Oct. 31 – India’s Ministry of Finance (Department of Revenues) issued a circular stating that the rate of exchange for conversion of each of the foreign currencies listed in the tables below. Both Schedule I and Schedule II annexed hereto into Indian currency or vice versa shall, with effect from November 1, 2011 be the rate mentioned against it in the corresponding entry, for the purpose of the said section, relating to imported and exported goods. Continue reading
Oct. 25 – India’s Foreign Trade Policy (2009-14) announced by the Union Minister of Textiles, provides various incentives for the country’s textiles sector. The sector has been stumbling lately under financial uncertainty at the global level as well as pulls and pressures at the domestic level.
“A multi-pronged strategy has been adopted by providing a stable policy regime, adopting a conscious market diversification plan and providing additional support to sectors hit badly by the global recession. The Ministry also encouraged technological up-gradation of export sectors, and undertook a simplification of procedures to reduce transaction costs and decided to consolidate India’s traditionally strong sectors of the economy while focusing on sunrise sectors as well,” according to the Ministry of Textiles (MoT). Continue reading
Posted in Economy and Politics, FDI and Foreign Trade, Featured, Markets
Tagged European Union, Focus Product Scheme, India Foreign Trade, India Incentives, India Tax, India Textiles, Niryat Bandhu, United States
Oct. 24 – In this new issue of India Briefing Magazine – titled India’s Goods & Service Tax and Retail Sector – we focus on two dramatic, ongoing initiatives by the Indian government to fuel economic activity in the country: the introduction of a dual goods and service tax and further opening in the retail sector.
India’s existing indirect tax structure is being restructured with a synchronized tax system and uniform levy, continuing national tax structure reform to encourage entrepreneurial initiatives and economic activity in India. A dual – Central and State level – Goods and Service Tax (GST) is planned to replace most of India’s current indirect taxes. A country-wide GST is anticipated to be realized by 2012-13.
Additionally, the Indian government is currently discussing the removal of the 51 percent cap on FDI into single-brand retail outlets and allowing some degree of FDI in multi-brand retailing, which has so far been prohibited in India. Recent protests and boycotts of modern retailers in India indicate that the forays foreign retailers have made into India’s retail sector are not welcomed by all. Continue reading
Posted in FDI and Foreign Trade, Featured, Finance, Tax and Accounting
Tagged India Briefing Publications, India China Comparison, India Goods and Service Tax, India GST, India Multi-brand Retail, India Retail, India Single-brand Retail, India Tax
Oct. 21 – Organizations aspiring to move around to international auditing norms, the International Financial Reporting Standard (IFRS) may be spared from preserving two books of accounts — one under the Companies Act and the other for taxation purposes – if a Finance Ministry proposal gets implemented. The application, which was drafted in a discussion paper on Tax Accounting Standards issued by the government, aims at reducing the compliance burden on businesses.
It would be arduous for tax payers to preserve two sets of account books i.e. first in accordance with the Accounting Standards issued by the ICAI/notified under the Companies Act, 1956, and another in accordance with the Accounting Standards notified under the (Income Tax) Act. Continue reading
Oct. 20 – Users of online payment web site PayPal in India can now accept up to US$3,000 per export-related transaction in their accounts, with the RBI raising this limit from US$500 per transaction earlier.
The payment has to be withdrawn within seven days irrespective of the currency risk. Also, RBI has barred purchases abroad with PayPal balance. This causes losses to the buyers as it adds to exchange conversion losses, tax and other charges. Users also feel that PayPal exchange rates are far below the current rates. Continue reading
Oct. 19 – The government of India announced a Rs. 900-crore package for exporters to assist them to fight with the slowdown in developed markets and rising input costs. The Reserve Bank of India has already declared an interest subsidy of 2 percent on rupee export credit for handicrafts, handlooms, carpets and small and medium exporters. Along with the interest financial support, the total relief package for exporters stands at nearly Rs. 1,700 crore. Continue reading
Posted in FDI and Foreign Trade, Finance, Tax and Accounting, Legal and Regulatory
Tagged Commerce Ministry, Foreign Direct Investment, India Exports, India FDI, India Incentives, India Regulations, India Regulatory, India Tax
Oct. 18 – Pakistan has decided to grant Most Favored Nation (MFN) status to India. The discussion process with India had been initiated after a gap of two years. According to the Pakistan government, the foremost priority of the country is to ensure uninterrupted dialogue with India so that the resolution of Kashmir can be ensured.
The MFN status could be a big step forward in increasing trade ties between the two countries. Once MFN status is granted, Pakistan will have to treat India on par with its other favored trading partners. India has already granted most favored nation status to Pakistan and is treating it on par with other trading partners. Continue reading
Oct. 14 – The government of India has permitted a policy to facilitate profit-making state-run firms to obtain assets overseas. The new policy also seeks to augment the power of Maharatna and Navratna companies and provide greater autonomy for acquiring raw material assets abroad.
The government will also mull over setting up a dedicated Sovereign Wealth Fund to obtain assets overseas. The guidelines for acquisition of raw material assets abroad by public sector enterprises is likely to appreciably improve the capabilities of such entities to acquire such assets and protect the country’s long term economic interests. Continue reading