With a focus on enhancing ease of doing business, industry bodies have recommended the finance ministry to simplify the current tax rules, implement measures to resolve pending disputes, and encourage out-of-court settlements, in the upcoming full Budget, set to be presented in July 1.Three industry bodies – Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce & Industry (FICCI), and PHD Chamber of Commerce and Industry (PHDCCI) – presented their recommendations to the Department of Revenue on Tuesday. The PHDCCI recommended reduction of pre-deposit amount while filing appeal to Appellate Authority, modification in filing of appeal procedure, modification of formulae for calculating the value of Transfer and Development Right (TDR), exemption of GST on Corporate guarantees, and introduction of faceless adjudication on the view of income tax.
In the direct tax segment, too boost consumption, the industry body suggested reduction in rates of taxation for individuals and Limited Liability Partnership (LLP), promotion of electric vehicles by allowing higher depreciation and extending benefits under section 80 EEB, and increasing limits for prosecution in TDS matters to Rs 50 lacs to ensure prosecution only in large and sensitive matters along with reduction in rate of compounding in prosecution matters.
Mukul Bagla, Chair of the Direct Taxes Committee at PHDCCI, recommended taxpayers earning Rs 40 lakh and above to be taxed at 30%. The current threshold is Rs 15 lakh. “The middle class is currently taxed at a rate of 30%, leaving them with little disposable income for savings and other needs. We suggested that the 30% tax slab should apply only to incomes above Rs 40 lakhs”, said Bagla. Subhrakant Panda, Immediate Past President, FICCI told reporters: “The basic approach, in the next five years, is very critical to maintain growth momentum. In our interaction, we have followed broad principles of simplification to enhance ease of doing business and look at measures to reduce litigation.” Panda also said that the government is actively considering rationalisation of the capital gains tax structure. Currently, the long-term capital gains tax (LTCG) is more benign on listed shares, while other types of assets, including real estate, attract the tax at higher rates, so the taxpayers have to hold these for longer periods to escape the higher short-term taxes. The holding period for long-term capital gains tax is more than 12 months for listed shares/debt securities, while it is more than 24 months for unlisted shares and real estate, and 36 months for debt mutual funds and securities. To bring about simplicity, consistency and rationalisation of capital gains tax regime, the CII has suggested the long term capital gains on financial assets to be taxed at 10%, while others at 20% (with indexation benefits). For short term capital gains, CII says, financial assets should be taxed at 15%. Currently the rates may go up to as high as 30%. Moreover, the industry body recommends the holding period for assets to be considered under LTCG as 12 months for financial assets, and 36 for others. Also, to boost consumption demand in the short term, steps such as providing a marginal relief in income tax at the lower end of the spectrum with taxable income up to Rs 20 lakhs; reduction in excise duties on Petrol and Diesel: upward revision of minimum wages of MNREGA; raising DBT amount under PM Kisan were suggested by CII.
Source: Financial Express
The textile and clothing industry, which employs nearly 60 lakh people in Tamil Nadu, has demanded availability of raw materials at competitive prices for the industry. “Raw material, labour, and power are the three major costs for textile units,” said S.K. Sundararaman, chairman of the Southern India Mills’ Association (SIMA). The SIMA chairman, who met the new Union Textile Minister, Giriraj Singh, recently, told presspersons in Coimbatore on Tuesday that Indian cotton prices had remained almost stable this cotton season (October 2023 to September 2024). Yet, the Indian cotton prices were expensive compared with the international prices. The Indian cotton availability this season was expected to be 323 lakh bales, and imports would be about 12 lakh bales. The levy of 11% import duty on cotton had affected prices. Though the government removed the duty for Extra Long Staple (ELS) cotton recently, it should remove the duty completely when the peak arrivals end in India. Similarly, the government recently relaxed Quality Control Order (QCO) norms for import of viscose and polyester fibres for export of value added products. It should grant complete QCO exemption for these fibres. These were two short-term measures that would give immediate relief to the industry. The government should also take measures to improve cotton yield, introduce quality seeds, and promote high density planting so that farmers got better returns for cotton and the industry got raw material at competitive prices. This was a medium-term measure that the industry was demanding to strengthen the cotton textile value chain, he added. According to Mr. Sundararaman, the Tamil Nadu government should not increase the power costs any further and should permit banking of wind energy generated. “Any further increase in electricity charges will kill the industry,” Mr. Sundararaman said. The Association was talking to the Tamil Nadu government continually on this, he said.
Source: The Hindu
Synopsis India allows duty free import of inputs used for manufacturing for exports subject in advance authorisation to export obligation period in which exporters have to ship the goods within a stipulated time period otherwise they’re penalised. The Directorate General of Foreign Trade (DGFT) has sought comments of all the concerned stakeholders on the proposed amendments within 15 days. The government on Tuesday proposed to amend the export obligation period for wheat, raw sugar, natural rubber, spices, pharmaceuticals and tea, among other sectors to facilitate their exports. India allows duty free import of inputs used for manufacturing for exports subject in advance authorisation to export obligation period in which exporters have to ship the goods within a stipulated time period otherwise they’re penalised. The Directorate General of Foreign Trade (DGFT) has sought comments of all the concerned stakeholders on the proposed amendments within 15 days. The proposed relaxations in the obligation period for coconut oil to six months from 90 days, silk in any form to 12 months from nine months, and six months for wheat, raw sugar, natural rubber, maize and walnut. “This has been requested to facilitate exports and operate within a higher trust based eco-system,” DGFT said in a trade notice. To amend the export obligation period, the DGFT has proposed to amend an appendix of foreign trade policy’s handbook of procedures 2023 as there have been a lot of representations from export promotion councils and exporters regarding the review of the appendix which deals with the sectors and their respective export obligation period. “This directorate is proposing a review of the export obligation period as mentioned in Appendix - 4J…All stakeholders are advised to provide their comments/suggestions/views with regard to proposed amendments,” the DGFT said.
Source: Economic Times
The Centre may bring more product lines, such as t-shirts and innerwear, under the coverage of nearly ₹11,000-crore production linked incentive (PLI) scheme for the textile sector, according to two people close to the development.
The government will also extend the time provided to an applicant to set up the facility from two years to over three years, the people added. The Centre plans to tweak the scheme, approved in September 2021, to increase its effectiveness as it has failed to boost India's textile exports, with them declining 11.69% from $16.24 billion in 2018 to $14.34 billion in 2023. Mint reported in April that the central government is planning a periodic review of the performance of its marquee manufacturing incentive scheme across sectors and make necessary adjustments. The government is considering restructuring the PLI scheme in sectors with slow progress, and even scrap it in sectors where investor interest is dim and not much progress has been made, the report said.
Industry demand
According to industry stakeholders the scheme would do better by reducing the minimum entry level so that smaller players could also benefit from it. “If the government is keen to have the garment sector also take advantage of the PLI Scheme, they will have to treat the minimum entry levels differently from the rest of the sector, as the capital required to set up a mega garment unit is substantially lower than that of a textile unit,” said Rahul Mehta, chief mentor at the Clothing Manufacturers Association Of India. "Textile industry is composed of textile and apparel industries. The current PLI scheme structure with large capital layout is more suited to setting up large textile mills but not apparel factories,” said Pawan Gupta, chief executive and co-founder of Fashinza, a business-to-business global fashion supply chain startup. "We need a PLI scheme with a lower initial capital requirement for the apparel industry, which is a significant employer compared to mills that are increasingly automated. A substantial base of apparel factories would also act as demand centres for large mills, which might otherwise struggle to sell their products," Gupta added. Based on industry suggestions, the government plans to implement “corrective measures to support the textiles industry in achieving a positive growth trajectory”, said one of the persons cited above.
Source: Live Mint
Synopsis Several government departments have begun accepting applications for quarterly disbursements of incentives under the Production Linked Incentive (PLI) schemes to expedite claims processing, according to a senior official. The Department for Promotion of Industry and Internal Trade (DPIIT) has encouraged other departments to adopt this practice, except in cases like food processing where the volume of applications is low. The move comes in response to demands from PLI beneficiaries for timely disbursement of claims. Several departments have started accepting applications for disbursements of incentives under the production linked incentive (PLI) schemes on a quarterly basis to fasttrack clearance of claims, a senior government official said. The department for promotion of industry and internal trade (DPIIT) has suggested others also follow the same practice. "In many departments, we have started accepting quarterly applications. Others also, we are telling them to do except in some cases, where they are finding it difficult to do like food processing, where the numbers are small," the official said. The development assumes significance as certain quarters of PLI beneficiaries have urged the departments for timely disbursement of claims. The PLI scheme was announced in 2021 for 14 sectors, including telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell batteries, drones, and pharma, with an outlay of Rs 1.97 lakh crore. So far, only Rs 9,700 crore has been disbursed to PLI beneficiaries, which is about 5 per cent of the total estimates. In 2023-24, the figure was Rs 6,800 crore, the official said. Earlier the scheme guidelines stated that applications for incentives can be submitted after the end of the financial year to which the claim pertains. Annual claims can be submitted only once and within nine months of the end of the financial year. In February, economic think tank GTRI (Global Trade Research Initiative) flagged the slow progress in the disbursement of sops under the schemes and suggested the government to simplify the criteria to expedite the grant of incentives and push domestic manufacturing. PLI criteria for various sectors include thresholds on investments, production, sales, degree of localisation, inputs used and many more. Manufacturers may not be able to tick on all boxes, GTRI Founder Ajay Srivastava has said. PLI schemes for 14 sectors have attracted over Rs 1.06 lakh crore investments till December 2023 with pharma and solar modules accounting for nearly half of the total, according to government data. When asked about disbursement under the PLI scheme for white goods (AC and LED lights), the official said: "We have exceeded the target of Rs 70 crore".
Source: Economic Times
NEW DELHI: Signalling a significant improvement in efficient handling of ships and cargo in recent years, nine Indian ports have made it to the top 100 rankings (in list of 405 ports) in the Container Port Performance Index 2023 (CPPI 2023) of the World Bank. Govt-owned Visakhapatnam ranked 19th, first time for an Indian port making it to top 20. Adani-owned Mundra ranked 27. In 2022, Visakhapatnam port ranked 115 and Mundra’s ranking was 48. The improvement is a milestone for India’s maritime industry, officials in the ports and shipping ministry said. The Indian ports have achieved this by enhancing their operational efficiency and service delivery. Officials said Visakhapatnam port has demonstrated good performance on parameters, such as 27.5 moves per
In 2022, Visakhapatnam port ranked 115 and Mundra’s ranking was 48. The improvement is a milestone for India’s maritime industry, officials in the ports and shipping ministry said. The Indian ports have achieved this by enhancing their operational efficiency and service delivery. Officials said Visakhapatnam port has demonstrated good performance on parameters, such as 27.5 moves per crane hour, a turnaround time (TRT) of 21.4 hours, and minimum berth idle time. These highlight the port’s ability to handle container ships efficiently and influence customer preferences. The seven other ports which were ranked within 100 were Pipavav (41), Kamarajar (47), Cochin (63), Hazira (68), Krishnapatnam (71), Chennai (80) and Jawahal Lal Nehru (96). The index prepared by the World Bank and S&P Global Market Intelligence is a comparable assessment of performance based on vessel time in ports. Yangshan port in China and Salalah port in Oman were top two ports in terms of rankings. “The average duration of a port call (time taken to load or unload at least one container) in 2023 was 40.5 hours, which represents a slight increase over the global average of 36.8 hours in 2022. About 11.7% (or 3.7 hours) was idle time consumed at the berth immediately before and after cargo operations. Also known as the ‘Start-Up’ and ‘Finish’ sub-processes of a port call, each activity does not necessarily need to take more than 30 minutes to complete safely,” said the report.
Source: Times of India
Surat: Traders from Millennium II textile market staged protest on Tuesday with a demand to remove seals that were applied again after opening it once. The traders claimed that they were suffering huge losses and thousands of employees have become unemployed due to the actions of the civic body. Meanwhile, the Surat Municipal Corporation (SMC) and fire officials claimed the market officials failed to make necessary changes required as per building use certificate (BUC) guidelines and for fire NOC. SMC officials also found that the market did not complete the work as assured in the affidavits submitted earlier. A few textile markets on Ring Road were sealed again after the market management and builder failed to complete the work as assured in the affidavit they had submitted to SMC. Other market associations are likely to start protests against the sealing drive again. In Millennium II market, six incidents of fire have been reported in the past few years. Fire officials claimed that they were insisting on the changes that are necessary to prevent further fire incidents. A huge amount of textile products, mostly polyester, is stored in the 650 shops there
SMC officials also found that the market did not complete the work as assured in the affidavits submitted earlier. A few textile markets on Ring Road were sealed again after the market management and builder failed to complete the work as assured in the affidavit they had submitted to SMC. Other market associations are likely to start protests against the sealing drive again. In Millennium II market, six incidents of fire have been reported in the past few years. Fire officials claimed that they were insisting on the changes that are necessary to prevent further fire incidents. A huge amount of textile products, mostly polyester, is stored in the 650 shops there. The traders claimed, “If the builder did not complete the requirements for BUC or fire NOC then how did SMC provide the drainage and water connections? Further, the builder is at fault. Why should the trader and their employees suffer?” “Around 1,200 families of traders, their employees and service providers have been rendered jobless. Daily business loss is about Rs 500 crore,” said a trader. After the Rajkot TRP Game Zone fire SMC sealed over 800 premises in the city of which many were textiles markets. After protests and uproar, SMC started removing seals once the markets submitted affidavits. However, the markets that did not complete the required work were sealed again.
Source: Times of India
The Indian government's direct tax collections for the financial year 2024-25 have surged by 20.99%, amounting to ₹4,62,664 crore, compared to ₹3,82,414 crore in the same period last year, the income tax department said on Tuesday (June 18). The net direct tax collection of ₹4,62,664 crore includes ₹1,80,949 crore from Corporation Tax (net of refunds) and ₹2,81,013 crore from Personal Income Tax (net of refunds). For April-June 17, gross collection of direct taxes (before adjusting for refunds) stood at ₹5.16 lakh crore compared to ₹4.23 lakh crore in the corresponding period of the preceding financial year, showing a growth of 22.19%. The gross collection includes ₹2,26,280 crore from CIT and ₹2,88,993 crore from PIT collections.
Source: Times of India
HÀ NỘI — Five pilot projects on green technology for Vietnamese textile and garment exporters went on show at the ‘For a Sustainable Garment and Textile Industry in Việt Nam’ show held in Hà Nội on Monday. The event is part of the German government-supported ‘Green Tech Landing Pad’ initiative, jointly implemented by GIZ and the National Innovation Center (NIC), Ministry of Planning and Investment.The new technologies being piloted include IoTeamVN's energy management solution, Enedig Kft's cloud-based labour cost calculation solution timeSSD®, Hoàng Hà's waste heat recovery solution, ECOSOI's pineapple fabrics and fibres, and BlockTexx's polyester and cellulose recycling solution.These innovations evaluated favourably by domestic partners such as VINATEX, Faslink, Thịnh Phúc, and Kyungbang, demonstrate significant potential for application and scale-ups. The pilot projects have demonstrated the industry’s potential in transitioning to sustainable production and meeting European market standards. The textile and garment sector makes an average contribution of US$30-50 billion to Việt Nam’s GDP and is poised for significant growth, especially with free trade agreements like the one with the EU, (EVFTA).Nonetheless, textile and garment enterprises face technical challenges in their transition to green and sustainable practices to comply with EU standards and seize growth opportunities. The Green Tech Landing Pad represents a strategic response to those challenges. It identifies, connects, and facilitates the adoption of green technologies among Vietnamese textile and garment enterprises to ensure compliance with European sustainability standards. Vũ Quốc Huy, Director of the National Innovation Center, said: “The Green Tech Landing Pad initiative plays a crucial role in the context of the environmental and sustainability challenges that Việt Nam’s textile and garment industry is facing. "Through this initiative, we equip textile and garment enterprises with cutting-edge and eco-friendly technologies, solutions, and production models. This not only enhances competitiveness but also drives Việt Nam's garment and textile industry’s trajectory towards sustainability.” Tarek Hassan, head of the Digital Transformation Centre Vietnam, a project funded by GIZ noted that Việt Nam's textile and garment industry would face many difficulties and challenges in green transformation such as high upfront costs, Return on Investment (ROI) uncertainty, lack of a skilled workforce, infrastructure limitations, integration of new technologies and environmental issues. Dennis Quennet, Director of Sustainable Economic Development at GIZ in Việt Nam, said: "German-Vietnamese cooperation goes beyond today. On behalf of the German government, GIZ will continue to support the digital and green transformation of Việt Nam’s economy by working with the public and private sectors in different industries. Together, we will enhance the roles of start-ups and SMEs in Việt Nam’s economy to improve competitiveness and create innovation, opportunities, and jobs.”The Green Tech Landing Pad initiative has successfully connected nine new technological solutions with seven textile and garment export companies to address common technical issues, including sludge treatment, heat recovery, fabric recycling, energy optimisation, labour management, and new sustainable materials. — VNS
Source: Vietnam News
Textile millers and garment makers in Bangladesh yesterday demanded that the government include some of their recommendations in the new national budget as many of the issues they raised remain unaddressed. For instance, garment exporters had demanded the reduction of source tax from the existing 1 percent to 0.5 percent for the upcoming fiscal year, which starts on July 1. They also sought the continuation of cash incentives on export receipts until 2032 as the World Trade Organization (WTO) will allow graduating least-developed countries (LDCs) to enjoy trade benefits as LDCs till then. As these demands were left unmet in the proposed budget for FY25, the textile millers and garment makers have asked the government to reconsider their recommendations on the grounds that such measures would improve businesses. SM Mannan Kochi, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said one of the proposed measures in the budget would allow customs officials to levy a 400 percent fine if an exporter is found using inaccurate documentation. "Such a proposal will only increase the harassment of exporters for simply making a mistaking when filing documents for the export procedure," he added. Kochi was speaking at a post-budget press conference jointly organised by the BGMEA, Bangladesh Textile Mills Association (BTMA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) at the BGMEA office in Dhaka. The BGMEA president also demanded food rationing for garment workers as persistently higher inflation has increased essential commodity prices in domestic markets. He also suggested the government introduce a special scheme for both saving and fostering the growth of small and medium enterprises in the textile and garment sectors. BKMEA Executive President Mohammad Hatem said although the government takes advanced income tax, the amount charged is often not returned as per the rules. Besides, many textile and garment factories are facing serious difficulties due to a severe gas crisis. BTMA President Mohammad Ali Khokon said there is an opportunity to bolster earnings from the 15 million kilogrammes of garment waste generated across the country each year as many global buyers want apparel made from recycled materials. But the VAT on this type of product has been affecting the sector, he added, demanding the withdrawal of a 15 percent VAT on sales of garment waste and yarn. Khokon also informed that the domestic primary textiles sector can typically supply $30 billion worth of raw materials to export-oriented garment makers every year. However, their production has been suffering severely due to the ongoing gas and energy crises. On the other hand, they welcomed the proposed rebates on imports of 17 textile products and the proposed reduction of the VAT Appellate Tribunal fee to 10 percent from 20 percent. However, they also demanded the import duty on chillers be reduced to 1 percent from the proposed 10 percent. Previously, chillers faced an import duty of 104.68 percent.
Source: Daily Star
The US-based Cotton Council International has called on the Indian government to eliminate the 11% import duty on short staple cotton, aiming to reduce costs and support the Indian textile industry. Despite a recent policy change in February, which saw the removal of a 10% import duty on Extra Long Staple (ELS) cotton, the duty on short staple cotton remains. The duty in question was introduced on February 1, 2021, and took effect the following day. It includes a 5% basic customs duty, a 5% tax, and a 1% social welfare charge. While the policy has been amended to exclude ELS cotton, which has a staple length above 32 millimeters (mm), short staple cotton imports continue to face this financial burden. Marc A Lewkowitz, President and CEO of SUPIMA, addressed the issue during a roundtable organized by Cotton Council International. He emphasized the importance of understanding and addressing the challenges faced by their partners in the Indian textile industry. He noted that the import duty on short staple cotton, which constitutes about 11%, poses a significant obstacle. Lewkowitz highlighted that the duty’s imposition since 2021 has been particularly detrimental to the domestic textile industry in India. He pointed out that while the duty has been successfully lifted for American PIMA cotton and other imports exceeding 32 mm in length, the tariff on shorter staple cotton continues to strain the industry. This situation is problematic because India’s domestic production cannot meet the full demand of its vast textile sector, making imports necessary. India’s textile industry is a major player on the global stage, yet it struggles to produce enough cotton domestically, especially the high-quality ELS cotton required for certain products. ELS cotton, known for its superior quality and strength, represents less than 1% of India’s total cotton production. As a result, Indian textile mills that manufacture high-end products such as yarns, apparel, and home textiles, rely heavily on imported ELS cotton. The major suppliers of ELS cotton to India include the United States, Egypt, and Israel. Given the insufficient domestic production, the continued import duty on short staple cotton creates a bottleneck, impacting the cost and efficiency of the textile manufacturing process. Lewkowitz’s appeal underscores a significant issue in the international trade policies affecting the textile industry. By removing the 11% import duty on short staple cotton, the Indian government could alleviate some of the financial pressures on textile manufacturers. This change could enhance the competitiveness of Indian textiles in the global market, ultimately benefiting the entire supply chain, from farmers to retailers. In conclusion, the Cotton Council International and SUPIMA advocate for policy adjustments to support the Indian textile industry, which remains dependent on imported cotton. The removal of the import duty on short staple cotton is seen as a necessary step to ensure the growth and sustainability of this crucial sector.
Source: R9News
