World
Indian passenger carriers cancel flights to Dubai
Some of the major Indian passenger carriers on Thursday cancelled their scheduled operations to Dubai due to the unavailability of runway at the Dubai International Airport.
 
The announcements by the Indian carriers came a day after an Emirates flight from Thiruvananthapuram to Dubai caught fire after it crash-landed at Dubai airport.
 
"Dubai airport has announced limited operations up to August 5, 2016. As a result, for August 4, 2016, Jet Airways has cancelled four flights from India to Dubai along with their corresponding return flights," a Jet Airways spokesperson said in a statement.
 
"In addition, Jet Airways will re-route two Dubai-bound flights to Sharjah and is awaiting slot approval from Sharjah Airport to re-route four additional flights." 
 
Budget passenger carrier SpiceJet, too, cancelled all its flights to Dubai which were to be operated on Thursday.
 
"In the wake of the Emirates aircraft crash-landing at Dubai airport yesterday and in accordance with the instructions from the Dubai Airport Authorities, all our flights to and from Dubai scheduled for today have been cancelled," SpiceJet said in a statement.
 
"Post the runway closure at Dubai airport yesterday, our yesterday's flights to the city had been diverted to Al Maktoum International Airport, Ras Al Khaimah International Airport and Sharjah International Airport."
 
The budget carrier further said that it had arranged alternate mode of travel for passengers of the diverted flights to reach Dubai city. 
 
Another low cost carrier (LCC) IndiGo also cancelled its flights to Dubai for August 4, due to the unavailability of runway at the Dubai airport. 
 
"From August 05 till 0730 IST August 07 - limited flights will be allowed to operate from Dubai airport," IndiGo said in a statement.
 
The airline said that it has already notified passengers about their respective flight status through various channels.
 
On Wednesday, Emirates flight EK521, ferrying 282 passengers and 18 crew, caught fire when it crash-landed at Dubai International Airport.
 
All passengers and crew were evacuated safely. After the incident, Dubai International Airport was closed for about six hours.
 
"Emirates cancelled 27 flights yesterday, and there were delays and rescheduled flights across the network," an Emirates spokesperson said.
 
"(In all) 23 flights were diverted to alternative airports -- Sharjah, Al Maktoum International (DWC), Fujairah, Al Ain, Muscat and Bahrain. In total, over 23,000 Emirates passengers were impacted by the disruption."
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  

 

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Nifty, Sensex may rise a bit – Thursday closing report
We had mentioned in Wednesday’s closing report that Nifty, Sensex may move in a narrow range. The major indices of the Indian stock markets were range-bound on Thursday and closed with namesake small gains over Wednesday’s close. The trends of the major indices in the course of Thursday’s trading are given in the table below:
 
 
Profit booking, along with negative Asian indices and a weak rupee, subdued the Indian equity markets on Thursday. However, a fresh bout of buying support and short covering during the last hour of the day's trade saw the key indices closing on a flat-to-positive note. The BSE market breadth was tilted in favour of the bulls during the second half of the session, closing with 1,444 advances and 1,258 declines. On the NSE, on Thursday, there were 764 advances, 677 declines and 59 unchanged.
 
Bata India has changed its strategy of opening over 100 stores a year and would start concentrating on same store growth, a said Chairman Uday Khanna on Thursday. It also plans to set up online kiosks in some major retail stores across the country. The shoe maker added 26 new retail stores during the last financial year, Khanna told shareholders at the company's 83rd annual general meeting. The company continues to penetrate into tier 2 and tier 3 cities in India and other rural markets, he said. The footwear maker has been investing to strengthen its digital multi-channel business division along with logistics division with due importance for delivery of footwear and accessories, its latest annual report said. In 2015-16, online sales reached Rs40 crore. The company reported standalone net profit of Rs50.49 crore for the first quarter ended June 30 as compared to Rs50.18 crore in the same period last year. The company’s shares closed at Rs528.65, down 4.44% on the BSE.
 
The Central Board of Direct Taxes (CBDT) has entered into an advance pricing agreement (APA) with an Indian subsidiary of a Japanese trading company to foster a non-adversarial tax regime. "Signing of this bilateral APA is an important step towards ascertaining certainty in transfer pricing matters of multinational company cases and dispute resolution," said a statement issued here by the Finance Ministry under which the CBDT functions. The agreement was signed on August 2. The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance. "The progress of the APA Scheme strengthens the government's mission of fostering a non-adversarial tax regime," the statement said. Overall, it is fourth bilateral APA signed by the CBDT. The APA scheme was introduced in the Income-tax Act in 2012. The CBDT expects more APAs to be signed in the near future, it said. The agreement is likely to be favourable for FDI (Foreign Direct Investment) in India.
 
As India took a big leap towards a unified Goods and Services Tax (GST) regime across the country, with the upper house of parliament passing the relevant Constitution amendment bill on Wednesday, industry biggies and major think tanks said this transformational change is a win-win situation and hoped it will be implemented soon. Marie Diron, Senior Vice President, Sovereign Risk Group, Moody's Investors Service said, “The short-term credit implications of GST for the sovereign will be limited. In the medium term, GST is likely to have a positive impact on the economy and government revenues. We assume that GST will have no significant impact on inflation, in line with the revenue-neutral framework.” This development is likely to be favourable for both FDI and FII (foreign institutional investors) to invest in India.
 
The central government has decided to import another 30,000 tonnes of pulses for the buffer stock, official sources said on Thursday. The Price Stabilization Fund chaired by Consumer Affairs Secretary Hem Pande at a meeting here on Wednesday decided that fresh imports will include 20,000 tonnes of Tur dal and 10,000 tonnes of Urad. The government agencies have also procured about 1.19 million tonnes of pulses from the domestic market, official sources said. "The department of Consumer Affairs has requested state governments repeatedly to lift the pulses Tur and Urad from the buffer stock for distribution at not more than Rs 120/kg. Tur is being provided to the state at the rate of Rs67/kg and Urad at Rs 82/kg," a source said. Over 29,000 tonnes of pulses were allocated to the states as on August 1, 2016 but only three states have lifted some quantities against their allotments. Prices of pulses continue to be high despite a series of efforts from the government to put things under check. With agricultural imports drawing upon foreign exchange reserves of the country, inflation and stability of the rupee are likely to come under government control and the stock markets are likely to be subdued to that extent.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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One nation + one tax = $ 137 billion For GST
About 42 per cent of the Rs 22 lakh crore ($328 billion) revenue of the central government and 35 states and union territories will now be subsumed under the goods and services tax (GST), passed by parliament's upper house on August 3, 2016 and being touted by some as one of independent India's “boldest reforms”.
 
Around Rs 9.20 lakh crore ($137 billion) of Central and state revenue from 15 taxes --from Central Excise to levies on gambling -- in 2014-15 ($1 = Rs 67) will be brought under the GST, scheduled to be levied from April 1, 2017, although the government might be hard-pressed to make this deadline.
 
Industries and commercial enterprises currently pay various taxes at various stages of a product or service, such as manufacture, transport, wholesale, logistics and retail. The administration of these taxes is often tangled in paperwork, results in slow inter-state movement of products and increases costs for consumers. 
 
Most of these taxes will be subsumed by the GST, barring a few, such as those on vehicles, roads, property and electricity.
 
The law enabling the GST must now go back to the the Lok Sabha, which must clear the new amendments brought in by the government to get political consensus, after which it must be ratified by half of all state legislatures.
 
Simultaneously, the information technology backbone that the GST will require is getting ready, with software testing set for October 2016, the Economic Times reported on August 3, 2016.
 
Hard to implement, but basic design is ready
 
It isn't yet clear what the GST taxation rate will be, but 17 per cent to 18 per cent is likely. Implementing the GST will not be easy because many taxes and their administration must be disentangled and brought online into a single, nationwide system. However, the basic architecture of such a system has been created.
 
As that nationwide system is constructed and brought online, tax administrators will also have to be retrained.
 
“For effective implementation of GST, tax administration staff -- both at the Central and state levels -- would require to be trained properly in terms of concept, legislation and procedure,” Karthik S and Satish Dedhia, tax experts at the PriceWaterhouseCoopers consultancy, wrote in Forbes India in February 2016. “The tax administration staff would also need to change their mindset, approach and attitude towards the tax payers. And for this, they would have to 'learn, unlearn, and relearn' the GST not only in letter but in spirit too.”
 
A GST Council will control the new tax regime across the Centre and the states; it will fix tax rates, exemptions and other issues. The Centre's representatives will control a third of the vote in the council.
 
Two Central representatives (Finance Minister and Minister of State for Finance) account for 33.3 per cent of the vote, while 29 finance ministers account for the remaining 66.7 per cent, according to the 122nd Constitutional Amendment Bill that will give effect to the GST regime.
 
Balancing act ahead, but calculations for UP, Maharashtra show it can work
 
The key challenge for the central government is to ensure both the Centre and the states benefit from the GST -- in other words, get as much as or more money than they currently do.
 
The Centre is likely to compensate states for lost revenue on ‘goods' by increasing their share of taxes on services, according to an analysis by the Institution of Chartered Accountants of India (ICAI).
 
Indian states cannot afford to lose revenue because they are already in debt, as IndiaSpend reported.
 
Maharashtra, India's most industrialised state, and Uttar Pradesh (UP), the most populous, expect to get at least Rs 60,000 crore and Rs 65,000 crore per year, as IndiaSpend‘s calculations revealed in December 2015. We found that these figures, based on data from the Reserve Bank of India's Study of State Finances, are almost equal to the revenue Maharashtra and UP currently receive through a host of taxes, which the GST will replace.
 
We chose Maharashtra for the analysis because it is the state with highest revenue from its own taxes, as a share of total revenue, at 66 per cent; and UP because it has the highest total revenue but no more than 36 per cent from its own taxes.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Nitin K Parekh

4 months ago

GST as a system is alright, but how the bureaucracy drafts the law, the checks and balances, the burden the trade and industry will have to bear to comply with the complicated returns planned will decide its success. The past experience proves that the babus never make any thing simple, lest it may reduce their importance in the scheme of taxation.

Then there is apprehension, even among the bureaucracy, on the division of power between the Central and State staff will be effected. After all it involves huge amount of revenue - both to the government and other unscrupulous elements.

Considering the one decade old VAT experience across the nation, it is highly objectionable to proclaim that GST will help reduce prices. It's utterly a wrong premise to endorse GST; no gain in raising the expectations of the general public. Experience the world over is overwhelmingly points to initial one to two years of inflation. Unless the political takes a strong stand, there is a distinct possibility for the GST legislation to play havoc with compliance.

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