Bar-coding for exports: Small-scale pharma producers get relief

The Centre has decided not to take any immediate action against small-scale manufacturers of pharmaceuticals who have not fully implemented the track-and-trace bar-coding requirements for exports by the stipulated deadline of March 31, 2017.

Instead, the Commerce and Pharmaceuticals Departments are discussing ways to help the small manufacturers finance the machinery and infrastructure needed to implement the “parent-child relation’’ system for exports, a government official has said.

“There are some very small pharmaceutical companies who are finding it hard to come up with the resources to install the required machinery, including scanners. They have sought help from the government in the form of subsidies. We are examining in what form we could give them the required financial support,” the official said.

The Centre had put in place procedures relating to tracking and tracing of export consignment of pharmaceuticals and drugs using bar code technology in 2014 to prevent substandard or fake medicines manufactured illegally in other countries (including China) entering international markets with a ‘made in India’ tag. While most large and medium exporters have the system in place, the small manufacturers are lagging.

The Commerce Department has asked to the Pharmaceuticals Department to examine if there is any way of including subsidies for bar-coding infrastructure for the SSI sector under any of their existing schemes on quality upgradation.

“Once the new pharmaceutical policy, under deliberation, comes through, some provisions could be made on this. Till then, the Centre is not likely to take any action against small drug producers who haven’t the required bar-coding systems in place,” the official added.

The track and trace systems is unique with identifying printed code on each product in various stage of packaging and it allows traceability throughout the supply chain and helps in facilitating the manufactures’ identifications.

While bar code labelling at primary level (the material that first envelops the product) is voluntary, it is mandatory on secondary level packaging (boxes, cartons etc) and tertiary level (bulk handling & shipping in barrels etc).

The government also mandated implementation of parent-child aggregation at the secondary and tertiary levels of packaging for exports which basically means maintaining data (based on a unique ID) on which secondary packages went in which tertiary shipper.

The deadline for the SSI manufacturers to implement it was extended to March 31 2017, which has now lapsed.

01 Aug 2017 ITP ITP
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Govt targets $60 billion gems, jewellery exports by 2022

Mumbai: The government hopes the gems and jewellery sector to grow 6-7% per annum and has set at target of $60 billion exports by 2022 from the present $43 billion, a senior officer said here on Thursday.

“We are hopeful of country’s gems and jewellery exports to touch $60 billion by 2022 and expect 6 to 7% growth in exports annually,” department of commerce joint secretary Manoj Dwivedi told reporters on the sidelines of a jewellery show here.

India exported gems and jewellery worth $43.2 billion during fiscal 2017, a rise of nearly 10% over the previous fiscal’s export figure of $39.2 billion. After inaugurating 34th edition of the India International Jewellery Show, IIJS 2017, Dwivedi said, “the jewellery industry needs to achieve a higher scale of achievement in the coming years in order to become globally competitive and promote jewellery exports”.

“The government is making various policy initiatives to find out ways and means to improve this sector since it is only sector having maximum employment opportunities to both skilled and unskilled workers pan India,” he added.

Although the downward trend witnessed in the global markets, the country’s gems and jewellery exports showed upward trend, which is very positive sign, he said. “We want to explore new markets for jewellery and diamond exports for which process is on,” Dwivedi said.

 

Praveenshankar Pandya, chairman, GJEPC, said that having crossed the $40 billion exports mark, the trade body is now devising a strategy named Vision 2022 to enable India attain global leadership position in gems and jewellery.

“We have set the exports target of $60 billion by 2022 and $80 billion by 2025. The trend this year is good and we target growth of 10% in the current year. We will be happy to register $47 billion exports this year,” he said.

On the sidelines of IIJS 2017, GJEPC also signed a MoU with Diamond Producers Association (DPA) to support the miner-backed group’s international diamond- jewellery promotion efforts. The industry will be spending $200 million for the promotions of the trade across the globe and India may get share of around $5 million for the promotions, Pandya added.

Meanwhile, India International Jewellery Show, a five-day B2B event which opened on Thursday, is expected to provide business opportunity to explore the various multi-faceted aspects of the industry. The event witnessed more than 870 exhibitors participation, which includes participation from 30 countries.

01 Aug 2017 ITP ITP
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India’s finished steel export rises by 6% in July, import also increases

India’s finished steel export increased by 64.2% in July 2017 and reached to 0.770 million tonnes (mt) from 0.469 mt in July 2016. The imports of finished steel also increased by 42.2% and grew from 0.561 mt in July 2016 to 0.798 mt in this July.

This data was published by a report by Joint Plant Committee (JPC) that collects data on the steel and iron industry of the nation. JPC is backed by the Ministry of Steel and is the only organization that collects data on this industry.

As per the report, “India was a net importer of total finished steel in July 2017 but maintained its net exporter status for the cumulative period, i.e. during April-July 2017”.

During the said period of April-July 2017, the export of total finished steel surged up by 65.5% and reached 2.807 mt from the 1.696 mt recorded during the same period in last year as per the same report.

In the same period, the import of total finished steel was at 2.505 mt which was 4.7% higher from 2.393 mt in April-July 2016. The Total finished steel consumption increased by 3.7% reaching 6.905 mt in July 2017 from 6.660 mt recorded in July last year.

The report also told that the overall consumption fell down by 4.2% in July 2017 when compared with consumption of 7.210 mt in June 2017.

The consumption of total finished steel in April-July 2017 increased by 4.4% from26.736 mt in April-July 2016 to27.911 mt. This increase was mainly due to increase in production for sale and imports.

India is the third-largest producer of crude steel in the world after China and Japan and now aiming to go the second place.

21 Aug 2017 ITP ITP
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India-made garments have the largest pie in US imports in H1

For the first time in the history of India’s garment exports to the US, the country has clocked top position in market share in the category ‘men/boys knitwear shirts cotton’ (a variety of knitwear) for the first six months of 2017.
 
This was attributed to the slowdown in Exporters, however, said they will not be able to retain top position. Exporters say that since the US market offers a level playing field, they were able to compete with other countries, but the recent appreciation of the rupee against the dollar will be a major hurdle to them.

The data released by the Office of Textile and Apparel, US department of commerce, show that India exported 8.5 million dozens of men/boys shirts cotton to the US. India’s share in men/boys knitwear shirts import by the US stood at 8.7 per cent in June.
 
After a dip in 2014, India’s market share has been growing steadily. In 2013, India’s market share was 6.4 per cent and dropped to 6.2 per cent in 2014. From then it has been steadily increasing, and in 2016 it stood at 7.8 per cent.
 
Contrary to that, China’s market share, which was 11 per cent in 2012, dropped to 9.6 per cent in 2016 and is now 8.5 per cent. In other segments including women/girls knit shi-rts/blouses, cotton, men/boys cotton trousers, breeches, shorts, and cotton nightwear/pajamas, India and others’ market shares have increased.
 
While China’s loss is India’s gain, exporters are not happy because Vietnam is running India close. Bangladesh is also increasing its market share. The data show Vietnam exported 8.47 million dozens of men/boys knitwear to the US. Tirupur Exporters Association President Raja M Shanmugam said heavy investment increased India’s share in export. “The US is the only country that gives us a level playing field, and that is why we could compete,” said Shanmugam, adding that the country was losing the edge now because production cost was increasing here.
 An exporter said: “We will not be able to compete with Vietnam or with any countries because products made here are becoming costlier.”
 For example, exporters are quoting 3-5 per cent higher prices after the rupee appreciated, while the hike should be of around 7 per cent to compensate them for the losses on account of currency fluctuation. On the other hand, competitors' currencies have depreciated and they are bringing down the prices.

21 Aug 2017 ITP ITP
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LUXURY CARS CESS : GST Council approves hike in luxury car cess

If you are thinking of buying an SUV or a luxury sedan, then You might want to hurry up and decide quickly as the Goods and Services Tax Council is said to have decided to raise the cess on luxury automobiles to 25% from 15% now. To be sure, the rates may not go up immediately as any increase in the cess will require an amendment to the GST compensation law.  The council approved an amendment to the GST law to enable an increase in the rate of levy of compensation cess," said a government official aware of the council's deliberations on Saturday.  The overall view within the council was to have the cess on high-end automobiles pegged higher so that it can be increased if the need arises, the official added.  Cars have been placed in the highest 28% tax bracket under GST, which has replaced 17 state and central taxes as also 23 cesses. It should be noted that the GST Council has already set the maximum levy inclusive of cess at 40%.  Small petrol cars of 4 metres length and up to 1,200 cc engine capacity attract a 1% cess while diesel cars of that length and up to 1,500 cc capacity face a 3% cess. The cess on mid-size, large cars or SUVs is 15%, which added up to a reduction in levies on some models under the GST regime.  A number of car makers had cut prices after the rollout of GST on July 1 to pass on the reduction to buyers. However, some car makers had to raise prices of small cars after the cess was imposed on them.  The government maintains that industry stands to benefit from seamless input tax credit and should help reduce prices overall. The Centre introduced a separate GST (Compensation to the States for Loss of Revenue) Bill, 2016, for the imposition of a cess on certain luxury goods and so-called sin goods to compensate states for any loss of revenue due to the implementation of GST.  A provision to compensate states was also made in the constitutional amendment that makes it mandatory for the Centre to provide for compensation to the states for loss of revenue arising on account of implementation of the GST for a period of five years. 

10 Aug 2017 ITP ITP
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CBEC gives this clarification on GST rates on sweets, garments.

Sandesh, the famous sweet made from concentrated milk, will attract 5% goods and services tax (GST) even when prepared with a chocolate layer, the Central Board of Excise and Customs (CBEC) clarified on Thursday. Sandesh, the famous sweet made from concentrated milk, will attract 5% goods and services tax (GST) even when prepared with a chocolate layer, the Central Board of Excise and Customs (CBEC) clarified on Thursday. It added that any ingredient — khoya or male — prepared from concentrated milk will be taxed at 5%. The clarification on GST rates was issued by CBEC through a set of frequently-asked questions (FAQs). “The sweet shops in Kolkata were under panic because there were apparently different GST rates based on the type of sweet and ingredients. Now the government has clarified that GST rate on all Bengali sweets is 5%,” Archit Gupta, founder and CEO of ClearTax, said. Additionally, the department also clarified rates of certain items that fell under two different categories. For instance, while fresh tamarind will attract 0%, dry tamarind will be levied with 12% GST, CBEC said. Similarly, it was clarified that ready-made garments would be taxed on the actual sale value and not on the maximum retail price. “The sale value referred to in the notification refers to the transaction value and not the retail sale price of such ready-made garments,” CBEC said. If a wholesaler supplies ready made garments for a transaction value of Rs 950 per piece to a retailer, the GST levy would be at 5%, CBEC said. It added that if the retailer sells such garments for Rs 1,100 per piece, the GST levied on this will be 12%. Clarity is still needed for many items such as automobile repairs, movie halls. Local bodies are allowed to levy their own tax thus bringing the total taxes to 58% in places like Tami Nadu (28% GST+30%). There is still no clarification regarding the various state tax holidays and state benefits enjoyed by many industries,” Gupta said.

10 Aug 2017 ITP ITP
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GUAR EXPORTS : Guar prices surge on good exports, heavy rain

Guar prices have jumped about 10% in the last one month due to good export demand for guar gum and excessive rain in the guar growing areas of Rajasthan and Gujarat, which have damaged the crop in large areas. In futures market, guar seed prices have moved higher by more than Rs 300 per quintal while guar gum prices have increased by nearly Rs 700 per quintal during the last one month. The most active guar contracts for October delivery at the National Commodity and Derivative Exchange (NCDEX) have been trading on a positive note in the last two weeks.Guar seed prices increased 6.3% or Rs 210 to trade at Rs 3,632 per quintal while guar gum prices jumped close to 9.4% or Rs 676 to trade at Rs 7,724 per quintal during the timeframe. As per the data from the Agricultural and Processed Food Products Export Development Authority, India's guar gum exports for first three month of 2017-18 almost doubled to 145,775 tonne due to higher demand from the US. "The US is expanding its shale gas production in which guar gum is used as a fracking agent. India mainly exports guar gum to the US, Germany, Russia and China, which is used largely by the oil extracting companies," said Ritesh Kumar Sahu, fundamental analyst, agri commodities, Angel Commodities Broking.

As exports are picking up, the area under guar is also seen higher this season.Despite higher acreage, there are reports of largescale damage to standing guar crops due to excess rain during the last week in the major guar sowing districts of western Rajasthan. These districts that include Bikaner, Barmer, Jaisalmer, and Jodhpur account for more than 80% of guar acreage in Rajasthan.According to the Indian Meteorological Department, the cumulative rainfall received from June 27 to July 2 in Western Rajasthan has been 231% of the benchmark long period average (LPA) with rain of 66.8 mm against normal of 20 mm.

09 Aug 2017 ITP ITP
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Calls for rate reviews for 150 items with GST Council

Nearly 150 proposals for reduction of tax rates on items ranging from clay idols and dhoop battis, dosa and idli batters, macaroni pasta to granite raw blocks and scientific instruments have been examined by the Fitment Committee of officials under the Goods and Services Tax Council since the first month of the roll out of the levy.

Significantly, it is understood to have ruled out any reduction in the rate on hybrid cars where the industry had wanted the compensation to be lowered by three per cent.

For many food items, such as sharbats with synthetic flavouring, treatment of dried methi patta as spices or dried vegetables, sweets and milk products served in restaurants and considering chikki and kheer as sweets for a lower tax rate, the Committee has suggested clarifications to remove any doubts.

The GST Council in its meeting on Saturday revised the rates of items such as job works in textiles to five per cent, some tractor parts to 18 per cent and rent-a-cab service and goods transport agency services to 12 per cent with full input tax credit. (See chart)

Many of the remaining proposals will be taken up by the Council in its next meeting on September 9 in Hyderabad, Finance Minister Arun Jaitley has said.

E-way Bill software

National Informatics Centre has been asked to develop the E-Way Bill software. Though some States like Delhi have protested, the GST Council has decided to notify the E-Way Bill at the earliest.

While the government hopes the new E-Way Bill will remove checkposts and ensure smooth movement of goods, Delhi Deputy Chief Minister Manish Sisodia said that he had opposed the plan as it goes against the “fundamental concept of GST”.

“Why we need E-Way Bill? GST was brought on ‘One Nation - One Tax - One Market’? We have to come out of ‘Inspector Raj’ mindset,” he said.

Officials to monitor

A committee of officials from the Central Board of Excise and Customs, Ministry of Road Transport and Highways, GST Network and State tax officials will work with NIC to monitor the development of the software.

The E-Way Bill, which mandates pre-registration of goods costing over ?50,000, is expected to be implemented by October 1. E-Way Bills would be valid for a period between one day and 20 days depending on the distance to be travelled. The Council has decided that items exempt from GST would not require an E-Way Bill. Similarly, for inter-city movement of goods up to a distance of 10 kilometres, no such document would be needed.

Goods being transported from a non-motorised vehicles like carts and rickshaws or being transported from a port, airport, air cargo and land customs complex to an inland container depot or freight stations will also be exempt. The GST Council also appealed to industry to pass on price benefits of the new levy to consumers.

But, States and the Centre will set up over the next 15 days their respective Screening Committees to monitor complaints on price hike.

07 Aug 2017 ITP ITP
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India wants quick deal on BIMSTEC free trade

With an eye on bypassing Pakistan and boosting regional trade, India is aggressively pushing for the conclusion of long-pending Free Trade Agreement (FTA) under the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) by November during the Summit meeting.

Conclusion of the FTA in goods, the talks for which were launched in 2004, will be one of the topmost agenda items of External Affairs Minister Sushma Swaraj during the upcoming BIMSTEC Foreign Ministers’ Meeting that is scheduled to be held in Nepal on August 10-11, according to sources.

However, though the government is keen on concluding the FTA, a lot of hurdles need to be crossed before all members agree to sign the pact, the primary reason being disagreement between India and Thailand over market access for professionals, duty cuts on traded goods and policy relaxation, sources told Businessline.

“BIMSTEC needs to produce a few visible results or successes in the short term. Concluding the protracted negotiations for a Free Trade Agreement in goods, and later, services, and investment, is the way forward. Without an appropriate FTA, the grouping will continue to be perceived as an empty shell,” said Rajiv Bhatia, former Indian Ambassador to Myanmar, now Distinguished Fellow at Gateway House, a Mumbai-based foreign policy think-tank.

The BIMSTEC Trade Negotiating Committee last met in 2015 despite the leaders push to expedite it in the last summit held in October 2016.

Sources said the major difference in BIMSTEC FTA is that India wants to negotiate the pact afresh and not what was agreed in 2004, when the FTA framework was signed, whereas all other member countries want to maintain status quo.

One of the main reasons why the FTA remained stalled all these years is due to differences between India and Thailand over market access. While India has demanded easing of rules for its professionals, Thailand has asked for relaxation in the foreign investment rules in multibrand retail trade for its retailers.

Moreover, Bangladesh and Sri Lanka are pushing for the entry of China into the grouping, which is technically not possible at this stage, albeit it can join BIMSTEC as ‘observer.’

“BIMSTEC FTA should be negotiated quickly and can be concluded if the political will is there. In non-economic front it has moved fast and same can be followed in the FTA process,” said Prabir De, Professor and Coordinator of ASEAN-India Centre, Research and Information System for Developing Countries.

This year the BIMSTEC – India, Thailand, Mynamar, Nepal, Bangladesh, Sri Lanka, Bhutan – will complete 20 years since it was established. As a result, India wants the FTA to be concluded this year to assert its “relevance” especially at a time when the government when the SAARC is in doldrums and India wants to bypass Pakistan in all its sub-regional economic and non-economic arrangements, sources added.

With an eye on bypassing Pakistan and boosting regional trade, India is aggressively pushing for the conclusion of long-pending Free Trade Agreement (FTA) under the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) by November during the Summit meeting.

Conclusion of the FTA in goods, the talks for which were launched in 2004, will be one of the topmost agenda items of External Affairs Minister Sushma Swaraj during the upcoming BIMSTEC Foreign Ministers’ Meeting that is scheduled to be held in Nepal on August 10-11, according to sources.

However, though the government is keen on concluding the FTA, a lot of hurdles need to be crossed before all members agree to sign the pact, the primary reason being disagreement between India and Thailand over market access for professionals, duty cuts on traded goods and policy relaxation, sources told Businessline.

“BIMSTEC needs to produce a few visible results or successes in the short term. Concluding the protracted negotiations for a Free Trade Agreement in goods, and later, services, and investment, is the way forward. Without an appropriate FTA, the grouping will continue to be perceived as an empty shell,” said Rajiv Bhatia, former Indian Ambassador to Myanmar, now Distinguished Fellow at Gateway House, a Mumbai-based foreign policy think-tank.

The BIMSTEC Trade Negotiating Committee last met in 2015 despite the leaders push to expedite it in the last summit held in October 2016.

Sources said the major difference in BIMSTEC FTA is that India wants to negotiate the pact afresh and not what was agreed in 2004, when the FTA framework was signed, whereas all other member countries want to maintain status quo.

One of the main reasons why the FTA remained stalled all these years is due to differences between India and Thailand over market access. While India has demanded easing of rules for its professionals, Thailand has asked for relaxation in the foreign investment rules in multibrand retail trade for its retailers.

Moreover, Bangladesh and Sri Lanka are pushing for the entry of China into the grouping, which is technically not possible at this stage, albeit it can join BIMSTEC as ‘observer.’

“BIMSTEC FTA should be negotiated quickly and can be concluded if the political will is there. In non-economic front it has moved fast and same can be followed in the FTA process,” said Prabir De, Professor and Coordinator of ASEAN-India Centre, Research and Information System for Developing Countries.

This year the BIMSTEC – India, Thailand, Mynamar, Nepal, Bangladesh, Sri Lanka, Bhutan – will complete 20 years since it was established. As a result, India wants the FTA to be concluded this year to assert its “relevance” especially at a time when the government when the SAARC is in doldrums and India wants to bypass Pakistan in all its sub-regional economic and non-economic arrangements, sources added.

07 Aug 2017 ITP ITP
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EXPORTERS ASSOCIATIONS WELCOME REPO RATE REDUCTION

COIMBATORE: Exporters associations in Coimbatore have welcomed slashing of repo rate by 25 basis points from 6.25% to 6%. In a press release issued on Wednesday, president of the Tiruppur Exporters' Association (TEA) Raja M Shanmugham thanked the monetary policy committee of the RBI for reduction of repo rate from 6.25% to 6% which is in the expected line. He appealed to the banks to pass on the rate cut benefits to exporters, who have been struggling and facing initial hiccups after implementation of the GST since July 1. Raja M Shanmugham said the association had already made representations to all banks for enhancing the limit to ease the working capital blockage and hope the banks would consider the genuine requisition of exporting units, particularly small and micro enterprises in the export sector and also pass on the rate cut benefits. While welcoming the cut the repo rate by 25 basis points to 6%, the regional chairman of Federation of Indian Export Organisations, A Sakthivel, said that it would trigger hope of lower borrowing costs for industry.

06 Aug 2017 ITP ITP
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