The Aluminium Association of India (AAI) has pushed for speedy implementation of the RoDTEP Scheme (Remission of Duties or Taxes on Export Products) for the Indian Aluminium industry on priority to survive these challenging times.
In a letter to senior officials of ministries of Commerce & Industry and Finance & Corporate Affairs, AAI expressed the urgent need for at least 5% remission rate for the Aluminum Sector under RoDTEP Scheme to ensure its global competitiveness. The AAI also requested a separate budget allocation for the aluminium industry, being a strategic sector, to realize the immense potential to double Aluminium exports over the next 2-3 years.
Highlighting the urgency of the matter, the AAI said, the Government needs to notify the actual remission rates as per actual sectoral data submitted to the RoDTEP Committee. The inordinate delay in notifying the sector-wise remission rates is creating a precarious situation and a high level of uncertainty for the Indian exporters. It is adversely impacting exports due to ambiguity w.r.t. pricing of exports goods and absence of any clarity on the mechanism of duty remission/ drawback rates for exports. The situation for exporters further aggravates with the withdrawal of MEIS, as to date the exporters are unable to avail the MEIS benefit for exports already made during FY- 20 and FY- 21 (Apr-Dec) due to the blocking of the online MEIS module for applying claims.
The Commerce Ministry / DGFT are yet to notify the rates due to Government’s current situation pertaining to budgetary constraints. Union Budget 2021-22 has allocated only Rs 13,000 Cr for RoDTEP Scheme against Rs 50,000 Cr announced by Hon’ble Finance Minister in Sept, 2019. This allocation is just one-third of the Rs 39,097Cr allocated in FY-20 for MEIS (Merchandise Exports from India Scheme).
Supporting the rates calculated by RoDTEP by an extensive exercise conducted through detailed discussions, due diligence and analysis done for various sectors, AAI said that implementation of its rates will give flexibility in increasing the rate in the future based on budget allocation to increase exports without any objection from WTO.
Throwing light upon the current dilemma of the Indian Aluminium industry, it further highlights the plight of the Indian Aluminium exports struggling to retain competitiveness in international markets as compared to the major exporting countries, specially China, which extends various support measures for export competitiveness. In India, the high incidence of numerous unrebated Central & State taxes/ duties impedes the growth potential of Aluminium sector in India. The various taxes constitute ~15% of Aluminium production cost which is amongst highest in the world. This adversely impacts the sustainability & competitiveness of Aluminium industry and further renders Indian exporters vulnerable and uncompetitive vis-à-vis global players in international markets. These duties and taxes should not be exported as such and should be remitted back to the domestic producers to encourage domestic value addition and export of finished products.
Under MEIS, the Aluminium exports were eligible for a 2% reward rate which itself didn’t provide ample cushion to remain competitive against the current bearish market condition. Government support is extremely crucial at this juncture to reduce the burden of high taxes/ levies with an adequate remission rate of at least 5% under RoDTEP to boost exports and survive this challenging phase.
Recognized as one of the 12 champion sectors, India has the 2nd largest Aluminium production capacity (4.1 million tons/ annum) and is the 3rd largest Aluminium producer. Huge investments of Rs 1.2 Lakh crore ($20 billion) have been made to enhance domestic production capacity to cater to domestic demand as well as enhance exports of high quality finished Aluminium products. The industry has generated more than 8 lakh jobs and developed over 4000 SMEs in the downstream sector. Aluminium exports alone contributed $5 billion to India’s Forex earning in FY-21, i.e. ~2% of India’s export basket and have massive potential to double the exports to the tune of $10 billion Forex earning in future.
India’s forex reserves rise by over $3 bn
India’s foreign exchange reserves rose by $3.074 billion during the week ended June 11.
According to the Reserve Bank of India’s (RBI) weekly statistical supplement, the reserves increased to $608.081 billion from $605.008 billion reported for the week ended June 4.
India’s forex reserves comprise foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs), and the country’s reserve position with the International Monetary Fund (IMF).
On a weekly basis, FCAs, the largest component of the forex reserves, edged higher by $2.567 billion to $563.457 billion.
Similarly, the value of the country’s gold reserves rose by $496 million to $38.101 billion.
However, the SDR value slipped by $1 million at $1.512 billion.
But, the country’s reserve position with the IMF inched higher by $11 million to $5.011 billion.
BharatPe in talks to raise $250M led by Tiger Capital: Report
Fintech major BharatPe, that hit a new high with 106 million monthly transactions in UPI in March this year, is reportedly raising nearly $250 million in its next funding round led by Tiger Global.
TechCrunch on Friday reported, citing sources, that the fresh funding will take the company’s valuation to about $2.5 billion.
When reached, the company declined to comment at the moment.
The financial services company last month raised Rs 50 crore in debt from Northern Arc Capital, one of the leading digital debt finance platforms. This was the sixth round of debt financing in 2021.
In January, the company had raised Rs 200 crore from three top debt companies in the country — Alteria Capital, InnoVen Capital and Trifecta Capital, having later raised additional capital from ICICI Bank and Axis Bank.
“We have considerably ramped up our lending business in the last year and have set an ambitious target of facilitating disbursals to the tune of $1 billion to more than 10 lakh merchants by the end of current fiscal (FY22),” Suhail Sameer, Group President, BharatPe, had said.
The fintech company has already facilitated disbursals of over Rs 1,600 crore to more than 2 lakh merchants since the launch of the lending vertical.
As per a recent report by ACI Worldwide and Global Data, India has outpaced the US and China to become the world’s biggest real-time digital payments market, driven by P2P as well as merchant payments.
BharatPe said it is committed to help small merchants and kirana store owners grow their business with a range of fintech products for them.
Finance Ministry refutes reports of alleged black money held by Indians in Switzerland
The Union Finance Ministry on Saturday said that increase in deposits of Indians in Swiss Banks could be on account of increase in business of Swiss bank branches located in India and raised Inter-bank transactions, rather than due to an increase in alleged black money held by Indians in Switzerland.
It, however said that Swiss Authorities have been requested to provide the relevant facts along with their view on possible reasons for increase or decrease in deposits so that facts could be presented in correct perspective.
Certain reports suggested that that funds of Indians in Swiss Banks have risen to over Rs 20,700 crore (CHF 2.55 billion) at the end of 2020 from Rs 6,625 crore (CHF 899 million) at the end of 2019, reversing a 2 year declining trend. It has also been stated that this is also the highest figure of deposits in the last 13 years.
“Reports allude to the fact that the figures reported are official figures reported by banks to Swiss National Bank (SNB) and do not indicate the quantum of much debated alleged black money held by Indians in Switzerland. Further, these statistics do not include the money that Indians, NRIs or others might have in Swiss banks in the names of third-country entities,” the Ministry statement said.
The statement added that the customer deposits have actually fallen from the end of 2019 in a Swiss Banks. The funds held through fiduciaries has also more than halved from end of 2019. The biggest increase is in “Other amounts due from customers”. These are in form of bonds, securities and various other financial instruments, the finance min statement said.
The ministry also ascribed various other reasons for increase in deposits and not possibly on account of the increase of deposits in the Swiss banks out of undeclared incomes of Indian residents. It said that that increase in deposits may be on account if increase in deposits owing to the business of Swiss Bank branches located in India or Increase in Inter- bank transactions between Swiss and Indian Banks. Also, it could be due to capital increase for a subsidiary of a Swiss Company in India or increase in the liabilities connected with the outstanding derivative financial instruments.
The government has issued clarifications in wake of widely held position that it has curbed generation of black money in the economy or unaccounted funds of Indians stashed abroad. The fresh tax agreements reached between India and certain perceived tax havens has introduced certain instruments to prevent round tripping of funds and generation of black money.
It is pertinent to point out that India and Switzerland are signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC) and both countries have also signed the Multilateral Competent Authority Agreement (MCAA) pursuant to which, the Automatic Exchange of Information (AEOI) is activated between the two countries for sharing of financial account information annually for calendar year 2018 onwards.
Exchanges of Financial Account information in respect of residents of each country have taken place between both countries in 2019 as well as 2020. In view of the existing legal arrangement for exchange of information of financial accounts (which has a significant deterrent effect on tax evasion through undisclosed assets abroad), there does not appear to be any significant possibility of the increase of deposits in the Swiss banks which is out of undeclared incomes of Indian residents, the finance ministry said.
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