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In a blog post published on social media on Friday, Finance Minister Arun Jaitley hinted that Goods and Services Tax (GST) tax rate on luxury and sin goods such as cement, air-conditioners and large screen televisions, among others, could be cut soon.

The finance minister has said that “within a record period of thirteen months, the GST Council has almost phased out the 28 percent category,” with the remaining products being luxury-sin goods.

“The day GST was implemented, several items which were proposed to be put in the 28 percent category (where the 31 percent items were adjusted) were brought down to 18 percent. On 10th November, 2017, within four-and-half months of GST implementation, 177 items and on 21st July, 2018, another fifteen items were brought down. Even in other GST meetings on individual basis, several items were considered and brought down,” Jaitley said in the blog.

“Today, the 28 percent category is being phased out. Bulk of these items remaining in this category are only luxury items or sin goods,” Jaitley added.

Items of common use such as sanitary napkins, footwear and fridge got cheaper as GST rate cut on about 88 items came into effect on Friday.

The GST Council, chaired by interim Finance Minister Piyush Goyal, had last week pruned the highest 28 percent tax slab by moving some goods to the 18 percent tax bracket.

Refrigerator, washing machine, small screen TV, storage water heaters, paints and varnishes will attract 18 percent GST from Friday, as against 28 percent.

Sanitary napkins, which attracted 12 percent GST, have been exempted from tax with effect from Friday.

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Future Generali India Insurance on Tuesday launched a group insurance product that provides financial support to people battling vector-borne diseases.

Vector-borne diseases like malaria, dengue, chikungunya and Zika fever are human illnesses caused by parasites, viruses and bacteria that are transmitted by ticks, fleas, mosquitoes and phlebotomine sandflies.

According to the World Health Organisation, these diseases account for 17 percent of all cases of infectious diseases in the world. 

The insurance policy is available to any person below the age of 65 years, without any medical tests. The sum insured will be between Rs 10,000 and Rs 75,000 per person per year, depending on the plan chosen.  

This insurance plan will provide a lump sum benefit in case the insured gets hospitalised (for a continuous period of 24 hours) due to any of the following diseases caused by vectors -- malaria, dengue, lymphatic filariasis, kala-azar, Japanese encephalitis, chikungunya and Zika fever.  

KG Krishnamoorthy Rao, MD and CEO, Future Generali India Insurance pointed out that not only has there been an increase in the number of claims relating to vector-borne diseases, there has also been a marked rise in the cost of treatment of these diseases. 

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Prime Minister Narendra Modi today blamed earlier governments, particularly then Congress President Sonia Gandhi, for not fulfilling the promise of electrifying all households by 2009.

"Earlier governments made promises, which they failed to fulfil. Then Congress President (Sonia Gandhi) said all households would be electrified by 2009. But that did not happen even in 2009, 2010 or 2011," Modi said during an interaction with the beneficiaries of Rs 16,320-crore Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saughagya) today.

Modi said that the promises made by earlier governments were not fulfilled because there was not serious leader, and now they (opposition) are finding faults with schemes and programmes being implemented by the present government.

He said that all villages in India were electrified by April 28, 2018, which is a historic date; adding, it was pity that after 70 years of independence, people don't have access to electricity.

The Saughagya scheme was launched last year in September under which about 3.6 crore unelectrified households would be electrified by March 31, 2019. However, the government is aiming to energise all these families by December 31, 2018, under Saubhagya.

Earlier this month, power ministers of all states and union territories were unanimous on electrifying all households in the country by December 31, 2018, during the Power Ministers Conference in Shimla.

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The GST Council, chaired by Finance Minister Piyush Goyal in its next meeting on Saturday is expected to discuss key issues such as cutting GST rate on items with limited revenue impact, rationalisation of rates, inclusion of natural gas and aviation turbine fuel (ATF) under the ambit of GST, among others.

According to a senior government official, the consensus between states and the Centre pertaining to the inclusion of the two petroleum products under Goods and Services Tax (GST) may not happen immediately as states have apprehension regarding a potential loss in revenue.

“Some states such as Gujarat, Andhra Pradesh, among others, are against the idea of including natural gas under GST. However, it could be discussed in the Council meeting,” the official said.

Regarding the clamour for rate cut, the official said that revenue continues to be a concern for the government and items with massive revenue impact such as cement and paint may not be brought to a lower tax slab immediately.

The average revenue collection in the first quarter (April-June) of the financial year is not even Rs 97,542 crore.

“Items such as cement, paint, white goods are on the 28 percent (highest) tax slab. A rate cut is possible when the monthly revenue touches at least Rs 1 lakh crore,” the official said, adding that tax collection is expected to increase in the second half of the financial year, with greater demand due to the festive season.

The Council may agree to cut rates of some items such as handicrafts, sanitary napkins, handlooms, the official said adding that the government may not have to take a major hit on revenue if these products are moved to a lower tax slab.

The 28th GST Council meeting is crucial as Goyal will be chairing it for the first time since he got the temporary charge of the finance and corporate affairs portfolio in May. Former finance minister Arun Jaitley is currently working in a restricted environment from home as he underwent renal transplant two months ago.

Till now, Jaitley, had chaired all the 27 meetings of the Council that ironed out crucial taxation-related issues, along with the Centre. He played a crucial role towards the implementation of GST could be a part of the meeting via video conference.

The Council is also expected to approve 46 categories of amendments in GST-related laws, with a broader idea to reduce compliance burden, simplify the indirect tax system and bring more entities under the tax net.

Amendments such as the omission of liability to pay tax on the reverse charge, enabling new return filing procedures, allowing more service providers to opt for composition scheme, among others has been suggested.

The Council may also discuss rationalisation of rates, which could mean drawing a strategy towards fewer tax slabs under GST. Currently, GST has four broad tax slabs- 5, 12, 18 and 28 percent-- and three percent tax on gold and other precious stones.

However, a two or three tier tax slab is possible only when revenue collection is stable, the official said.

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The country's liquefied natural gas (LNG) imports jumped 20 percent year-on-year in the first half of this year on strong growth in demand, S&P Global Platts said today.

It expects imports from the US market to increase in the coming years to meet the increasing demand.

"India's LNG imports jumped by 20 percent in the first six months of 2018 as compared to same period last year due to strong growth in demand," S&P Global Platts' director, LNG market development, Marc Howson, told reporters here.

With the government taking proactive steps to ease infrastructure bottlenecks and push for gas as penetration in the energy mix, Howson said LNG is the only option in boosting the country's gas demand in the next few years.

The country imports nearly 60 percent of LNG from the Middle East and the rest from Australia, West Africa and the US, the global energy, metals and commodities information provider said.

In the world market, China, ranked second, witnessed 50 percent growth in LNG imports, while India was ranked as the fourth largest importer of LNG, Howson said.

"We see higher imports from the US market in coming years. The LNG imports from US market is relatively small at 5 percent at present, which could well grow as US projects ramp-up in the coming years. The US LNG prices are also still competitive to spot price of LNG in India," he said.

The country has over 20 million tonne (mt) of contracted LNG, of which six mt is from the US. The country has contracted to buy $2 billion of US LNG annually for 10 years, S&P Global Platts said.

Howson said the country's gas market has a relatively low penetration of around 6.5 percent of energy mix as against government's target of 15 percent by 2020, due to an inadequate infrastructure of the pipeline for LNG expansion.

He pointed out that the LNG contracted volume and length of the derivatives contracts have drastically declined over the last decade. Historically, the majority of LNG contracts were priced indexed to oil prices, but now more contracts are being priced indexed to gas benchmarks, Howson said, adding that as gas markets become more volatile and buyers have less opportunity to pass through costs in regulated pricing, the importance of gas price hedging has grown.

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China is preparing to give swift regulatory approvals to India-manufactured drugs, the head of an Indian export promotion group said, as Beijing looks for new commercial partners ahead of what could be a protracted trade war with the United States

Indian firms are looking to fill gaps in Chinese demand for generic drugs, software, sugar and some varieties of rice, trade officials in New Delhi said.

"We do feel that China is receptive at this time and it's all about making prices competitive," said a government official involved in the effort to promote trade with China. The official declined to be identified since he is not authorised to speak to the media.

No concrete deals have been signed but the outlook for pharmaceutical sales from India is positive, according to officials from both nations.

India dominates the world's generic drugs market, exporting $17.3 billion worth of drugs in the 2017/18 (April-March) year, including to the United States and the EU. But only one percent of that went to China, the world's second-largest market for pharmaceuticals, industry data showed.

Dinesh Dua, chairman of the Pharmaceuticals Export Promotion Council (Pharmexcil), which falls under India's trade ministry, told Reuters in an interview that Indian firms could expect to win licences to export to China within six months of application.

"We understand internally that Chinese authorities have issued instructions that EU-approved Indian suppliers should be granted the industrial drug licence in an expeditious manner so they can enter the Chinese market within six months," Dua said.

Many Indian drug-makers are already selling to the European Union. The EU is already one of India's key export markets for medicines, and accounted for about 15 percent of overall drug exports in 2016/17, according to Pharmexcil.

Swift regulatory approvals in China, the world's second-largest drug market, would allow Indian companies to boost revenue at a time when pricing scrutiny and regulatory troubles have hurt US sales.

Some of India's largest drugmakers, Sun Pharmaceutical Industries and Lupin Ltd as well as Aurobindo Pharma Ltd have been trying for years to expand in the massive Chinese market, which is second only to the United States.

Details of Chinese moves to open up its heavily regulated pharmaceuticals sector have not been previously reported.

The CFDA did not respond to a Reuters' request for comment.

But Chinese Foreign Ministry spokesperson Hua Chunying said this week that China was moving forward on giving greater market access to Indian drug makers.

"China and India are witnessing a growth in pharmaceutical trade, and the two sides are in sound communication on opening the Chinese market to drugs from India and conducting dialogue and cooperation between the two sides' pharmaceutical industries," Hua told a regular news conference on Monday.

"The relevant departments have formulated specific measures on promoting China-India pharmaceutical trade cooperation and granting greater access to drugs from India. We believe that stronger pharmaceutical trade cooperation will contribute to the well being of the people in our two countries."

PENDING CLEARANCE

In May, China exempted import tariffs on 28 drugs, including all cancer drugs, a move that would help India reduce its trade imbalance with China, Luo Zhaohui, the Chinese ambassador to India said.

About 250 product applications from Indian drug firms are pending before the China Food and Drug Administration (CFDA), some of them for years, an Indian trade ministry official said.

Bilateral trade between the two Asian nations touched $89.6 billion in 2017/18 with the trade deficit widening to $62.9 billion in China's favour, an over nine-fold increase over the last decade.

The two sides are discussing ways to increase Indian sales of farm products, including sugar and some varieties of rice, to China.

India is also trying to persuade China to give access to its cost-competitive software service firms that have dominated global markets. Some of these firms are pitching for 'smart' manufacturing projects in the central city of Wuhan and two other provinces in the healthcare and automotive sector.

But it is in the drugs sector that India is hoping to make the first dent, according to officials and a government document.

China has agreed to train Indian pharmaceutical executives to help them gain a swifter entry into the Chinese market, a government document seen by Reuters on efforts to improve trade with China showed. The training is planned for next month.

India's Pharmexcil and the China Chamber of Commerce for Import and Export of Medicines and Health Products will shortly sign an agreement to ease clearance processes and help Indian companies find Chinese partners, according to the document.

Dua and the Indian trade ministry official said China will soon open a desk at its embassy in New Delhi to facilitate Indian drug makers.

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China is preparing to give swift regulatory approvals to India-manufactured drugs, the head of an Indian export promotion group said, as Beijing looks for new commercial partners ahead of what could be a protracted trade war with the United States

Indian firms are looking to fill gaps in Chinese demand for generic drugs, software, sugar and some varieties of rice, trade officials in New Delhi said.

"We do feel that China is receptive at this time and it's all about making prices competitive," said a government official involved in the effort to promote trade with China. The official declined to be identified since he is not authorised to speak to the media.

No concrete deals have been signed but the outlook for pharmaceutical sales from India is positive, according to officials from both nations.

India dominates the world's generic drugs market, exporting $17.3 billion worth of drugs in the 2017/18 (April-March) year, including to the United States and the EU. But only one percent of that went to China, the world's second-largest market for pharmaceuticals, industry data showed.

Dinesh Dua, chairman of the Pharmaceuticals Export Promotion Council (Pharmexcil), which falls under India's trade ministry, told Reuters in an interview that Indian firms could expect to win licences to export to China within six months of application.

"We understand internally that Chinese authorities have issued instructions that EU-approved Indian suppliers should be granted the industrial drug licence in an expeditious manner so they can enter the Chinese market within six months," Dua said.

Many Indian drug-makers are already selling to the European Union. The EU is already one of India's key export markets for medicines, and accounted for about 15 percent of overall drug exports in 2016/17, according to Pharmexcil.

Swift regulatory approvals in China, the world's second-largest drug market, would allow Indian companies to boost revenue at a time when pricing scrutiny and regulatory troubles have hurt US sales.

Some of India's largest drugmakers, Sun Pharmaceutical Industries and Lupin Ltd as well as Aurobindo Pharma Ltd have been trying for years to expand in the massive Chinese market, which is second only to the United States.

Details of Chinese moves to open up its heavily regulated pharmaceuticals sector have not been previously reported.

The CFDA did not respond to a Reuters' request for comment.

But Chinese Foreign Ministry spokesperson Hua Chunying said this week that China was moving forward on giving greater market access to Indian drug makers.

"China and India are witnessing a growth in pharmaceutical trade, and the two sides are in sound communication on opening the Chinese market to drugs from India and conducting dialogue and cooperation between the two sides' pharmaceutical industries," Hua told a regular news conference on Monday.

"The relevant departments have formulated specific measures on promoting China-India pharmaceutical trade cooperation and granting greater access to drugs from India. We believe that stronger pharmaceutical trade cooperation will contribute to the well being of the people in our two countries."

PENDING CLEARANCE

In May, China exempted import tariffs on 28 drugs, including all cancer drugs, a move that would help India reduce its trade imbalance with China, Luo Zhaohui, the Chinese ambassador to India said.

About 250 product applications from Indian drug firms are pending before the China Food and Drug Administration (CFDA), some of them for years, an Indian trade ministry official said.

Bilateral trade between the two Asian nations touched $89.6 billion in 2017/18 with the trade deficit widening to $62.9 billion in China's favour, an over nine-fold increase over the last decade.

The two sides are discussing ways to increase Indian sales of farm products, including sugar and some varieties of rice, to China.

India is also trying to persuade China to give access to its cost-competitive software service firms that have dominated global markets. Some of these firms are pitching for 'smart' manufacturing projects in the central city of Wuhan and two other provinces in the healthcare and automotive sector.

But it is in the drugs sector that India is hoping to make the first dent, according to officials and a government document.

China has agreed to train Indian pharmaceutical executives to help them gain a swifter entry into the Chinese market, a government document seen by Reuters on efforts to improve trade with China showed. The training is planned for next month.

India's Pharmexcil and the China Chamber of Commerce for Import and Export of Medicines and Health Products will shortly sign an agreement to ease clearance processes and help Indian companies find Chinese partners, according to the document.

Dua and the Indian trade ministry official said China will soon open a desk at its embassy in New Delhi to facilitate Indian drug makers.

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The Centre and the Reserve Bank of India (RBI) are planning to set up a database or a 'search engine' to track  all non-cash financial transactions in the country, the Times of India reported.

The move is aimed at widening the government's crackdown on black money and will help RBI establish a money trail to investigate money laundering cases and operations of shell companies.

The new platform will allow RBI to record all non-cash transactions and share them on a need-to-know basis, a senior government officer told the newspaper.

"It is not going to be available on tap but will be shared based on a specific request," the officer was quoted as saying.

The RBI has reportedly held preliminary discussions on the matter after the finance ministry, income tax department and some investigating agencies deliberated on it in order to widen their scope of cracking down on shell companies and money laundering.

It is not clear whether the proposed tool will be sufficient to help investigating agencies track transactions meant to siphon off money. Tracking all transactions related to an entity and its key functionaries may be difficult in the current setup, officials told the paper.

Also read — What are shell companies? All you need to know

The government feels that a trail of transactions is crucial to get rid of shell companies. Theoretically, shell companies are companies without active business operations or significant assets. They can be set up by business people for both legitimate and illegitimate purposes.

These entities may route funds through a maze of companies and earn a commission for it.

As of now, the Financial Intelligence Unit tracks suspicious transactions and all cash transactions of over Rs 10 lakh.

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China's exports to the United States in June rose 3.8 percent from a year earlier in yuan terms, 23.8 percentage points lower than the growth rate seen a year earlier, the country's customs agency said late on Monday.

For the first half of this year, customs said China's exports to the United States rose 5.4 percent from a year earlier compared with 19.3 percent for same period in 2017.

The customs agency did not provide exact values for June and January-June exports or say how exports to the U S fared in dollar-denominated terms.

Beijing and Washington are set to impose imports tariffs against each other on July 6 amid an escalating trade dispute that has spooked investors and has driven Chinese stocks and the yuan lower.

China is due to publish preliminary June trade data on July 13.

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Consumer durables companies took a hit in May 2017 when it was announced that Goods and Services Tax would be levied on almost 80,000 products. GST for white goods, including refrigerators, washing machines and air conditioners was set at 28 percent, the highest among the four tax slabs for goods and services.

The sector received another blow when it was announced that there will no extension to the implementation of the tax and that it would come into effect on July 1.

At the time, dealers started making frantic calls to company representatives to understand what GST was all about. The entire inventory had to be re-labelled, systems had to be reconfigured and discounts (if any) had to be immediately passed on.

The situation was tricky as 28 percent tax on goods had a direct impact on production costs. Moreover, a sudden increase in prices would lead customers to postpone their buying decisions. Unsold inventory also would have to be priced differently as compared to fresh stocks.

“The first three to four weeks were a nightmare. Customers wanted discounts because they presumed we were being offered a lower rate of tax, dealers threatened to shut down sales if we didn’t help with the technology upgradation. All prior sales targets had to literally thrown into the bin because we didn’t know what penalties we could face,” the national sales head for a global appliances major said.

As the GST Council had just started to meet, manufacturers had a unanimous request that taxation should be brought down to 18 percent instead of 28 percent. However, the demand has not been met since.

Sales take a hit

In the initial months, when the processes were unclear, sales of consumers durables declined. Customers were not making purchases and dealers refused to stock more than a few thousand goods.

In the second quarter, sales data of most companies saw a clear dip and firms had anticipated the decline.

Vivek Saran, Head of Sales, Mirc Electronics said that there was some impact on sales during the July to September quarter in FY18 as trade (dealers) restricted buying for some time and wanted things to be streamlined. Sales normalised from the following quarter.

“Since traders were liquidating their old stocks at huge discounts till June 30 to reduce their inventories, consumers also preponed their festive purchases,” he added.

Sales of key players sees drop

Another dealer from South Mumbai who stocked all domestic appliances said that for certain products like LED televisions, they ran out of stock during the last few days before GST was implemented.

“We had never faced a situation like this. We had angry customers wanting to buy products and there was nothing we could do because we were running out of inventory. Discounts ranged from 25 percent to as high as 35 percent but stocks were limited,” he added.

Mathew Job , CEO, Crompton Greaves Consumer Electricals said that during the implementation of GST, there was some impact on sales due to destocking in the channel. Things have slowly returned to normal over the course of time.

“We helped our trade partners by conducting training sessions and seminars explaining the impact of GST as well as ensuring their preparedness. We also supported them by reimbursing them for the losses that they suffered on the transitional stock,” he added.

Puzzled customers vent out

On one hand, the government announced that there would be heavy penalties for any profiteering move by companies. This meant that even if there was a marginal relief for some companies due to the input tax credit on closing stocks, it had to be passed on.

Customers presumed that white goods would get cheaper. On the other hand, prices for most products either remained same or were increased marginally. This led to the confusion among buyers.

The Central Board of Excise and Customs (CBEC) had constituted a toll-free helpline where customers started to file complaints.

Abhishek Saraoge, a 35 year software engineer from Bengaluru said, “A double-door refrigerator that we were planning to buy saw a price increase of Rs 6,000 in two days. We had to drop the plan of purchasing it and waited for three months before finally buying it online.”

Social media was also abuzz with customers venting out their frustration over non-availability of products as well as price tweaks being made.

Normalcy settles in

Kamal Nandi, Business Head and Executive Vice President, Godrej Appliances said that the new GST regime did bring about some ease of doing businesses.

“The elimination of the state boundaries for transporting goods have facilitated direct deliveries from the plant to the trade partners. This also gave manufacturers the option of consolidating warehouses, optimizing logistic cost,” he added.

He explained that post implementation, GST improved supply chain efficiencies for the industry. GST has brought ‘borderless delivery’ by enabling companies to deliver directly from manufacturing plant to the dealer. In pre-GST era the material would go from the plant to our local warehouse and then to the dealer warehouse. Direct delivery helps in improving response time for markets. Now, there is an opportunity for warehouse space optimization as well.

This year, Godrej is planning to do 20 percent of their deliveries directly from the plant to dealers.

Players wait for tax reduction

Nandi said that with increased commodity prices and repo rate coupled with the strengthening of the dollar the input cost for appliances increased leading to a price hike of 2-3 percent, making appliances unaffordable.

“Any reduction in the tax slab will help offset this hike, which would be beneficial to the customers and lead to a spur in demand, thereby augmenting economic growth in the manufacturing sector,” he added.

Consumer durables companies have met the GST Council time and again to press for the 18 percent tax slab demand. While an immediate revision in the tax rate is not on the anvil, the GST Council could consider the request in the next few months.