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No extension of Jan. 10 deadline, says govt; technical glitches dog online tax filers
A combination of last-minute filers, glitches on the Goods and Services Tax Network portal, and confusion surrounding the final deadline for filing the GSTR-1 form meant that people faced several hurdles in filing their returns for the April to November period.
January 10 was the deadline for filing GSTR-1 forms for the July to September quarter for taxpayers with a turnover up to Rs. 1.5 crore and for the July to November period for taxpayers with a turnover above Rs. 1.5 crore.
Fake notification
Following the circulation of a fake notification on social media claiming that the government had extended the deadline to January 15, the government was forced to issue a clarification that the original deadline stood. “The last date for filing of return in form GSTR-1, for different classes of taxpayers for the relevant periods… remains January 10, 2018,” the Finance Ministry said in a statement. “There has been no further extension of date for filing return in form GSTR-1. Taxpayers may note that there is a fake notification regarding extension of date being circulated on social media.” “What is happening is that since today is the last day for filing GSTR-1 for quite a long period, this is a very crucial date,” said Aditya Singhania, deputy general manager, Taxation at Taxmann, one of the official GST Suvidha Providers. “But at this juncture, with the GSTN portal not functioning properly, with only three or four successful logins out of ten attempts, people are unable to file their returns.”
“In the midst of this, when a fake notification gets circulated in the market, then the tax filers naturally get affected by this,” Mr. Singhania added. “This is creating a big problem.”
The other problem seems to be the systemic issue of tax filers waiting till the last date to file their returns, which overloads the portal. While some said that this was a major problem, others said the portal downtime was not a significant issue. “There have been two broad problems with the GSTN portal,” Archit Gupta, founder and CEO of Cleartax said. “The first is that people are having trouble logging onto the portal, and the second is that the data, once uploaded, is not reflecting on the site.”
“For most of the taxpayers, the clients are sharing their information at the last moment, so consultants are finding it very difficult to file their returns on the last date,” Mr. Singhania added.
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‘Enormous potential backed by reforms, when compared with other economies’
India’s growth rate in 2018 is projected to hit 7.3% and 7.5% in the next two years, according to the World Bank, which said the country has “enormous growth potential” compared to other emerging economies with the implementation of comprehensive reforms. India is estimated to have grown at 6.7% in 2017 despite initial setbacks from demonetisation and the Goods and Services Tax (GST), according to the 2018 Global Economics Prospect released by the World Bank here.
“In all likelihood, India is going to register higher growth rate than other major emerging market economies in the next decade. So, I wouldn’t focus on the short-term numbers. I would look at the big picture for India and big picture is telling us that it has enormous potential,” Ayhan Kose, director, Development Prospects Group at the World Bank, told PTI in an interview.
‘China, slow’
He said in comparison with China, which is slowing, the World Bank is expecting India to gradually accelerate. “The growth numbers of the past three years were very healthy,” said Kose, author of the report. India’s economy is likely to grow 7.3% in 2018 and then accelerate to 7.5% in the next two years, the bank said. China grew at 6.8% in 2017, 0.1% more than that of India, while in 2018, its growth rate is projected at 6.4%. And in the next two years, the country’s growth rate will drop marginally to 6.3 and 6.2%, respectively.
To materialise its potential, India needed to take steps to boost investment prospects, Kose said.
There are measures underway to do in terms of non- performing loans and productivity, he said. “On the productivity side, India has enormous potential with respect to secondary education completion rate. All in all, improved labour market reforms, education and health reforms as well as relaxing investment bottleneck will help improve India’s prospects,” Kose said. India has a favourable demographic profile which is rarely seen in other economies, he said. “In that context, improving female labour force participation rate is going to be important,” he said.
: With an aim to double the export in the next three years, the state has decided to showcase Metiabruz as a hub for ready-made garments at the Bengal Global Business Summit (BGBS) to be held this month. The initiative is a strategic effort to give a boost to this unorganized sector that contributed nearly 28% to 35% to the state export, but is now facing a major slump following demonetisation and implementation of GST. “Bengal is the leader in ready-made garments in the country. Metiabruz contributes to the bulk of these garments supplied across the city . We have made elaborate plans to facilitate traders there so that they can export their products to even foreign countries,” an official of the MSME department said.
According to a source in the finance department, Bengal’s garments export turnover grew to Rs 53,649 crore in 2016-17 against Rs 47,857 crore in 2015-16 and is likely to cross the Rs 1lakh crore mark by 2020-21. “Due to GST and demonetisation three major sectors for export — leather, garments and jewellery — saw a huge setback and we have a fear that it might have an impact on the export market. We are trying to showcase the garments industry so that they can overcome the slump,” the official said. The industry directly and indirectly involves 2 crore people, with a financial involvement of more than Rs 10000 crore. “There are some big players who are mainly into export. Condition is pathetic for small and medium scale traders and manufacturers,” President of West Bengal Garments Manufacturing Association, Samsuddin Mondal, said.
Light industry enterprises of Uzbekistan exported products worth $1.1 billion to 50 nations in 2017 and the share of value-added products exceeded 40 per cent. The number of exporting enterprises rose from 293 in early 2017 to 350 by the year end. The country produces around 1.4 million tonnes of cotton fibre annually, of which about 60 per cent is consumed domestically.
Thirty four investment projects on modernization of existing and creation of new enterprises with a total export potential of $151.7 million were completed in 2017 in the country’s light industry. Their total value exceeded $356 million.
In addition, the growth of export indicators was facilitated by the activity of 64 trading houses which were opened in foreign countries,an Uzbek news agency reported quoting statistics from the Association of Textile and Clothing and Textile Industries Enterprises (Uztekstilprom). Experts have already created a draft concept of development for the medium-term perspective of cotton textile clusters, taking into account the experience of such facilities in the Navoi region.
Around 7,000 industrial enterprises operate in the republic at present. The Uzbek textile industry is mainly focused on cotton, silk and wool.’ Further development of its textile industry is one of the policy priorities of Uzbekistan. The country grows about 3.5 million tonnes of raw cotton and produces 1.1 million tonnes of cotton fibre annually. The country plans to create 112 modern, high-tech industrial factories, expand, modernize and technologically upgrade 20 operating capacities. All this will increase the export potential of the industry up to $2.5 billion a year and create more than 25,000 jobs.
Acting over a tip-off, the agriculture officials of Itikayala mandal in Gadwal district raided Image Crop Limited Company near Vemula village in the mandal and seized 2,094 illegally stocked cotton seeds packets. The officials estimated the cost of the seized cotton seeds at about Rs 17 lakhs. “We have been receiving complaints of illegal stocking of cotton seeds in Itikyala mandal and we have been on it for a long time. After getting reliable information, we raided the godowns of Image Crop Limited and seized illegally stored cotton from their possession,” informed Govind Nayak, the district Agriculture officer. A case was booked against the company management and necessary action will be taken as per the law, he added. Alampur ADA Khadri, Itikyala agriculture officers Ayub and Janardhan along with other staff took part in the raids.
The International Cotton Advisory Committee, Washington, D.C., announced recently it expects global cotton consumption to increase in the coming year. Recovery continues in cotton production for 2017-2018, according to the ICAC, which projects an 11 percent growth to about 25.4 million tons due to increased area put into production. Production in just the United States for the current season is expected to increase 25 percent to 4.7 million tons. India, according to the report, will remain the world’s largest cotton producer, with 2017-2018 production expected to reach 6.2 million tons. China will come in second, with 5.2 million tons of production. Pakistan is predicted to increase 11.5 percent, to 1.9 million tons, while Turkey is predicted to increase its production 18 percent to 829,000 tons. Other major cotton countries are expected to have positive growth attributed to increased production area and harvested yields. Meanwhile, international cotton prices have moved upward over the last few months that the season has been underway, according to the ICAC. “From the season low of 77 cents per pound at the start of season, prices are at a season high at the end of this calendar year up to 88 cents per pound,” the report stated. “The current season average of 80 cents per pound is lower than the 2016/17 average of 83 cents per pound.”
The National Seed Association of India, which represents the majority of the cotton seed companies in the country, has blamed Mahyco Monsanto and Monsanto India for widespread resistance developed by pink bollworm to Bollgard-II, the second-generation genetically modified cotton seed technology.
The association has threatened to stop selling the seeds developed with BG-II technology if the two Monsanto firms do not vouch for the efficacy of the second gene (which gave in to pink bollworm). It asks the firms to own up to the failure and compensate farmers. The association wrote a separate letter to the Agriculture Ministry disowning any responsibility for the efficacy of the trait (the second gene) that was meant to tackle the pink bollworm. “It (the company) collects the trait value from the farmers through us. It is their responsibility,” it said.
Pink bollworm, which showed signs of resistance to technology, turned virulent this kharif, causing extensive damage to cotton crop in several States. The incidence was so high that the Telangana government asked farmers to remove the plants after the second pick (of cotton bolls) so that the fields would be free of pink bollworm for the next season. “You went on to promote the usage of hybrids with the two gene trait (Bollgard-II) even after CICR confirmed incidence of resistance,” Kalyan B Goswami, Director-General of NSAI, said in the letter. NSAI members wanted to go back to the single gene (Cry1Ac) GM seed (which entails no royalty fee) that can take care of other bollworms like American and spotted bollworms.
MMBL response
MMBL, which licences Monsanto’s GM cotton technologies to seed firms in India, denied the allegation that it had not addressed the resistance. “We had, as early as in September 2015, informed the Genetic Engineering Appraisal Committee (GEAC) of the high level of tolerance to Cry2Ab protein,” an MMBL spokesperson said. The firm blamed non-adherence to recommendations on Insect Resistance Management (IRM) practices for the development of the resistance. “We asked seed companies in February 2016 and in March 2017 to advice farmers about the importance of following the prescribed guidelines,” he said. It is understood that the firm is in the process of giving a point-by-point rebuttal to the issues raised by the NSAI.
An apparel and textiles park will be set up on the outskirts of the Bihar capital for which a land tract spread over more than 100 acres has been earmarked, Bihar Deputy Chief Minister Sushil Kumar Modi said here on Thursday.
Speaking after the inauguration of a three-day fair organised by the Bihar Readymade Garments Association, Sushil Modi said 115 acres of land have been earmarked in Bihta for the proposed park.
The park will be set up as part of the state government’s policy to promote textiles, leather, Information Technology and food processing, he said.
‘Many incentives’
The Deputy Chief Minister, who also holds the finance portfolio, said a number of incentives were being offered to those willing to invest in the State which include exemption from land registration and conversion fees and a 10% grant on interest payable on bank loans. “Also on offer are 100 per cent refund on SGST (state goods and services tax), 50 per cent assistance on the amount payable towards EPF and ESI and a skill development subsidy of Rs. 20,000 per employee from Bihar”, he said. The Deputy CM appealed to readymade garment producers to invest in Bihar, stating that the sector had immense potential for job creation and pointing out that 90% workers employed in the sector at places like Mumbai and Bengaluru hail from the State.
Other crops are equally remunerative, says farm scientist
There is still some hope for cotton farmers to recover their investment even in the face of the attack of pink bollworm and the looming threat of other unknown pests surfacing to damage their crop in future, provided they are ready to incorporate changes in the pattern of cultivation, say agriculture scientists.
The largest commercial crop in Adilabad, Kumram Bheem Asifabad, Mancherial and Nirmal districts is cotton, with the commercial crop being cultivated in 6.7 lakh hectare. The crop also accounts for over 90 % of the about ?4,000 crore kharif loaning from banks as well as private moneylenders.
Cotton crop
“Farmers should be open to taking up other crops which can be equally remunerative. The kharif cotton crop should be terminated by November and crops like redgram, bengal gram or other horticultural ones should be cultivated in rabi,” Coordinator of Adilabad District Agriculture Advisory and Technical Training Centre Sudhanshu Kasbe said. He proffered a solution to the vexing problem of cotton farmers suffering losses owing to various factors, most importantly pest attack.
The agriculture scientist asserted that terminating cotton crop in November will control pink bollworm which has currently emerged as the nemesis of cotton farmers. “By the time the crop comes for uprooting, the farmer would have harvested 5 to 6 quintals of cotton in every acre which should give him some income,” he explained.
Alternate crop
“The uprooted crop needs to be destroyed and it could be shredded and mixed with the soil. This can convert it into organic matter which is beneficial for the soil,” he added. Bengal gram, among others, can be an immediate alternative crop in rabi as it fetches ?5,000 per quintal, equal to the price of cotton. The investment is comparatively low and the yield ranges between 8 and 10 quintals per acre making it remunerative for farmers, he said. Mr. Kasbe has done extensive research on the incidence of pink bollworm in the four districts. The incidence which damaged cotton in an estimated 25,000 hectares in Adilabad and some more extent in the Bhainsa-Mudhole area of Nirmal district occurred in heavy textured soils. “The incidence of pest attack is lower in KB Asifabad district where the soils are light textured. The damage to the crop is also equally low,” he pointed out.
The apparel industry, like most others, has constantly been complaining about the lack of labour flexibility, so critical in an export-driven industry that is inherently seasonal in nature.
The apparel industry, like most others, has constantly been complaining about the lack of labour flexibility, so critical in an export-driven industry that is inherently seasonal in nature. So, during the UPA tenure, it even suggested a double-NREGA package to the government—it would guarantee 200 days of employment in a year at a minimum wage of Rs 200 in return for flexibility. The plan didn’t fly and, among others, was a big reason for India’s poor exports performance. Unless there is labour flexibility, firms won’t grow, and unless that happens, this robs them of some of their competitiveness. In order to fix this, the chief economic advisor and the textiles secretary came up with a plan to eliminate as many of the hurdles to formal employment—among others, this envisaged the government defraying the mandatory provident fund contributions for the first three years and introduced the concept of fixed-term employment, obviating the need for messy solutions like dealing with contractors. The plan, as reported by FE on Monday, didn’t fly and just 655 units have availed its provisions so far. That, however, is not the result of the plan being faulty, but of circumstances. Demonetisation was a big blow to the industry that largely had cash transactions, and once things stabilised, GST hit it hard. While many of the state levies were subsumed within GST, this shouldn’t have been a problem since the refunds the industry got for taxes paid by it earlier would now come via GST.
Except, that hasn’t happened and most exporter refunds remain stuck. So, for the plan to really work, the government has to either ensure GST refunds come on time or find an interim solution; some solutions have been found and industry feedback needs to be taken to see if this is good enough. Fast-tracking the FTA with the EU is also critical as this will ensure Indian exports get duty-free status as is already the case with competitor nations like Bangladesh and Cambodia. Given the jobs-creating potential, it is critical this be resolved at the earliest. It is only when there is complete certainty that industry will invest since orders takes 6-8 months to materialise and investment horizons are even longer. Now that there is enough proof that the scheme is a workable one, the government needs to extend it to other areas as well.
The government had announced a leather package along the lines of the apparel one in the last budget, but it is best to announce it for all industries, not just the labour-intensive ones. Right now, thanks to pressure from the labour unions, the government is loath to announce more flexible labour laws—it had earlier planned that any units which employed under 300 persons would be free to shut down without requiring government permission. When this was shelved, it was hoped individual states would do this on their own, and while some like Rajasthan followed, important industrial ones like Maharashtra just back-tracked as well. Fixed-term employment doesn’t really affect the existing work force—indeed, it offers more stability and higher salaries than the existing contractor system since the middleman’s commission is eliminated. In which case, it may be relatively easier for the government to push this plan—and even if there is some resistance, in an election year, when generating jobs is critical, it is the government’s only hope.
