to even pay states for their share of GST. Revenue collections were hurt by the lockdown.
Yet, high-frequency indicators, including exports, automobile sales, energy consumption and manufacturing output have shown an uptick, which some have seen as an indication of a ‘V’ shaped recovery.
Rating agencies and analysts have raised their expectations of GDP growth in fiscal to March 2021 with RBI predicting a small positive growth in the January-March quarter.
According to Dun & Bradstreet, only 30 per cent of active businesses in India were still disrupted at the end of November 2020 compared to 95 per cent in April 2020 when the nationwide lockdown was imposed.
“Continued government support will be crucial to sustain and propel growth momentum – which has picked up,” said Arun Singh, Global Chief Economist, Dun & Bradstreet. “During the first six months of the fiscal year (April to October 2020), government expenditure was 48.6 per cent of its budgeted estimate. We expect the remaining budgeted expenditure to be spend with other off-budget spending.”
This along with the execution of various policy initiatives will propel growth momentum in H2 FY21.
However, credit disbursement to the industry has not picked up yet and this remains a cause of concern.
“This does not bode well for the industry at a time when domestic demand has not yet stabilised and external demand remains weak,” he said.
India Ratings and Research (Ind-Ra) said policymaking is facing the twin challenges in collating reliable high-frequency data and interpreting the same as the impact of the COVID-19 pandemic is proving to be an unprecedented disaster.
An appropriate understanding based on reliable data is critical to ensure effective policy intervention, it said, adding a low base in current fiscal will make even a moderate improvement in the first couple of quarters of next financial year as decent year-on-year growth.
“The projected GDP growth does indicate that the worst is over, but it still does not indicate whether the economy has recovered the lost ground and/ or surpassed it,” it said, adding the economy will be able to just recover the lost ground in FY22 and surpass the FY20 GDP level in a meaningful way only in FY23.
Source: The Financial Express
It is 2021 now and M&S, the British fashion retailer, has already announced to expand its Goodmove women’s active wear range.
And this time it includes menswear and kids wear with a large focus on casualwear segment.
The decision to expand the Good move range follows the retailer’s study that distinctly showed that over half of its consumers (52 per cent) have been wearing active wear in 2020 – and that’s a good number!
It is not surprising too as active wear saw a surge in its demand in 2020 thanks to the pandemic menace.
Besides, around 24 per cent of M&S’ customers said that ‘suitability for everyday use’ is one of the major factors for them to buy active wear.
M&S has also discovered that more than 80 per cent of its customers have now prioritised wellness and fitness in 2021 and, therefore, the decision taken by the retailer seems to have come at the right time.
It is important to mention here that Good move, which was started in early 2020, gained huge popularity amongst women looking to ‘work out in style’ especially in the tough times of COVID-19.
Now with the expansion of Good move range this year, M&S’ active wear range is all set to get a further boost, which is already buoyed up by 200 per cent online sales jump in the March to September period of 2020.
Source: Apparel Resources
Commerce Secretary Dr. Md. Jafar Uddin, on Thursday, said Bangladesh will lose a number of duty-free quota-free (DFQF) facilities after its graduation from the existing least developed country (LDC) status.
The country is now in the transition period of the graduation.
The commerce secretary opined: "We need to proceed for (signing) bilateral free trade agreements (FTAs) with potential partner countries."
"For this, we need to have deeper studies, research and understanding to offset revenue loss in order to make the country competitive in export."
He said these while co-chairing the 8th meeting of Trade and Investment Working Committee (TIWC) of Business Initiative Leading Development (BUILD) at the Ministry of Commerce on Thursday.
Dr. Jafar said export diversification is one of the priorities of the government, for which it is actively working.
The commerce secretary assured of implementing the proposed reform bids of BUILD for export diversification as well as taking supportive policies for non-RMG sectors.
He requested BUILD to duly send all proposals, coming out of the TIWC meetings, and said these will be actively considered.
"But we need the recommendations with action matrix, so that we can coordinate with different ministries accordingly to see a better implementation of our reforms," he added.
Barrister Nihad Kabir, President of the Metropolitan Chamber of Commerce and Industry (MCCI), spoke as the TIWC co-chair from the private sector.
She opined that the government should come forward to provide equal fiscal monetary assistance, like the RMG, to all the potential export-oriented sectors.
Source: The Financial Express Bangladesh
Bangladesh would need at least three years to not just get back to the full speed of the economic activities but to overcome the losses caused by the Covid-19 pandemic, the chief of the country's oldest trade body said.
"It must be understood that overcoming heavy losses during the initial period of the pandemic and then returning to normal trade and business volume will take time," Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) President Barrister Nihad Kabir said in an exclusive interview with the FE.
She added: "This will require ongoing policy and financial support with more simple and swift implementation mechanism."
"In these circumstances, another stimulus will have to be funded and managed by the government in a modified and targeted form, using the lessons learned from the first phase of Covid-19."
Barrister Nihad Kabir also said the first round of the stimulus package was not tagged to retention of employment but there should be a job-retention requirement in the second round if businesses wish to avail of the low-interest stimulus packages, particularly wage support.
But the expected pace of the economic recovery largely depends on how quick the country starts vaccination among the actors here against the lethal pathogen, the MCCI chief thinks.
Talking about the poor implementation of the package for CMSME (cottage, micro, small and medium enterprise) sector, she said disbursement should be channelled through financial institutions and micro-credit institutions which are capable of reaching the target businesses, rather than just through banks and NBFIs (non-bank financial institutions).
Soon after the deadly virus hit the country of around 170 million people, the government has so far declared 21 stimulus packages worth Tk 1.21 trillion, which is 4.34 per cent of the GDP, according to the finance ministry data.
Riding on fiscal support, the private sector-led economy started rebounding with registering positive growth in export earnings, remittance and forex reserves in the first four to five months of the current fiscal year (FY) 2020-2021.
Responding to a question about sustainability of the signs of recovery, the MCCI president said there was a significant upturn in the recovery in the first quarter of the FY but the second wave of the pandemic caused some concerns.
Ms Kabir has also expressed fears that the export sector is likely to be negatively affected again because of severe impact of the second wave of the pandemic in the US and Europe, major destinations of Bangladeshi products.
As a spillover effect, she said, it could hurt the domestic economy, including the service sector but export earnings may take a hit in the next quarter.
Remittance inflows have defied expectations in a positive way but many of the workers come back and have not been able to return to their job destination countries, according to her.
"This will probably have an effect on remittance inflows in future and lower imports do not forecast a growth in the economy and therefore is not necessarily a good sign."
For further facilitating the recovery process in the coming months, the MCCI president said the government, alongside vaccination, needs to prioritise immediate upgrading of its capacity with ensuring governance at all levels to overcome the administrative inefficiency.
At the same time, focus needs to be given for making a comprehensive database of the citizens that will help target the right sets of people for assistance and boost the informal sector.
Massive investment requires to be made in areas like IT, healthcare, education and skills development to make the economy more efficient in responding to the crisis in the coming days, she suggested.
Talking about the challenges in new year, Ms Kabir said the first challenge is to obtain vaccine for Covid-19 while dealing with issues such as job loss and disruption in the education system will also be challenging.
She suggested the government prioritise in making a comprehensive database that will help overcome many problems.
The vast majority of our employment is in the informal sector for which the country has a little data and a very little mechanism for targeting financial assistance.
The government should prioritise providing targeted assistance to the workers in the informal sector who lost jobs, helping them regain jobs.
"We're in a second wave. In my humble opinion, notwithstanding the beginning of the vaccination - we need at least 2-3 years to not just get back to the full speed of operations in the economic front, but to make up the losses of the past several months," she added.
About the new opportunities in the post-Covid regime, she said e-commerce has jumped in scope and volume. It should be encouraged and not taxed and regulated into oblivion.
Source: The Financial Express Bangladesh
Vietnam recorded export turnovers of approximately 281.5 billion US dollars in 2020, up 6.5 per cent year-on-year, and import turnovers of over $262.4 billion, up 3.6 per cent, with a trade surplus of $19.1 billion, the highest in the past five years, the General Statistics Office said on Monday.
Specifically, Vietnam gained nearly $50.9 billion from exporting phones and components, down 1.0 per cent; roughly $44.7 billion from electronic goods, computers, and components, up 24.4 per cent; around $29.5 billion from garments and textiles, down 10.2 per cent; and nearly $16.6 billion from footwear, down 9.6 per cent, reports Xinhua.
The United States remained Vietnam's biggest importer with turnovers of $76.4 billion, tailed by China with $48.5 billion and the European Union with $34.8 billion, said the office.
In the same period, Vietnam spent nearly $64 billion importing electronic goods, computers and components, up 24.6 per cent; roughly $37.4 billion on machines, equipment and spare parts, up 1.7 per cent, and $16.6 billion on phones and components, up 13.3 per cent.
Meanwhile, China was Vietnam's largest exporter with turnovers of $83.9 billion, followed by South Korea with $46.3 billion and the Association of Southeast Asian Nations (ASEAN) with $30 billion, according to the office.
Source: The Financial Express Bangladesh
