Loading...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 News - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Category: ?
Categorized by AI
---- All Categories ----
  • ---- All Categories ----
  • Income Tax
  • GST
  • Customs, DGFT & SEZ
  • FEMA & RBI
  • Corp. Laws, SEBI & IBC
  • PMLA, Black Money & ED
  • Budget
  • News and Press Release
  • PTI News
Month:
---- All Months ----
  • ---- All Months ----
  • January
  • February
  • March
  • April
  • May
  • June
  • July
  • August
  • September
  • October
  • November
  • December
Year:
---- All Years ----
  • ---- All Years ----
  • 2026
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    Ratnaveer Precision Engineering Reports 20% Revenue Growth and 21% PAT Growth in Q1 FY27
    India placed in lower tariff tier at 10 pc under US Section 301 measures on forced labour: Govt
    ED report says CMRL ex-MD cited Veena’s ties to then Kerala CM for payments
    Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman outlines 5Rs of responsive tax governance; Calls for greater tax certainty and ...
    Trump says US will investigate EU trade practices, claiming bloc unfairly fined tech giants
    World shares are mixed and oil prices fall, markets in Asia skid in sell-off of AI-related shares
    Sitharaman ask I-T officials to go after tax evaders, ensure convenience for honest taxpayers
    HIGHLIGHTS
    Rupee recovers 20 paise to settle at 96.53 against US dollar
    Sri Lanka welcomes US tariff reduction
    DPIIT's One District One Product Initiative Promotes 1,244 Unique Products Across 773 Districts
    India's Services Exports Rise to USD 421.3 Billion in FY 2025-26, Led by Telecommunications, Computer and Information Services and Business Services
    India and Israel Conclude Second Round of Negotiations for Proposed Free Trade Agreement
    Glomo Secures Visa's Principal Membership, Becomes India's First Non-Bank Acquirer to Join the Network
    India's forex reserves jump USD 1.08 billion to USD 676.237 billion
    Boult Earbuds in India 2026: Five Reasons They are the Smartest Budget Pick
    Stock markets extend losses for 5th straight day on US trade tariffs, West Asia tensions
    China slaps export controls on 14 EU entities in retaliation for Russia-related sanctions
    Rupee recovers 18 paise to settle at 96.55 against US dollar
    Infosys: AI Revenues at 8.2% in Q1; Resilient Operating Margin of 21.1%
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

News
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
July 25, 2026
Show AI Summary
Copper Clad Laminate expansion advances through policy and rights-issue approvals, supporting domestic electronics manufacturing and strategic growth initiatives.
The company reported progress on a proposed Copper Clad Laminate manufacturing project, including in-principle approval under the Gujarat Electronics Policy and substantial project completion. The facility is intended to support domestic electronics manufacturing and reduce import dependence. It also reported upgraded credit ratings, enhanced rated bank facilities, and stock-exchange in-principle approvals for a proposed rights issue supporting expansion and strategic growth initiatives.
July 25, 2026
Show AI Summary
US forced-labour tariffs place India in a lower tier while preserving exclusions for specified imports and Section 232 products.
US Section 301 forced-labour measures impose an additional 10 per cent tariff on imports from India, with India placed in a lower tariff tier than initially proposed. Generic pharmaceuticals, smartphones and certain specified products outside additional duties remain excluded, as do products already covered by Section 232 measures, including steel, aluminium and auto parts. The textile-specific mechanism has not yet been established or operationalised, and engagement continues in connection with bilateral trade agreement negotiations.
July 25, 2026
Show AI Summary
Money-laundering investigation examines alleged fictitious expenses, circular vendor payments, and consultancy payments without services or deliverables.
A money-laundering investigation alleges misappropriation through fictitious expense entries, unsupported vouchers, and inflated vendor invoices used to withdraw funds in cash. The Enforcement Directorate further alleges that payments described as software or IT consultancy expenses were made to Exalogic Solutions Pvt Ltd and Veena T without services or deliverables. The report cites statements concerning the alleged sham payments, Exalogic's dependence on company funds, and subsequent transfers from its account. The PMLA case is based on a prosecution complaint concerning suspected financial irregularities.
July 25, 2026
Show AI Summary
Tax certainty and taxpayer-centric administration drive simplified compliance, reduced litigation, digital service delivery, and stronger voluntary tax compliance.
Tax administration reform under the Income-tax Act, 2025, rules and forms is directed toward a simpler, transparent and taxpayer-centric system. Key priorities include reducing compliance costs and litigation through tax certainty, faster return processing, refunds, grievance redressal, voluntary compliance and timely appeal disposal. Digital initiatives, including PAN 2.0, ITBA 2.0, IEC 3.0, Kar Saathi and SAKSHAM NUDGE, are intended to simplify compliance and improve taxpayer experience. Capacity building in technology, international taxation, transfer pricing, digital assets and cybersecurity supports this reform agenda.
July 24, 2026
Show AI Summary
Trade Practice Investigation: Tech-company antitrust fines prompt proposed tariffs and trade sanctions under federal trade law mechanisms.
A formal investigation into alleged unfair trade practices has been announced in response to European regulatory fines imposed on major United States technology companies. The stated concern is that digital antitrust penalties are unfairly directed at United States businesses, with possible tariffs on European Union imports indicated. The proposed response is linked to Section 301 of the Trade Act of 1974, permitting import taxes and other sanctions against unjustifiable, unreasonable or discriminatory trade practices.
July 24, 2026
Show AI Summary
Import tariffs and energy costs heighten inflation risks, pressuring consumers, corporate profits and monetary-policy expectations amid market volatility.
Fresh tariffs on imports, rising energy prices and Middle East conflict are identified as concurrent pressures on global financial markets. The tariff measures apply to nearly all imports into the United States and are paid by importing companies, which typically pass the additional costs to consumers. Higher energy costs and tariffs may increase inflationary pressure, reduce household discretionary spending and affect corporate profitability, while influencing monetary-policy expectations. Investors also questioned whether substantial artificial-intelligence investment can support technology-sector valuations.
July 24, 2026
Show AI Summary
Responsive tax governance promotes taxpayer convenience, correction of bona fide errors, tax certainty, prompt refunds and prevention of avoidable litigation.
Responsive tax governance requires convenience for honest taxpayers, correction of bona fide errors and firm consequences for deliberate tax evasion. The Income Tax Act, 2025 is intended to simplify the legal framework, reduce uncertainty and lower compliance costs, supported by stronger electronic filing infrastructure and prompt refund processing. Tax certainty should promote voluntary compliance and shift the focus from litigation management to litigation prevention through consistent guidance, simplified procedures, technology, standardised processes, effective grievance resolution and reduction of recurring taxpayer difficulties.
July 24, 2026
Show AI Summary
Examination integrity safeguards prompt monitoring, enforcement action and proposed stricter penalties for paper leaks and institutional failures.
Examination integrity measures include reported termination of agency officials, contemplated legal and criminal action, proposed stricter punishment for paper leaks, and Supreme Court monitoring of preventive steps. The Supreme Court also prohibited unauthorised posting or uploading of audio-video court proceedings on social media and digital platforms without prior administrative permission. The updates further address taxpayer facilitation alongside firm action against evasion, trade measures connected with forced-labour concerns, and potential legal action concerning university communications to students.
July 24, 2026
Show AI Summary
Foreign exchange market stabilisation supported rupee recovery as investor outflows, geopolitical tensions and elevated crude prices maintained currency pressure.
Foreign exchange market conditions saw the rupee recover against the US dollar amid reports of Reserve Bank of India intervention and dollar sales by public-sector banks to limit further depreciation. Foreign institutional investor outflows, weak domestic equity sentiment, geopolitical tensions, and elevated crude oil prices continued to pressure the currency. A decline in crude prices, diplomatic engagement, and central-bank intervention were identified as potential stabilising factors.
July 24, 2026
Show AI Summary
Forced-labour import prohibition enabled lower tariff treatment for Sri Lankan goods, supporting export competitiveness and responsible trade practices.
Tariff treatment for Sri Lankan goods entering the United States was reduced after Sri Lanka prohibited imports of goods produced using forced labour. The prohibition placed Sri Lanka within the lower tariff category under the stated US framework. The reduction is described as supporting exporter competitiveness while reflecting commitments to fair trade, responsible business practices, internationally accepted labour standards, and sustainable economic reforms.
July 24, 2026
Show AI Summary
One District One Product strengthens district product branding, market access, food-processing support and export-oriented value chains.
The One District One Product initiative supports district-identified products through branding, market access, exhibitions, capacity building and Government e-Marketplace onboarding. States and Union Territories select products and may leverage Central and State schemes, as no district-specific allocation is made. PM Ekta Malls and the PMFME Scheme support sales, food-processing projects, common infrastructure, branding, packaging, quality standardisation and food-safety compliance. Districts as Export Hubs promotes export-potential products through export committees, action plans and value-chain coordination.
July 24, 2026
Show AI Summary
Services export promotion expands market access, professional mobility, qualification recognition and trade outreach for Indian service suppliers.
Services export promotion combines targeted market and sector strategies, removal of domestic impediments, trade agreements and export-promotion activity. Free Trade Agreements secure market access and national treatment for Indian service suppliers, support transparent and time-bound authorisation processes, and facilitate temporary mobility of skilled professionals. Mutual Recognition Agreement provisions seek recognition of qualifications and licensing requirements. The framework also addresses social-security coordination, student mobility, traditional medicine and double-taxation commitments for IT services. The Services Export Promotion Council supports market development, trade facilitation, capacity building and international outreach.
July 24, 2026
Show AI Summary
Free trade agreement negotiations advance as India and Israel address market access, origin rules, customs facilitation and economic cooperation.
India and Israel completed the second round of negotiations for a proposed Free Trade Agreement under the Terms of Reference signed in November 2025. Technical discussions covered trade in goods and services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, intellectual property rights, customs procedures, trade facilitation and economic cooperation. Both sides sought to narrow gaps, identify areas of convergence and work towards early conclusion of a balanced, comprehensive and mutually beneficial agreement.
July 24, 2026
Show AI Summary
Direct card acquiring enables cross-border merchants to manage payment processing, settlement, risk monitoring and disputes without intermediary acquirers.
Visa Principal Membership enables Glomo to operate as a direct non-bank acquirer for Visa-powered merchant card payments through GIFT IFSC. It allows direct management of merchant acquisition, processing, settlement, transaction approval optimisation, fraud and risk monitoring, and dispute and chargeback handling without intermediary acquirers. The arrangement is intended to accelerate onboarding and processing, enhance control over risk policies and merchant experience, and support cross-border acceptance and settlement, including management of multiple currencies, banking systems and regulatory requirements.
July 24, 2026
Show AI Summary
Foreign exchange reserves rose as foreign currency assets increased, while gold reserves fell and IMF reserve position declined.
Foreign exchange reserves increased during the reported week, principally because foreign currency assets rose, including valuation effects from movements in non-US currencies held in reserve. Gold reserves declined, Special Drawing Rights increased, and the reserve position with the International Monetary Fund decreased. Earlier reserve declines were associated with rupee pressure and foreign-exchange market intervention through dollar sales.
July 24, 2026
Show AI Summary
Consumer electronics financing enables instalment purchases of affordable earbuds through in-store loan and reusable credit facilities, subject to approval.
Affordable Boult earbuds are described as offering extended battery life, fast charging, dynamic drivers, low-latency gaming modes, Environmental Noise Cancellation, Bluetooth connectivity, and selected active noise-cancellation features. Models are compared by audio, calling, gaming, and charging specifications. Purchases through partner stores may be financed through an Easy EMI Loan or Insta EMI Card, subject to in-store application and approval, with instalment tenures and possible zero-down-payment offers on selected models.
July 24, 2026
Show AI Summary
Trade-tariff concerns and oil-price volatility deepen risk aversion, extending equity market losses amid geopolitical tensions and foreign outflows.
Indian equity markets extended their losing streak amid caution over United States trade-tariff concerns, West Asia tensions, oil-price volatility, foreign equity outflows and selling in selected blue-chip shares. Higher oil prices were identified as a potential pressure on macroeconomic indicators and growth prospects. New import tariffs were described as a constraint for export-oriented economies, particularly technology-heavy markets, while investors may diversify exposure across emerging-market opportunities.
July 24, 2026
Show AI Summary
Dual-use export controls restrict supplies to European entities amid reciprocal Russia-related sanctions and non-proliferation concerns.
China imposed dual-use export controls on 14 European entities in response to European Union sanctions affecting Chinese and Hong Kong enterprises. Chinese companies cannot export dual-use items to the listed organisations, and foreign companies are barred from supplying them with dual-use items made in China. China stated that the restrictions protect national security and interests and support international non-proliferation obligations in the context of Russia-related sanctions.
July 24, 2026
Show AI Summary
Foreign-exchange market intervention supported rupee stabilisation amid investor outflows, weak equities, geopolitical tensions and elevated crude oil prices.
Foreign-exchange market conditions supported a rupee recovery against the US dollar following reported Reserve Bank of India intervention and dollar sales by public-sector banks. Pressure on the currency persisted due to foreign institutional investor outflows, weak domestic equity sentiment, geopolitical tensions and elevated crude oil prices. Lower crude prices, a weaker dollar index and further central bank intervention were identified as potential stabilising influences.
July 24, 2026
Show AI Summary
Forward-looking statements receive safe-harbor qualification amid reported IFRS performance, AI-led transformation initiatives, and revised revenue-growth guidance.
Infosys reported first-quarter IFRS financial performance, including revenue growth, operating margin, earnings per share, free cash flow, and large-deal contract value, while revising revenue-growth guidance and retaining operating-margin guidance. The release describes AI-led enterprise transformation, cloud modernization, digital banking, financial-crime operations, and technology services engagements. Forward-looking statements are subject to safe-harbor protection and may differ materially because of business, talent, economic, technological, regulatory, cybersecurity, litigation, investigation, and tariff-related risks.

News

Back

All News

Showing Results for :
Reset Filters
No Records Found

News

Back

All News

Showing Results for : Reset Filters

Highlights Of Hon’ble Finance Minister’s Speech During Debate On Prices In Lok Sabha Today 4 August 2010

August 4, 2010

Contents
Summary
Note

Note

-

Bookmark

Print

Print

I am grateful to the Leader of Opposition for raising the issue of high taxation of petroleum products.  She is correct if taxes go down, the commodities will become cheaper and it will provide a great relief to the consumer.  It is precisely for this reason that my Government has undertaken the single biggest reform in taxation in the form of GST.  As a matter of fact, the principal opposition parties in their manifesto had promised that if voted to power, they will bring in GST. Implementation of GST depends on the cooperation and support of all political parties as constitutional amendments have to be made.  I do hope all the political parties who have expressed grave concern on the price rise and plight of 'Aam Admi' will convert this concern into real action by whole heartedly supporting GST. It's a win win situation for every one.

Inflation has been a matter of grave concern to the Government—more so, for me and my colleagues, Agriculture and Petroleum Minister who have had to take tough decisions in the face of shrill criticism from my friends on the other side of the House.

The Government has been fully aware of its responsibility and has taken determined steps since the end of last year to contain inflation.

In June 2010, the inflation as measured by the Wholesale Price Index (WPI) was10.6 per cent. Among the components, prices of food items rose by to 10.4 per cent, those of fuels by 14.3  per cent and those of manufactured products by 6.7  per cent. Both the aggregate indices and their components point towards pressure fromsupply side factors like food, fuel and commodity prices and demand side factors as the recovery becomes stronger and domestic capacity constraints in many sectors are being reached.

I must remind the hon'ble Members that inflation is a complex problem and it has to be handled with utmost care. In a democratic country, we cannot control inflation by law and decree. In the 60s, 70s and 80s, some nations tried to control inflation by having the government fix the prices. The predominant effect of this was disappearance of goods from the shops. In other words, goods were cheap but not available. At the same time, black markets flourished. We certainly do not want to create such a situation in India. Our priorities in this regard are as follows:

Goods especially food items should be easily available and accessible to people at large.

Remunerative prices be given to those producing and providing goods and services so that producers are encouraged to produce more.

To ensure that the goods including food items are  provided to vulnerable section of society at subsidised prices through an efficient and effective public distribution system.

In order to address the concern of Aam Admi, my Government has given them entitlement to work, information and education for their children backed by legal enactment. Rs 2,31,000 crore has been given to implement right to education which will be shared by Centre and States in ratio of 65:35 respectively.

A policy package has to be carefully crafted to contain inflationary pressures, maintain the growth momentum and restore the fiscal health of the economy.

Let me begin with the food prices. Inflation was very high at the end of last year and even at the start of this year. In the last week of November 2009, the weekly food price inflation stood at over 21 per cent. In February 2010, when I stood up to present the Budget in this House, food price inflation was close to 18 per cent. As a result of the steps taken by the Government, the food price inflation now has come down to 9.67 per cent !

Food prices rose sharply in the later part of 2009 because of the relatively weak south-west monsoon that year. The moderation in prices in response to a good Rabi harvest was gradual even when the harvest came into the markets. An important reason for this was that many of the crops like pulses which contributed significantly to the rising rate of inflation are grown only during the Kharif season. Prices of such crops were not appreciably impacted by the Rabi harvest.

The performance of the south-west monsoon so far this year has been very good. We are looking forward to a bumper Kharif crop and when larger supplies come in at harvest time, it will lead to significant fall in prices of food items.

I, as the Finance Minister, cannot afford to ignore the role of structural factors leading to high food prices. A recent study by NCAER indicates decreasing share of low income households and increasing share of high income households for the period 2001-02 to 2009-10. While 34.6 per cent households were in the low income category in 2001-02, the corresponding figure in 2009-10 is 17.9 per cent. For the same period, the percentage of middle income households has gone up from 58.0 per cent to 61.6 per cent. The high income households have risen from7.3 per cent in 2001-02 to 20.5 per cent in 2009-10. In absolute terms, in 2009-10, India has 46.7 million high income households as compared to 41 million low income households. The middle income households have increased to 140.7 million out of the total of 228.4 million Indian households.

As large numbers of households see their incomes growing as a result of sustained rapid growth, their food consumption patterns are changing. Households are consuming more and more pulses, dairy products, vegetables and sugar.

The entire agriculture system has to gear up to increase the productivity of food items. Growing demand is an inevitable consequence of rapid and inclusive growth.

In my Budget for the year 2010-11, I presented a four-pronged strategy of increasing production, reducing wastages, providing credit to the farmers and giving boost to the agro industry. We have to take the Green Revolution to the eastern region of the country, conserve the gains made in the green revolution areas and organize 60,000 pulses and oil seed villages at the earliest and create food storage capacities and cold chains to preserve food.

We have taken concrete steps in that direction. As a result of policy interventions, the area sown under all Kharif crops has increased to 758.67 lakh hectares from 698.10 lakh hectares last year. The area under foodgrains has increased from 340.61 lakh hectares to 368.36 lakh hectares. Area under pulses and oilseeds has gone up from 75.45 lakh hectares to 87.36 lakh hectares.

To put more money in the hands of farmers, the MSP of wheat has been increased from Rs.640 in 2004 to Rs.1100 per quintal in 2009 - an increase of 70%. Forpaddy, MSP has moved from Rs.560 to Rs.1000 per quintal - an increase of 79  per cent. The new Nutrient Based Fertilizer Policy is being implemented vigorously and is likely to show positive and early results in near future.

To increase production of pulses during Kharif 2010-11, the MSP of Tur, Urad and Moong has been increased substantially. For Tur, it has been raised from Rs.2300 to Rs.3000 per quintal, for Urad from Rs.2520 to Rs.2900 per quintal, Moong from Rs.2760 to Rs.3170 per quintal. As a direct subsidy, farmers have also been provided an additional incentive at the rate of Rs.5 per kg for these pulses sold during the harvest/arrival period of two months to designated procurement agencies.

To make the life of Aam Admi easier, we are taking pro-active steps to revamp the supply chains management. A package of measures including investment linked tax concessions, attractive schemes for encouraging investment in the creation of modern warehousing facilities and establishment of cold chains has already been put in place. We have accordingly amended the The Income Tax Act 1961 to encourage construction of more warehousing facilities by giving tax exemptions to those contributing for the same.

A committee of Chief Ministers has been set up which has been interacting regularly with the Prime Minister, Agriculture Minister and the Finance Minister to find prompt and effective solutions to the problems of agriculture and supply side management.

ANNOUNCEMENTS

Enhancement of allocation for APL families

The Central Issue Price (CIP) of foodgrains meant for the Public Distribution System has remained static since 2002, despite the increasing cost of procurement, in order to ensure food security. The CIP for rice is fixed at Rs 5.65 per kg for BPL and Rs 3 per kg for AAY and while wheat is at Rs 4.15 per kg for BPL and Rs 2 per kg for AAY. For pulses and edible oils, the Government of India is bearing a subsidy of Rs 10 per kg and Rs 15 per kg respectively for distribution of these items through PDS/Fair price shops.

Recently, the Government has also decided on providing, an additional allocation of 4.57 lakh tonnes of foodgrains per month for APL families at the prevailing APL CIP. This is applicable initially for a period of six months to those States where APL allocations are below 15 kg per family per month.

Increase in Guarantee period under the Scheme for construction of godowns through private entrepreneurs.

During last three years, the procurement of foodgrains has increased substantially in several States which has led to an increase in the requirement of covered storage space. The stock of foodgrains in the Central Pool was 583.55 lakh tonnes as on 1.7.2010. As a result, substantial quantity of wheat had to be kept in open in Cover and Plinth (CAP) storage. We have taken several steps to construct additional storage space for storage of procured foodgrains.

Government is releasing funds as equity to Food Corporation of India (FCI) and as grants-in-aid to the North-Eastern States, including Sikkim and J&K, for construction of storage godowns under a Plan Scheme. For the Eleventh Five Year Plan, Rs. 149 crores has been allocated for the purpose. Action is afoot to create 5.25 lakh tones of additional storage capacity in the North-Eastern States with an investment of Rs.568 crores.

However, the Plan funds are not sufficient to meet the additional storage capacity requirements. To bridge the identified storage gap, a scheme was formulated in July, 2008 for construction of godowns through private entrepreneurs. The identification of storage capacity is based on consumption requirement in consuming States and stock levels in procuring States. Additional capacity of 127.65 lakh tonnes has been identified in 15 States for construction under the scheme. Some more capacity is being identified in Decentralized Procurement (DCP) States. The scheme has also been extended to CWC and SWCs where they own land with a six year guarantee and about 8 lakh tonnes capacity is being constructed by them.

            To make the scheme more attractive, the guarantee is now being extended to 10 years. This will encourage private entrepreneurs to take up construction of new godowns under the scheme.

On the energy and commodities front, rising prices during the second half of 2009 and the first half of 2010 reflected the widespread perception that the global economy was out of recession and that the recovery, though slow, would be steady. Also, the rapid resurgence of growth in Emerging Market Economies (EMEs), especially India and China, would contribute to a firming up of demand for these goods.  The overhang of liquidity in global financial markets, which is constantly in search of higher returns also contributed to the re-emergence of energy and commodities as an asset class. These factors combined to accelerate inflation in these components of the WPI.

However, as we look to the second half of the 2010 and beyond, the global economic environment seems to have taken a turn for the worse. There are clear signs that the US recovery is weaker than earlier thought. Europe is dealing with its fiscal risks through aggressive austerity measures. Most significantly, China after busting out of its slowdown, is now again decelerating, at least partly in response to policy measures aimed at controlling a rapid real estate price build-up.

Given these developments, the outlook for energy and commodities prices is one of continuing moderation. To my mind, this should eliminate one significant source of pressure on prices.

From India's perspective, with particular reference to inflation management, these changes in global conditions offered an opportunity for undertaking pricing reforms in the petroleum sector. In fact, the recent increase in domestic petroleum product prices may well be more than off-set, as deregulated domestic prices adjust to a lower international crude oil prices.

Both these supply-side factors, therefore, point conclusively to a significant moderation of inflation over the second half of the current fiscal year.

The third contributor to inflation is pressure from demand. There is no question that the strong recovery, desirable as it is, has contributed to an acceleration of prices. The Reserve Bank of India has been sensitive to these pressures from January onwards when it began a calibrated adjustment of its policy stance to achieve two objectives. First, it needed to withdraw exceptional infusion of liquidity that had been made as a part of the stimulus packages. Then it needed to raise short-term interest rates to levels that would rein in demand, but not to the point of putting a sharp break on the ongoing recovery. The actions taken so far on both the liquidity and interest rate fronts are expected to have an impact on inflation during the second half of the current year.

To sum up, while recognizing that inflation reached unacceptable levels in the first half of 2010, it is expected that all the three major drivers will soften during the second half. Some of this is due to good fortune, some to a fragile global economy and some to a timely and appropriate policy response which will contribute to bringing inflation down without disrupting growth.

On GST, stated position

After careful consideration of the issues raised by the Empowered Committee of State Finance Ministers, we have revised our position to accommodate the concerns of the State Governments. The Central Government is willing to consider a phased approach for the introduction of GST. In a departure from its earlier stand, the Central Government is also willing to accept a dual rate structure in the transitory phase leading eventually to a "model GST".

The revised position on some of the key issues is as follows:

Exempted List

At present, 99 commodities are in the exempted list of VAT. States propose to keep these in the exempted list of SGST. The Central Government would align its exemption list with the State list and keep these 99 commodities as exempted commodities under CGST as well. Similarly, precious metals, bullion and other similar commodities are proposed to be taxed at 1% under CGST so that the 1% list is common both for SGST and CGST. The Centre proposes to shift the remaining commodities which are in the exempted category under Central Excise to the lower rate of the CGST.

Exemption Threshold

As has been agreed in the earlier meeting of EC, uniform threshold for all dealers with a turnover upto Rs.10 lakh per annum will be exempted both from CGST and SGST. The same threshold will apply to the services.

Threshold for compounding for small dealers

Ideally the threshold for compounding (option to pay tax at a fixed percentage of turnover without input tax credit) should be uniform for CGST and SGST at Rs.50 lakh per annum. However, Centre could consider a higher threshold of Rs. 1 crore if the States also agree to raise the limit.

Rate Structure

As you would recall in the meeting held on 13th January, 2010, FM had clearly stated that the ideal position would be to adopt a single rate structure with a common rate for goods and services. However, to facilitate the introduction of GST regime by 1st April, 2011, the Central Government proposes to keep CGST merit/lower rate for goods at 6% and standard rate at 10%. The services will be charged at 8%. Our request to the States will be to consider keeping the same rates i.e. the lower rate for SGST at 6%, standard rate at 10% and services at 8%. This mutually supportive approach will ensure that we have a single rate for CGST and SGST in the range of 12 to 20% in the first year of GST introduction. The peak effective rate will be about 15% which will be quite acceptable to the trade and industry. Eventually, it will settle down to a level of 16 to 18% for both CGST and SGST which will mean an effective rate of 12%.

In the second year of implementation of GST depending upon the revenue receipt by the Centre and the States and payment of compensation by Government of India to the States, the standard rate for SGST and CGST may be reduced to 9% retaining the lower rate at 6%. During the third year of implementation based on our experience and depending upon the buoyancy of revenue receipt and payment of compensation by the Government of India, the standard rate may be reduced to 8% and lower rate increased to 8% and services retained at 8% both for CGST and SGST. Thus, in a phased manner, we will be able to achieve a single CGST and SGST rate for both goods and services.

Topics

Acts Income Tax