CALL US : 
WAPP : 
NEW DELHI: Amazon, Google, Apple and other foreign companies operating in the ecommerce space will have to register themselves for goods and services tax (GST) in all the states in the next 10-12 days.
The government has said ecommerce companies need to collect tax at source from October 1. To comply with tax collected at source (TCS) rules, ecommerce players need to register with every state. This provision applies to foreign players as well to cater to Indian consumers.
The industry has pitched for single registration in place of multiple state registrations as it would increase their compliance costs, but the government has so far maintained that they need to register in all states. Industry is pinning hopes on government permitting single registration.
Under the provisions, notified entities have to deduct up to 1% state GST and 1% central GST on intrastate supplies of over Rs 2.5 lakh. In the case of interstate supplies of over Rs 2.5 lakh, TDS will be 2% integrated GST. These provisions are aimed at checking tax evasion as TDS/TCS will leave a trail of transactions. In the case of foreign ecommerce platforms, there will be no TCS liability if the seller is based outside India.
A clarification to this effect was given at a meeting between ecommerce players and the Central Board of Indirect Taxes and Customs held on Tuesday, according to a person privy to the deliberations of the meeting.
Though, the provision mentions the rate as up to 1%, the rate for now will be 0.5% each for state and central GST.
For ecommerce companies, this implies a deduction of 1% from the payments to their suppliers for goods sold on their platforms that will have to be deposited with the government. Tax experts said the government should provide for centralised registration for foreign ecommerce players.
There is no exemption from registration for foreign ecommerce companies,” said Pratik Jain, national indirect taxes leader at PwC. “Further, as per the current provisions, even foreign companies will have to take registration in each state where the vendors might be supplying from. It would mean significant increase in compliances,” he said.
Archives
Kerala, Maharashtra working on measures to check evasion, mis-reporting
Big bang rate cuts in Goods and Services Tax are unlikely to take place for sometime as the Centre and States are now keen to shore up revenue collections and touch, if not exceed, a monthly mop-up of ?1 lakh crore.
The Centre and States are working on a number of anti-evasion measures aimed at improving compliance as they look to increase revenue mop-up under the new indirect tax regime. “It has been over a year since GST was rolled out. The tax has now stabilised to some extent and assessees are quite familiar with it. Improving compliance is now the top priority,” said an official familiar with the development, adding that more rate cuts will further hit revenue collections. Centre and State officials are understood to be discussing ways to improve collections while the GST Network has been asked to use more data analytic tools to check leakages and mis-reporting.
States like Kerala and Maharashtra have already started working on such measures. Kerala has started cracking the whip on benami GST registrations.
In the wake of the recent floods, the State has asked its tax officials to work on curbing tax evasion practices and leakage of revenue by ensuring that they conduct field visits as soon as a registration application is filed on the GST Network. It has also asked officials to be vigilant in registration of “evasion prone” commodities like plywood, veneer and packing material.
Timely filing of GST monthly returns, monitoring of input tax credit and checking e-Way bills for consignments are other measures that the States are adopting to prevent leakage of revenue.
Maharashtra has now alerted its tax officials to a case where ?1.12 lakh crore was wrongly availed by a company as credit for GSTR -3B. While a team of tax officials that visited the company made it reverse the credit, officials are now keeping a close watch on such issues as well, said another source.
Revenue collections from GST dropped to ?93,960 crore in August from ?96,483 crore in July because of the impact of large- scale duty cuts and more of this may be felt in September.
The Finance Ministry had set a monthly target of ?1 lakh crore from GST revenue but it was only in April that the gross GST collection rose to ?1,03,458 crore.
India’s world-beating GDP growth numbers are riding the wave of an “unlocking” of efficiency due to contribution from sectors that weren’t easy to track in the past, said Nicolas Aguzin, chairman and chief executive officer, JPMorgan Asia Pacific.
“India’s growth over eight percent with relatively low inflation merits attention,” Aguzin said in an interaction with BloombergQuint. “Newer sectors that weren’t easy to track in the past are being considered. We don’t account for those efficiencies.”
He said that Asia’s third-largest economy tends to overestimate the impact of inflation and underestimate growth.
Key highlights from the conversation:
Impact Of U.S.-China Trade War
Trade activity, growth rates fairly strong despite all the noise around trade, exchange rates and rout of emerging markets.
Underlying structure of economies still seems to be solid.
Headlines around trade, Federal rates yet to have full impact.
Recession 2.0 On Cards?
Lot of indicators normal, but care needed on investor sentiment and appetite.
Need dialogue between U.S. and China over resetting current environment.
Intra-Asia Trade Activity
Surprisingly, there’s a lot of activity from Japanese corporations trying to leverage growth in the pan-Asian region.
North Korea softening its stand on nuclear bases will positively help in overcoming risks around Asia.
India’s Headline GDP Numbers
India overestimates the impact of inflation and underestimates growth.
Indian business and investor community tends to be conservative. In reality, numbers end up working out pretty well.
GDP numbers translating into meaningful investments: Walmart acquiring Flipkart and UPL buying Arysta are significant transactions.
Effects Of Trade Deficit, Rupee Slide
Factors played a role in investors turning more cautious.
Rupee devaluation caused by investors reallocating their portfolio away from domestic bonds.
The Indian textile and apparel body, Tirupur Exporters Association (TEA) has requested the central government to extend the exemption from the payment of IGST while importing machinery under EPCG scheme, which is currently valid till the end of this month.
Raja M Shanmugham, President, TEA marked out that if the exemption is not extended, exporting units will come under the additional burden of paying IGST. “Upfront payment of IGST will affect the working capital of the exporting units as the refunds of GST through ITC refund route will take time to reach in hands of the exporter,” the president added.
The textile and apparel body elucidated that since over 80 per cent of the exporting units is (Micro Small And Medium Enterprises) MSMEs, it is difficult for them to meet their financial requirements, which eventually affects their day to day operations.
Shanmugham added that constant modernization is the need of the hour for the apparel exporting units, as nowadays the buyers are demanding consistent quality and installation of state of the art machinery.
Notably, TEA’s president said that he has sent letters to the central government urging it to extend the IGST payment exemption on urgent basis.
The thriving small town of Tiruppur in Tamil Nadu, which is now the knitwear capital of India, was just a tiny village around four decades ago. It used to be part of Mangalam panchayat and Palladam taluk, but today these two places are subsumed under Tiruppur, which has emerged as a district headquarters of the eponymous district.
Raja M Shanmugam, president of Tiruppur Exporters’ Association and founder of Warsaw International, a garment export company, shared the story of Tiruppur at an award function in VIT Vellore, and shared its special characteristic as a town that birthed a number of entrepreneurs.
“In Tiruppur there is a saying, ‘today’s labourer is tomorrow’s owner’,” said Shanmugam, in his address after receiving The Weekend Leader – VIT Amazing Entrepreneur Award from Dr D Ashok, Dean, VIT Business School.
Shanmugam said Tiruppur had created many entrepreneurs, and it was unlike Sivakasi, an industrial hub in Tamil Nadu, known for its printing and firecracker industries, where the complete business was in the hands of a few families.
Tracing his journey as an entrepreneur, Shanmugam, 53, said he started Warsaw International in 1989 along with his brother M Ramaswamy after he failed to achieve his dream of entering the civil services and becoming an IAS officer.
Since 1992 they began to export. For several years the company supplied to a single international client, but now has added multiple clients.
Tiruppur, Shanmugam said, was a resilient town and the industry bounced back from a difficult period in 2011 when more than 700 dyeing and bleaching units were shut down on pollution grounds following a court order.
“The industry implemented Zero Liquid Discharge facilities and resumed operations,” he said, answering a student during a panel discussion with VIT Business School students.
Responding to another query, Shanmugam said the industry faced challenges post-demonetisation and Tiruppur’s turnover declined from Rs 46,000 crore to Rs 44,000 crore in 2017-18. This year, the industry is back on the growth track, he said.
The panel discussion was moderated by P C Vinoj Kumar, editor, The Weekend Leader. – TWL Bureau
The textile industry, which earns 60% of total export proceeds, was jubilant on acceptance of a long pending demand of a massive cut in input costs and vowed that it would double the exports in the next five years.
The Pakistan Tehreek-e-Insaf (PTI) government, which is in the phase of reshaping economic policies, announced on Tuesday a reduction in regulatory duty on the import of raw material by the export industry, especially for the five zero-rated sectors.
The cut in duty on 82 items would give a benefit of Rs5 billion to the textile industry in remaining months of the current fiscal year 2018-19.
This is in addition to the Rs44-billion benefit the industry, especially that located in Punjab, is being provided through gas subsidy to make the utility price uniform across all four provinces in the country.
Finance Minister Asad Umar, while presenting the Finance Supplementary (Amendment) Bill 2018 in the National Assembly, said nearly 500,000 workers were jobless in Faisalabad and machinery was being sold at the price of scrap.
“We wanted to revive it (textile industry). We have, therefore, provided Rs44-billion benefit for the textile industry in Punjab so that they can retain their competitiveness among regional countries. We will also work to ensure more benefits for the zero-rated sectors in our electricity policy,” Umar said.
“The announcements from the government will help in reviving the $3-4 billion textile industry in Punjab,” All Pakistan Textile Mills Association (Aptma) Secretary General for Punjab Chapter Anisul Haq told The Express Tribune.
“Besides, the entire textile industry chain (starting from raw material manufacturers to value-added textile units) is estimated to invest around $7 billion over the next five years,” he said.
“The targeted revival of the industry along with new investment will help double textile exports in the next five years.”
The industry earned $13.53 billion in export proceeds in the previous fiscal year ended June 2018 that came to around 58% of total exports of $23.22 billion in the year, according to the Pakistan Bureau of Statistics (PBS).
In the first two months (July-August) of the current fiscal year, the industry fetched $2.26 billion in exports or 62% of the total export proceeds of $3.66 billion.
He elaborated that the gas tariff has been set at Rs600 per million British thermal units (mmbtu) for the entire textile industry across the country irrespective of the fact that the industry utilises locally produced gas or the imported one (RLNG or Re-gasified Liquefied Natural Gas). Earlier, industry in Sindh was using locally produced gas priced at Rs600 per mmbtu, while the same industry in Punjab was mostly utilising RLNG whose current tariff stands at Rs1,520 per mmbtu, he elaborated.
“The government has also promised on the National Assembly floor on Tuesday it would reduce electricity tariff for the industry to the regional competitive level,” Haq added. Besides, the government is also working on an export package separately as well, he remarked.
Topline Securities said in a commentary on the mini-budget “reduction on regulatory duty on imported inputs of textile is positive for textile companies.”
To note, in its commitment to increase exports, the government did not increase gas prices for the textile sector in Monday’s Economic Coordination Committee meeting, it added.
AFTER making a huge come back, the curtain comes down on the 2018 cotton marketing season with production hitting 130 000 tonnes, the highest output in nearly five years.
This year’s output — achieved on the back of Government support through the Presidential Inputs Scheme — is 76 percent higher than last year’s national output.
For the Cotton Marketing Company of Zimbabwe, which runs the government input programme, intake volumes grew 140 percent from 54 000 tonnes it bought last season.
Most private companies – ditched by farmers over exploitative contract schemes – did not participate last season arguing it would not make economic sense to run a viable scheme parallel to the government’s free inputs support programme.
“We have few deliveries trickling in the Lowveld but we should be done end of this week,” Pious Manamike, managing director of Cottco told The Herald Business yesterday.
According to the Reserve Bank of Zimbabwe cotton exports are projected to increase by up to 240 percent this year, on the back of growth in raw cotton production.
At least $85 million is expected this year from ginned cotton — also known as lint — from $25 million earned last year, Dr John Mangudya, central bank governor said recently.
Cotton, once one of the country’s largest foreign currency earners had lost glitter as farmers shunned the crop due to lack of funding and poor prices offered by producers.
Meanwhile, the Tobacco Industry and Marketing Board yesterday invited bids from companies to supply inputs under the $85,3 million facility for lending to small-scale farmers, as it seeks to boost output of the country’s biggest single foreign currency earner. The new fund, set up by the Reserve Bank of Zimbabwe and other banks, comes at a time when tobacco deliveries hit a record 249 million kilogrammes this year, the highest in nearly two decades. The RBZ is offering the facility to TIMB through Agribank to finance procurement of inputs and working capital to increase production.
Of the facility about $66,2 million will go towards procurement of inputs for production covering about 51 000 hectares. The inputs worth $15,3 million to cover 11 000 ha have already been purchased and distribution was underway. In a statement yesterday, the TIMB invited bids from companies to supply fertilisers, chemicals, packaging materials, coal for curing tobacco and provision for storage facilities.
After marking its presence in 15 countries, ThreadSol (www.ThreadSol.com) is all set to explore the African apparel industry to transform manufacturers to super vendors. This move comes at a time where the president of Kenya has decided to dedicate his energy in achieving the big four agenda as a way to improve the economy of Kenya and create more job opportunities. Manufacturing is one of the pillars in the big four agenda, and Threadsol has the opportunity to help in raising the share of this industry by providing better processes for manufacturers.
ThreadSol – the innovative garment tech company, participated in Origin Africa event 2018 held in Kenya. During the fair, ThreadSol presented its range of innovative software solutions for the African apparel manufacturers. ThreadSol is also set to participate in the next African event of ATF (International Apparel, Textile and Footwear trade exhibition) from 20th to 22nd November in Cape Town, South Africa to present the solutions.
ThreadSol’s innovative solutions work towards transforming the manufacturers to super vendors. The solutions: intelloCut and intelloBuy, helps in reducing the planning time by almost 80%, reduce fabric sourcing cost by acting on data and insights. These solutions are powered by the latest IT technologies of artificial intelligence, Big Data, and Mobility. Consequently this solution reduces lead time and cost for manufacturers making them to be able to handle more styles, cater to in-season change and at the same time, improve the topline and bottom line of their businesses.
“The current global sourcing trends are based on 3 major things: trend injection- the reactive approach of the brand to competition’s product range, read & react- small SKUs to test market response, and in-season chase- revise manufacturing POs to focus on fast selling goods”, says Suhrud Panigrahi, Key account manager at ThreadSol.
To keep up with these trends of fashion brands, the apparel manufacturers need agility. An interesting term used by Mr. Panigrahi is ‘Super Vendors’. “A super vendor is a manufacturer who can work upon these trends by not only controlling costs of manufacturing, but also innovate the products to take pressure off the brands. Another compelling characteristic of a super vendor is to postpone or disrupt the order bookings for reactive trend injections”, adds Mr. Panigrahi. The innovative solutions by ThreadSol have been implemented by over 150 apparel manufacturing facilities and they have reduced cost for manufacturers and improved on their output. Since the requirements of high and fast sourcing models are on a rise, which aims at smaller lead time and shorter order runs, it is becoming very difficult for countries like Bangladesh to keep up with these trends. The same can happen in Africa, if the manufacturers do not act towards becoming a super vendor.
“The African manufacturers HAVE to become super vendors”, says Mr. Anas Shakil, Head of Emerging Geographies and Senior Partner at ThreadSol. “They need to reduce lead times and cost better to handle more styles, cater to in-season change and at the same time, improve the topline and bottomline of their businesses”, adds Mr. Shakil
Cotton quotes dropped in Brazil in the first fortnight of September due to slow trading pace in the spot market. However, the decline was not as much as seen in previous weeks. From August 31 to September 14, the CEPEA/ESALQ cotton Index, with payment in 8 days, decreased a slight 0.23 per cent, closing at 3.1822 BRL per pound on September 14.
“While purchasers were searching for high quality batches at lower prices, sellers were supplying heterogeneous batches, which increased the competition between agents,” Center for Advanced Studies on Applied Economics (CEPEA) said in its latest fortnightly report on the Brazilian cotton market.
A large volume has already been sold and, as harvesting and processing advance, cotton farmers focus on the deliveries, which, in some cases, are late. Besides, the recent dollar appreciation against real fastened the delivery pace and strengthened price fixing for contracts this month, the report added.
Meanwhile, data from IMEA (the Mato Grosso Institute for Agricultural Economics) indicate that, until September 14, harvesting of the 2017-18 crop in Mato Grosso, the largest cotton producing province in Brazil, had reached 99.47 per cent of the state area. This is above the last five years average of 93.38 per cent.
Conab (the National Company for Food Supply) has revised its estimate for the 2017-18 Brazilian crop upward by 2 million tons. Conab expects Brazil’s 2017-18 crop to be 31.1 per cent higher than the previous season, chiefly due to a 25.1 per cent increase in the area sown with cotton, which touched 1.17 million hectares. The average productivity is also projected 4.8 per cent higher than 2016-17 to 1,708 kilos per hectare in 2017-18.
In terms of international trade, cotton shipments from Brazil turned positive after dropping for nine consecutive months, according to Secex (the Secretariat of Foreign Trade). In August 2018, cotton exports were 21,400 tons, around three times of 8,700 tons exported in July 2018, but still 68.6 per cent lower than in August 2017
Visitors at this month’s Intertextile Shanghai Apparel Fabrics are encouraged to check out country and region pavilions from Hong Kong, Japan, South Korea and Thailand, in addition to pavilions from India and Pakistan, and two Taiwan Pavilions to learn about the latest trends.
“While New York, Milan, Paris and London have traditionally been seen as the most prominent fashion capitals in the world, apparel brands and consumers are increasingly turning to Asian trends. Although Tokyo has long been known for stand-out street style, it’s only recently that the Seoul effect – a rise of South Korean popular culture, such as K-pop – has led to even more globally influential trends from the Asia-Pacific region,” the show organisers explain.
From 27-29 September, an exciting array of leading exhibitors will join the country and region pavilions. With the Asia-Pacific region’s apparel industry booming, economic growth can extend throughout the supply chain, creating unlimited opportunities for textile innovation. Highlighted exhibitors will show the latest fabrics and fabric technologies on the market, designed with global trends and catwalks in mind.
Four new Japanese trends
The popular Japan Pavilion will return this year, predicted to once again be packed with buyers seeking the latest Japanese styles and trends. The Japan Fashion Week Organisation will display high-quality fabrics from 31 Japanese companies, while the accompanying Japan Pavilion Trend Forum introduces four new trends: Egoist’s Essence, Lost in Utopia, Rustic Logics and Fashionista – Instagram. In touch with Japan’s unique sense of style and technologies embedded in a long history of fashion development, the Autumn/Winter 2019-20 trends each explore blended palettes and balance soft hues with vivid colours, presenting a must-see insight into the world of Japanese fashion.
Highlighted Japanese exhibitors include Amaterrace’s high-performance functional fabrics and Crystal Cloth’s woven cotton, silk and print textiles. Daiichi Orimono will bring its super-high-density woven fabrics. Another must-see exhibitor is Sanyu Trading, featuring its wide range of in-stock, high-quality denim, knit fabrics, synthetic fibre fabrics and yarns.
Korea Pavilion
Not forgetting another emerging centre of fashion is the nearby Korea Pavilion, organised by the Korea Fashion Textile Association (KFTA), which will bring a variety of leading South Korean exhibitors. Alphafabric will showcase innovative fabrics and accessories with unique finishing for fashion trends, such as fancy jacquard, digital prints and colourful tweed. Great Duksan will showcase an array of woven and knit fabrics, while Hyochang’s one-stop knitting and dyeing service and Yesung Textile International’s 100% premium cotton and cotton-mixed fabrics are predicted to attract plenty of visitors.
The Korea Pavilion will also feature a trend area, with its Autumn/Winter 2019-20 theme set as Redefine – a focus on sustainability in fashion and creative individualism in minority groups.
More sourcing options
What’s more, the Taiwan Pavilion exhibitors will be conveniently situated in hall 4.1’s Functional Lab. E. Textint will showcase its rainbow-coloured reflective heat transfers, suitable for outdoor and performance fabrics, and Honmyue Enterprise will bring sustainable 100% recycled polyester, which is water and oil repellent. Tiong Liong Industrial will display its triacetate conjugate fibre, which has been developed to expand and retract under different heat and moisture conditions for ideal breathability and ventilation.
In hall 5.1, the Taiwan Pavilion has arranged its own trend forum, which like the Korea Pavilion will place emphasis on sustainability. Think Taiwan for Textiles is Taiwan Textile Federation’s slogan, as the forum is set to gather around 300 textile samples for visitors sourcing products with excellent sustainability, innovation and functionalities.
More fashion fabrics can be sourced at the Hong Kong Pavilion, organised by the Hong Kong Trade Development Council, with highlights including Chun Wing Hing Textile’s synthetics and synthetic blend fabrics, Tak Shing Hong’s fashion lace and garment accessories, and Tak Hing Textile’s high-quality imported woven fabrics from Europe and Japan, plus its own fabrics from the company’s China and ASEAN region production lines.
