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Customs exemption on open-cells for LED panels: Government studying extension plea

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The zero customs duty on open-cells for LCD/LED panels used for televisions may get a temporary extension. The government is studying a proposal to extend the nil duty by another six months. Currently, this is valid till September 30.

Imposition of customs duty would lead to an immediate hike in prices of televisions. This is because open cell is what makes the LED/LED screen of a television function effectively. The entire open-cell component is imported from South-East Asian markets.

LED TVs comprise one of the largest segments under the entire domain of Appliance and Consumer Electronics, accounting to a volume of almost 15 million with an estimated sale value of almost Rs. 40,000 crore.

"While the emphasis is on Make in India, the government is cognisant of the fact that key components for products like televisions do not have local manufacturing capacity," said an official.

In September 2019, the Ministry of Finance had said the open-cells for LCD/LED panels will not attract any customs duty. The ministry had said that it will be valid till September 30, 2020 post which local manufacturing of open cell could be incentivised.

In her Budget speech, Finance Minister Nirmala Sitharaman said that it has been observed that imports under Free Trade Agreements

(FTAs) are on the rise.

"Undue claims of FTA benefits have posed threat to domestic industry. Such imports require stringent checks. In this context, suitable provisions are being incorporated in the Customs Act. In the coming months we shall review Rules of Origin requirements, particularly for certain sensitive items, so as ensure that FTAs are aligned to the conscious direction of our policy," she had said.

It is to be noted that televisions are also a category where FTAs are being used in a small way to source products/parts from outside. This will also be under review.

She also said that the custom duty exemptions shall be comprehensively reviewed by September, 2020 for taking a view on their relevance.

Currently, the zero customs duty is applicable for open-cell (15.6 inches and above) used in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels. Further, components like the chip on film, printed circuit board assembly and cell used in LCD/LED TV panels will also be exempt from customs duty.

Open-cell is a critical component used in manufacturing television sets. At present, there is no local manufacturing of open cell in India so a higher customs duty meant that TV prices stayed high.

The LED TV industry is also one of the biggest employers with estimated employment of 50,000 people directly and many more indirectly through the ancillary units.

The industry has sought a policy to enable phased manufacturing of TVs and end-to-end manufacturing of televisions in the country.

Proposed TDS levy on e-commerce transactions may impact working capital of businesses: Amit Agarwal

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The proposed levy of 1 per cent TDS on e-commerce transactions announced in the recent Budget may seem like a harmless 'papercut' but could impact working capital of small businesses, Amit Agarwal, country head of Amazon India and Chairman of industry body IAMAI said on Wednesday.

Agarwal said the focus for India should be on "removing friction and bottlenecks" and added that the target of USD 1 trillion digital economy is not far fetched for a country that is seen as a digital powerhouse.

"Just look at the most recent Budget. There is an introduction of tax collection at source. These seem like harmless papercuts but really impact the working capital of small businesses," Agarwal said.

A lot can be achieved by focusing on removing friction, he said expressing hope that there will be more attention in enabling this space for successful entrepreneurs.

Agarwal was speaking at 14th India Digital Summit organised by Internet and Mobile Association of India (IAMAI).

Agarwal further advocated a razor sharp focus on skilling, grassroot entrepreneurship, driving equal opportunity through greater women's participation as well as Artificial Intelligence backed solutions, and said a multi pronged approach can enable India to meet its target of USD 5 trillion economy.

He exuded confidence that bold reforms of last few years and India's rising tech clout globally backed by success of Aadhaar, UPI and other initiatives will help the country scale new highs.

The Union Budget announced on February 1 has proposed a new levy of 1 per cent TDS (tax deducted at source) on e-commerce transactions, a move that could increase burden on sellers on such platforms.

"In order to widen and deepen the tax net by bringing participants of e-commerce (sellers) within tax net, it is proposed to insert a new section 194-O in the Act so as to provide for a new levy of TDS at the rate of one per cent," according to Budget 2020-21 documents.

The amendments will take effect from April 1, 2020. The documents said the e-commerce operator -- an entity owning, operating or managing the digital platform -- will have to deduct 1 per cent TDS on the gross amount of sales or service or both.

This provision will not apply in cases where the seller's gross amount of sales during the previous year through e-commerce operator is less than Rs 5 lakh and the seller has furnished his PAN or Aadhaar number.

Budget 2020 | Removal of exemptions in new tex regime to impact life insurers, MFs

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Removal of tax exemptions under Section 80C in the new tax regime could be dampener for life insurance products as well as equity-linked savings schemes (ELSS) of mutual funds.

In her Budget speech on February 1, Finance Minister Nirmala Sitharaman said a salaried professional opting for a lower tax rate under the new regime will not be eligible for deductions, including insurance premium paid and ELSS investments.

“The removal of 80C benefit may pose a risk to new business volumes of life insurance companies,” said Kotak Institutional Equities in a report.

Life insurance

Tax exemptions are an important incentive for purchase of life insurance. To be eligible for exemption under Section 80C, the sum assured has to be 10 times the annual premium. This is part of the Rs 1.5 lakh limit under this section.

But now, those who opt for the new tax regime will not be eligible to claim any deduction under Section 80C.

It is likely that those earning annual income between Rs 5 lakh to 7.5 lakh could switch to the new regime and hence will not have any incentive to buy an insurance product.

Though tax saving is not the only objective to buy life insurance, it is one of the motivators. Life insurers are hopeful that fewer people opt for the new regime.

Kamlesh Rao, CEO Aditya Birla Sun Life Insurance, said the insurance industry will be watchful of the implication of direct tax changes in the new tax regime.

As soon as the new regime was announced on February 1, life insurers' stocks were hit. Currently, HDFC Life Insurance, ICICI Prudential Life Insurance and SBI Life are listed on the stock market.

Shares of Max Financial, which holds Max Life, gained 8.65 percent intraday today (against a 12.8 percent fall on Budget day), ICICI Prudential rose 1.69 percent (against a correction of 10.93 percent), HDFC Life gained 1.80 percent (against a fall of 6 percent) and SBI Life was up 3.12 percent (against a decline of 10 percent).

The high reliance on the fourth quarter for premium collection by life insurers has however come down. Since Q4 is when individuals buy life insurance to claim deductions, a major portion of the new premiums would come in the January to March period.

Economic Survey 2020 says India has been a dominant economic power ‘by design’

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The Economic Survey 2020 stated that India had been the dominant economic power for over three-fourths of known economic history. Such economic strength is created "by design" rather than by chance, the report said.

Source: Economic Survey 2019-20

The survey also drew the connection between the invisible hand of the market, the hand of the trust and how it can contribute to India's target of becoming a $5-trillion economy.

"In a market economy too, there is need for state to ensure a moral hand to support the invisible hand," the survey emphasised.

The survey traced the country's history, right from the ancient texts such as Arthashastra and Thirukural to contemporary times and the problem of bad loans.

Pro-business practices can help promote the invisible hand of the market, the report added.

The survey introduced the concept of “trust as a public good that gets enhanced with greater use”.

The Survey suggests that policies must empower transparency and effective enforcement using data and technology to enhance this public good.

The global financial crisis in 2009 and its consequences created a trust deficit in the economy. Economics literature after the financial crisis has emphasised the need to rebuild the trust in the economy.

"Following the Global Financial Crisis, an emerging branch of the economics literature now recognises the need for the hand of trust to complement the invisible hand," the report said.

Cargo traffic at non-major ports grew 4.8% to 447.21 MT in April-December

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Cargo traffic at India's non-major ports jumped 4.8 per cent in April-December period of the current fiscal to 447.21 million tonnes (MT), a Shipping Ministry report has said. These non-major ports had recorded a cargo traffic of 426.53 MT in the April-December period of 2018-19.

During the April-December 2019-20, Directorate of Ports at Odisha recorded highest growth in traffic at 64.2 per cent followed by Ports of Tamil Nadu Maritime Board (34.1 per cent), Directorate of Ports, Puducherry, 27.7 per cent) and Ports Management Board, Andaman & Nicobar Islands (25.4 per cent) against the corresponding period of the previous fiscal, as per the report.

Directorate of Ports, Karnataka, recorded a growth of 25 per cent while Gujarat Maritime Board recorded a growth of 4.1 per cent.

Negative growth was seen at Goa, Kerala Maritime Board, Maharashtra Maritime Board and Directorate of Ports, Andhra Pradesh (2.1 per cent).

Cargo traffic at India's non-major ports jumped 4.8 per cent in April-December period of the current fiscal to 447.21 million tonnes (MT), a Shipping Ministry report has said. These non-major ports had recorded a cargo traffic of 426.53 MT in the April-December period of 2018-19.

During the April-December 2019-20, Directorate of Ports at Odisha recorded highest growth in traffic at 64.2 per cent followed by Ports of Tamil Nadu Maritime Board (34.1 per cent), Directorate of Ports, Puducherry, 27.7 per cent) and Ports Management Board, Andaman & Nicobar Islands (25.4 per cent) against the corresponding period of the previous fiscal, as per the report.

Directorate of Ports, Karnataka, recorded a growth of 25 per cent while Gujarat Maritime Board recorded a growth of 4.1 per cent.

Negative growth was seen at Goa, Kerala Maritime Board, Maharashtra Maritime Board and Directorate of Ports, Andhra Pradesh (2.1 per cent).

India begins dumping probe into chemical imported from China

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India has initiated a probe into an alleged dumping of a chemical used in dyes and pharma industries from China following a complaint from a domestic player.

Gujarat Narmada Valley Fertilizers and Chemicals Ltd has filed an application before the Directorate General of Trade Remedies (DGTR) for anti-dumping investigation on imports of Aniline originating in or exported from China.

According to a notification of the DGTR, it has found evidence of dumping of the chemical from China.

"The authority, hereby, initiates an investigation to determine the existence, degree and effect of any alleged dumping in respect of the product under consideration," it has said.

If established that dumping has caused material injury to domestic players, the directorate would recommend imposition of anti-dumping duty on imports of the chemical from the neighbouring country.

Aniline is also known as Aniline Oil. It is an essential for vital industries such as drugs, pharmaceuticals, dyes and dye intermediates.

Imposition of anti-dumping duty is permissible under the World Trade Organisation (WTO) regime.

The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a- vis foreign producers and exporters.

India desperately needs investment: Jyotiraditya Scindia on Piyush Goyal's remarks

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Senior Congress leader Jyotiraditya Scindia termed as "unfortunate" Union minister Piyush Goyal's 'Amazon not doing any favour' remarks, and said such statements would do no good to the country as it desperately needs investments to come out of the "worrisome" economic condition.

He also said that there was a need to attract foreign investment as Indian businessmen's capacity to invest has exhausted.

"An investor as well as the country where the money is invested, both get profited...I think any comment that brings down the investment is not appropriate. It is unfortunate for us," Scindia told reporters here.

"The country desperately needs investment. Countries across the globe give a red carpet reception to investors, but in our country if such a statement is made, then it won't encourage investment," he said in response to a query about Union Commerce Minister Piyush Goyal's statement regarding Amazon's investment into India.

"Indian businessmen's capacity to invest has exhausted. So there is a need to attract investment...Such statements won't do any good to the nation," the Congress general secretary added.

He also called for all-out efforts to accelerate the country's growth rate, to attract investment, to check inflation and to end unemployment.

"The country's condition is worrisome on these four counts right now. It seems this kind of situation did not exist in the last 25-30 years," Scindia, who was Minister of State for Commerce and Industry during the UPA-II, added.

Piyush Goyal had on Thursday said that e-commerce giant Amazon was not doing a favour to the country by investing a billion dollars and also questioned how the online retailing major could incur such "big" losses but for its predatory pricing.

He had also said that e-commerce companies have to follow Indian rules in letter and spirit and not find loopholes to make a back-door entry into multi-brand retail segment.

However, a day later, the minister had said in Ahmedabad that the country welcomes all kinds of investments that follow the "letter and spirit" of the law. He also said that some people had misconstrued his remarks by suggesting that he had said something negative about Amazon.

Petrol, diesel prices cut by around 15 paise on Jan 16

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Petrol and diesel prices across all major cities in India were cut by 15 paise and 14 paise respectively on January 16. This came after no change in fuel prices was seen on January 15.

In Delhi, petrol costs Rs 75.55 a litre while diesel is being sold at Rs 68.92 a litre. Meanwhile in Mumbai, Chennai and Kolkata, petrol is pegged at Rs 81.14, Rs 78.49 and Rs 78.23 a litre today. Diesel in these three cities after the price cut today is at Rs 72.27, Rs 72.83 and Rs 71.29 a litre.

On January 13, the fuel prices across major Indian cities saw a drop for the second day in a row, with petrol and diesel prices being slashed by 10 paise and 5 paise respectively.

The relief comes after crude oil prices saw a drop following a further easing of the US-Iran conflict threat.

Earlier this month, the price of crude oil spiked over rising tension in the Middle East and the resultant geopolitical uncertainties.

However, Iran signalled on January 12 that it favoured de-escalation, following nearly 10 days of tension between the countries, which came after an Iranian military general was killed in an airstrike by the US.

Relief for customers as petrol, diesel prices drop for second day in a row

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Customers across major metros in India saw some respite as petrol and diesel prices fell by 10 paise and five paise, respectively, on January 13. This was the second consecutive day when fuel prices saw a drop on the back of slight easing of tensions between the United States and Iran.

Prices of petrol and diesel stood at Rs 75.80 and Rs 69.06 a litre, respectively, in Delhi. In Mumbai, the same stood at Rs 81.39 and Rs 72.42, respectively.

In Kolkata and Chennai, petrol prices fell to Rs 78.39 and Rs 78.76 a litre, respectively. Diesel prices in the two cities reduced to Rs 71.43 and Rs 72.98 a litre, respectively.

Crude oil prices saw a spike earlier this month as a result of rising tension in the Middle East, heightened geopolitical uncertainties and the recent decision to reduce oil production made by OPEC nations and their allies.

However, Iran on January 12 signalled that it favours de-escalation, following nearly 10 days of tension between the countries, which came after an Iranian military general was killed in an airstrike by the US.

Indian power ministry seeks more time for coal-fired plants to install emission cutting equipment

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India's federal power ministry has proposed a new deadline for coal-fired power plants around New Delhi to install emission cutting equipment, a government official said on Friday.

The ministry has said that the power plants - 10 out of 11 of which missed a December 2019 deadline - be given deadlines starting July 2020 and ending December 2021 to install the equipment, the government official, who did not want to be named, told Reuters.

The environment ministry will take the final call on the power ministry's proposal.

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