Govt allows 10,000 tonnes sugar export to EU

The relaxation has been given by the Directorate General of Foreign Trade and the exports will be undertaken by trading firm Indian Sugar Exim Corporation during 2009-10 season ending September

With production outlook improving and prices stabilising, the government has allowed export of 10,000 tonnes of refined sugar to the European Union (EU) despite restrictions, reports PTI.

The relaxation has been given by the Directorate General of Foreign Trade (DGFT) and the exports will be undertaken by trading firm Indian Sugar Exim Corporation during 2009-10 season ending September.

In February, the government was forced to withdraw its decision to permit exports to EU due to strong objection from the opposition parties as sugar was selling at about Rs50 per kg.

Though sugar prices have dropped significantly to Rs32 a kg, the exports to EU would be matched by equivalent quantity of imports from anywhere in the world to ensure that domestic supply is not disturbed.

India enjoys duty-free exports to EU up to a fixed quantity under a 'preferential quota' arrangement. Even though the country had faced shortages, the government wanted to ensure that the EU preference is not taken away if no sugar was despatched.

Although officially there in no ban on export of sugar, the food ministry is not granting release order for exports since January 2009.

India's sugar production is estimated at nearly 19 million tonnes in 2009-10 season against the earlier forecast of 16 million tonnes.

The country has imported over six million tonnes of raw and refined sugar since February last year to meet domestic demand, which stands at 23 million tonnes annually.



Shadi Katyal

7 years ago

When the nation is importing sugar why would it allow such export and price situation is very questionable that nation will meet competitive price.It doesn't look a sound bhusiness. The PSU must be involved and some accountability of such PSU will show the truth.
world has moved away from such PSU but we in India still lieve in colonial and permit raj

DTC changes the game. New Pension Scheme could become the best long-term savings option

The revised Direct Tax Code will give a big edge to retirement products over equity and equity-linked mutual funds, which are slated to be burdened by long-term capital gains tax after a long time

Strong winds of change are set to blow over the financial landscape in India. The government has proposed a new tax bonanza for long-term savings schemes under the new Direct Tax Code (DTC) while bringing long-term gains from equities and equity-linked mutual funds under the tax hammer. This dual move could potentially give a leg-up to savings schemes like the New Pension Scheme (NPS) and Public Provident Fund (PPF) over equities and equity-linked products.

Under the existing system, savings schemes fall under the EET (exempt-exempt-taxed) regime, wherein contributions and accumulations are exempt from tax but withdrawals are taxable at applicable marginal rate of tax. However, the government received numerous representations for doing away with the EET system, as this method of taxation of permitted savings was considered harsh in the absence of a universal social security system as in the US. Earlier, the Pension Fund Regulatory and Development Authority (PFRDA), which administers the NPS, had called upon the finance ministry to bring about a change in the tax structure. It appears now that the government has heeded the call and proposed to bring long-term savings schemes like the NPS under the EEE (exempt-exempt-exempt) regime.

Interestingly, at the same time, the government has sought to levy tax on capital gains arising from sale of investment assets such as equity shares of a listed company or units of an equity-oriented fund, which are held for more than one year. This tax is proposed to be computed after allowing a deduction at a specified percentage of capital gains without any indexation. Currently, gains arising out of transfer of equity instruments are taxed (at 15%) only if sold within a year of investment. Capital gains arising out of investment held for more than a year are not taxed.

These new provisions under DTC are expected to have far-reaching implications on the investment scenario in India. Until now, equities and equity-linked mutual funds were considered good bets from the tax point of view, as there was no incidence of long-term capital gains tax. India was among the very few nations that allowed capital appreciation over a period of one year or more to be tax-free. This may no longer be the case. Could this move bring about an exodus from equity instruments to long-term savings schemes?

Sandeep Vasa, a certified financial planner (CFP) believes people could potentially move away from equity markets. "Even today, people are not very comfortable with equity markets. This move could have an impact on the stock markets as people could move further away from equity and equity-linked mutual funds. They will now probably look more at Section 80C investments. Already, people have invested in products like PPF where they know they are comfortable under the EEE system."

Vivek Rege, CFP, VR Wealth Advisors Pvt Ltd said that there could be a natural preference to retirement products as they would come under the EEE system. "People would now be incentivised to invest in such products for tax savings.

They will definitely be seen in a better light. It is good that the NPS would also be eligible for tax exemption; it should see a pick-up in subscriptions from here on." Speaking about the impact on equity investments, Mr Rege said, "Taxation of long-term capital gains will surely affect equity investors."

Devesh Shah, another CFP, welcomed the move to bring the NPS under the EEE system. "This is a move which was required since a long time. It will give right direction to create a social security system in the country. It will be a very favourable feature for personal savings for retirement."




7 years ago

I heard that as per the new tax code we can’t withdraw the amount accumulated at the end of the term,one will have to buy an annuity. I want to know,Is it true,& also what will be its implication on existing policies.

Daily Market View: A dip before the next move?

As suggested yesterday, the market is taking a breather before the next move which is possibly up

The market accrued marginal gains in trades today. The Sensex ended the day at 17,462, up 50 points (0.3%) and the Nifty closed at 5,233, up 11 points (0.2%). The indices started the day with a sharp rise, taking cues from the global markets. However, they traded in a narrow range, touching an intraday low in the early afternoon session. Recovery from that point was limited, as gains were pared in late trading.

Asian markets were up on a report indicating growth in New York manufacturing, which brought back hopes that a recovery was underway in the US. Key indices in Indonesia, Japan, South Korea, and Singapore were up by 0.71% to 1.81%. Markets in China, Hong Kong and Taiwan were closed for the Dragon Boat Festival holiday.

US markets rallied on Tuesday as the euro gained against the dollar after a number of successful European debt auctions eased investor concerns about the eurozone's solvency crisis. The Dow was up 213.9 points (2.1%) at 10,404.77. The S&P 500 rose 25.6 points (2.3%) at 1,115.23 and the Nasdaq gained 61.9 points (2.7%) at 2,305.8.

Back home, the Reserve Bank of India (RBI) said that rates are not indicative of the high growth in the economy and should be curbed by controlling interest rates. Planning Commission deputy chairman Montek Singh Ahluwalia said that weekly movements in India's inflation will not have any impact on reforms to free fuel prices.

The monsoon is running four to five days behind schedule and has yet to reach half of the country. After an initial halt, the monsoon has reached the rice, cane and oilseed growing south-western region of India. However, it is yet to reach the soybean-growing areas of central India.

The government (after market hours) on Tuesday, 15th June, proposed the imposition of capital gains tax on all stock market transactions by Indians and overseas funds as a part of the proposed changes in tax laws. As per the second draft of the Direct Tax Code (DTC), the securities transaction tax (STT) will stay and rates will be calibrated. In the first draft of the DTC unveiled last year, the government had proposed to scrap the STT. The DTC has proposed taxing gains from investments in the stock market and also equity-linked mutual fund units at the applicable rate of taxation. The DTC has also proposed some taxes on income of foreign funds, treating all incomes from their investments in the stock market in India as capital gains.

Foreign institutional investors were net buyers of Rs590 crore on Tuesday. Domestic institutional investors were net sellers of stocks worth Rs351 crore. 

PBA Infrastructure (up 0.2%) has received a contract from Maharashtra Industrial Development Corporation (MIDC) for construction of a road and allied work at IT Park-II (Phase-I) in the Nagpur Industrial Area. The contract is worth Rs14.33 crore.

International Specialty Products, a US-based chemical supplier, has forged a manufacturing alliance with Vivimed Labs (up 1.1%) for production of UV absorbers. The alliance will allow the two companies to jointly market specific products used in sprays and lotions.

Dynamatic Technologies (up 1.3%) said that deliveries of the first sets of Air Frame Structures for India's largest defence programme, the Sukhoi 30 MKl fighter bomber, have commenced from the company's facility in Nasik. The Air Frame Structures include canards, ventral fins, horizontal stabilisers, slats, vertical fins and air brakes. The assembly transfer from its Bengaluru facility to the new facility, provided by Hindustan Aeronautics at Nasik, will be completed by August 2010, enabling Dynamatic to offer greater production support to HAL.

Essar Oil (closed flat) on 15th June, issued $115 million Foreign Currency Convertible Bonds (FCCBs) due June 2028 to promoter company Essar Energy Holdings Ltd, for part-financing expansion programmes of the company. The FCCBs are convertible into Global Depository Shares (GDS) or equity shares, at the option of the bondholders, at a conversion price of Rs138 per share.


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