Wednesday, 6 March 2019

TAXATION UPDATES 06.03.2019





GSTR-9 AVAILABLE ON GSTN PORTAL FOR FILING ANNUAL RETURN

The Central Government has enabled GSTR-9 on GSTN Portal for filing Annual Return For Filing GSTR-9, an option of ‘Annual Return Tab’ has been enabled by the GSTN (Goods and Services Tax Network) which can be seen in the portal. The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 has been extended till 30.06.2019. GSTR-9 is prepared based on the earlier process of filling GSTR-1, GSTR-2, and GSTR-3. In GSTR-2, there was a requirement to report details of HSN wise summary of inward supplies. However, as GSTR-2 was not required to be filed till now, one will have to carry out an additional exercise to identify and report HSN wise summary from the books of accounts. As per section 35(5) of CGST Act, every registered person whose turnover during the financial year exceeds prescribed limit (Rs. 2 cr.) shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 which is called GSTR-9C and such other documents in such form and manner as may be prescribed. Hence, the requirement of GST Audit u/s 35(5) would arise only if the prescribed limit of turnover exceeds Rs. 2 cr. and certified reconciliation statement -GSTR-9C shall require to be submitted. On the other hand, GSTR-9 is an Annual return which is required to be filed by every registered person irrespective of threshold limit of turnover. Consequences for not filing GST Annual Return Notice to return defaulters– Section 46) Where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed. Levy of late fee– Section 47 (2) Any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter percent. of his turnover in the State or Union territory.
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CBDT GRANTS RETROSPECTIVE EXEMPTION TO STARTUP COMPANIES FROM ANGEL TAX W.E.F. 19.02.2019

In exercise of the powers conferred by clause (ii) of the proviso to clause (viib) of sub-section (2) of section 56 of the Income-tax Act, 1961 (43 of 1961) and in supersession of the notification of Government of India in the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes published in the Gazettee of India, Extraordinary, Part-II, Section (3), Sub-section (ii) vide number S.O. 2088(E) dated 24th May, 2018, except as respect things done or omitted to be done before such supersession, the Central Government, hereby notifies that the provisions of clause (viib) of sub-section (2) of section 56 of the said Act shall not apply to consideration received by a company for issue of shares that exceeds the face value of such shares, if the said consideration has been received from a person, being a resident, by a company which fulfills the conditions specified in para 4 of the notification number G.S.R. 127(E), dated the 19th February, 2019 issued by the Ministry of Commerce and Industry in the Department for Promotion of Industry and Internal Trade and published in the Gazette of India, Extraordinary, Part-II, section 3, Sub-Section (i) on 19th February, 2019 and files the declaration referred to in para 5 of the said notification of the Department for Promotion of Industry and Internal Trade. This notification shall be deemed to have come into force retrospectively from the 19th February, 2019.
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GOVERNMENT PROMISED TO LOWER CORPORATE TAX AS GST MOP-UP RISES: FICCI

The government has promised to lower corporate tax rate to 25 per cent for all companies once Goods and Services Tax (GST) mop-up improves, Sandip Somany said Tuesday. Somany said the discussions revolved around a wide range of issues, including taxation, job creation and boosting industrial output. He (Jaitley) has promised that as the revenue collections from GST go up over a period of time, he will rationalise the taxes for the rest of the corporate sector over the next few years, Somany said. In 2015-16 budget, the government had announced that the corporate tax rate would be gradually lowered to 25 per cent from 30 per cent over the next four years and exemptions available to companies would be phased out. In the budget 2017, the government had reduced corporate tax rate to 25 per cent for companies whose turnover was less than Rs 50 crore in financial year 2015-16. This benefitted 96 per cent of the total companies filing tax returns. The government in the next budget of 2018-19 extended the reduced tax rate of 25 per cent to companies with turnover of up to Rs 250 crore, a move which benefited the micro, small and medium enterprises. After this, out of about 7 lakh companies filing returns, about 7,000 companies which file returns of income and whose turnover is above Rs 250 crores remains in 30 per cent slab. With regard to US decision to withdraw duty benefits on Indian products under the Generalized System of Preferences (GSP) programme, Somany said it will make Indian industry less competitive. I'm sure government will take appropriate action and there will be dialogue between the two governments to make sure that this is not withdrawn in case of India, Somany added.
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INCOME TAX RETURNS WITNESS 30% GROWTH IN APR-FEB, OVER 3 LAKH VISIT WEBSITE TO CHECK NOTICES FROM I-T DEPT

The income tax e-returns filed for the April-February period has grown nearly 30% compared with the corresponding period in FY18. While almost 6.4 crore taxpayers filed returns in the first 11 months of the fiscal, the government is expecting 7.6 crore returns to be filed by the end of FY19 against 6.7 crore in FY18. In the last three fiscals, March alone has seen 0.8 crore (FY16), 1.1 crore (FY17) and 1.85 (FY18) crore e-returns being filed. The surge is seen after the I-T department started sending notices to people who are involved in high-value transactions but don’t file returns. For the current fiscal, the I-T department launched the non-filers management system and identified persons who had engaged in high-value transactions but failed to file I-T returns. In the first 15 days since its launch, 33,000 persons filed returns for the first time while 3 lakh people visited the e-filing website to check notices from the department. During the April-February period of the last two fiscals, the growth was more lower at 27%, 20% and 17% in FY 16, FY 17 and FY 18, respectively. At the end of FY14, only 3.8 crore e-returns had been filed. While the number of e-returns filed between assessment year (AY) 2013-14 to AY2017-18 grew by an average 25% per year, the effective taxpayer base expanded by an average of 9% only, registering double-digit growth rates in only two of these years. The tepid growth in effective taxpayer base is also threatening the government’s mop-up target for this fiscal which according to the revised estimate (RE) is pegged at 12 lakh crore, 20% higher than last fiscal. If the historical mop-up trend serves any guidance, some 65% of the annual direct taxes get collected in the first nine months of a fiscal and the balance in the fourth quarter. That means the personal income tax collections in Q4FY19 could be 1,85,150 crore, some 52,000 crore less than what the RE requires. Similarly, the corporation tax (CIT) may witness a shortfall of Rs 13,000 crore against the RE.
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COMPANY DIRECTOR’S BANK A/C CAN’T BE ATTACHED FOR RECOVERY OF GST: GUJARAT HIGH COURT

The Gujarat High Court has held that the Goods and Service Tax Department cannot provisionally attach bank accounts of directors of the company for recovery of taxes and penalty where the company has failed to pay the taxes and penalty. The bench comprising Justice Harsha Devani and Justice A P Thaker was considering a petition filed by M/s H.M. Industrial Pvt. Ltd Under section 83 of the CGST Act, if the circumstances therein are satisfied, to attach provisionally any property, including bank account, belonging to the taxable person, in such manner as may be prescribed. The term taxable person has been defined under sub-section (107) of section 2 of the CGST Act to mean a person who is registered or liable to be registered under section 22 or section 24 of that Act. The bench noted that in the present case, it is the petitioner-company which is registered under the provisions of the CGST Act and is, therefore, the taxable person. Under the circumstances, if at all, the provisions of section 83 of the CGST Act could have been invoked against the petitioner herein, however, under no circumstances, the same could have been invoked against the directors of the petitioner-company, the bench said. In the opinion of this court, reliance placed upon section 89 of the Act is thoroughly misconceived inasmuch the same relates to recovery of any tax, interest or penalty due from a private company in respect of supply of goods or services. Moreover, even if such amount cannot be recovered from the private company the directors of the company do not ipso facto become liable to pay such amount and it is only if the director fails to prove that nonrecovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company, that the same can be invoked. However, in any case, at this stage, section 83 of the Act does not apply to the directors of the private company. Under the circumstances, the impugned orders of attachment, to the extent the same attach the bank accounts of the directors, as set out in the statement at page 8 and 9 of the petition, at serial No. 1, 2, 3, 4, 5, 10 and 11 are concerned, are totally without any authority of law, the bench said.
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RS 40,200 CRORE VAT, GST DUES TO BE RECOVERED: GUJARAT GOVERNMENT

The state government has to recover outstanding sales tax, Value Added Tax (VAT), and GST of Rs 40,221.73 crore as of March 2018, Nitin Patel, said. The dues are to be recovered from 42,675 individuals i.e. an average of Rs 94 lakh in each case. To put the outstanding dues in perspective, the amount is just lower than the estimated SGST collection of Rs 42,750 crore by the state government in the current financial year. A senior government official said that the outstanding dues were mainly in cases where the individuals or entities had approached courts or filed appeals with higher authorities. With outstanding tax recovery of Rs 13,821 crore, Ahmedabad, the state's business hub, accounted for almost one-third of the total tax dues, the deputy chief minister's reply showed. It was followed by Vadodara with pending tax dues of Rs 5,720 crore and Kutch, with Rs 3,877 crore. Recovery of Rs 3,087 crore in due levies was to be made from Surat. It was followed by Morbi, the ceramic manufacturing hub of the country, with pending sales tax, GST and VAT dues of Rs2,907 crore. The reply showed that recovery of Rs 1,610 crore sales tax, VAT, and GST was pending in Bhavnagar, Rs 1,393 crore in Devbhumi Dwarka, Rs 1,187 crore in Bharuch, Rs 1,039 crore in Valsad, and Rs 923 crore in Mehsana. In cases barring those where stay orders have been issued by various authorities, steps are being taken under the Gujarat Sales Tax Act, Gujarat VAT Act, GST Act, and land revenue laws to recover the pending dues, the minister's reply said further. Action had been taken against 39,240 of the individuals to recover the pending due, the deputy chief minister's reply added.
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CASH DEPOSIT DURING DEMONETISATION-AO TO COMPLETE ASSESSMENT BY 30TH JUNE 2019

CBDT vide letter dated 15.11.17 had issued a SOP for issue of notice u/s 142(1) of Income-tax Act, 1961 for filing of returns of income pertaining to assessment year 2017-18 in cases related to substantial cash deposit during the demonetisation period. CBDT has stated that subsequently, notice u/s 142(1) was issued in around 3 lakh cases. However in around 87,000 cases out of these cases, assessees concerned have not filed their return of income in response to the said notice. Accordingly, as stated in its latest instruction, the Board has decided that cases in which said notices under section 142(1) have remained non-complied with, would be handled in the following manner :

1. An updated information regarding address, bank-account, transaction detail, etc. in the identified cases would be provided to the jurisdictional Assessing Officer (AO) by the Pr. DGIT (Systems). Further, an internal Guidance Note for assistance of AOs for verification of cash deposits and framing of assessments in demonetisation related cases shall also be issued subsequently by the Pr. DGIT (Systems).
2. In these cases, AO would proceed with completion of the ‘best judgement assessment’ under section 144 of the Act . The summarised form of relevant provision i.e. section 144(1)(b) of the Act is:

If any person fails to comply with all the terms of a notice issued under section 142(1), the AO after taking into account all relevant material which the AO has gathered shall after giving the assessee an opportunity of being hear make the assessment of total income or loss to the best of his judgement.

3. In ‘best judgement assessment’ order being framed under this SOP, the Range Head shall mandatorily issue directions from time to time under section 144A of the Further, Range Head would also monitor framing of the final assessment order.
4. The AOs should, through local enquiries, endeavour to identify possible addresses of the assessee as per the modes prescribed in the second proviso to Rule 127 of the Income tax Rules, The results of these enquiries are to be captured on ITBA in accordance with modalities to be provided by the Pr. DGIT (Systems).
5. While gathering material, section 133(6) of the Act should be suitably invoked by the AO so as to gather additional information about persons, transactions and fund flow from the banks where the suspected transactions took place. Such notices would be issued by the concerned AO after a careful appraisal of information at his disposal so that maximum possible additional information can be culled out. Further, a detailed analysis of past income tax returns, if available, should also be made to form an opinion regarding nature of transactions related to demonetisation.
6. On the basis of all material and evidence gathered by the AO, during the course of assessment proceedings, assessee would be duly provided with an opportunity to explain his/her case.
7. In cases where ultimate beneficiary of a transaction has been established, the concerned AO shall forward the material available at his/her disposal to the AO having jurisdiction over the ultimate beneficiary so that appropriate action can be initiated in that case as per relevant provisions of the Further, information regarding the entry operators in a particular chain should also be forwarded to the concerned jurisdictional AO for taxing the unaccounted commission receipts.
8. Wherever possible, the assessments in cases covered in this SOP may be completed by 31st March, 2019 and in any case by the first quarter of the next financial year i.e. by 30th June, 2019.
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GST AUTHORITY FINDS HARYANA-BASED S3 INFRA REALITY GUILTY OF PROFITEERING

The anti-profiteering authority has found Haryana-based real estate developer S3 Infra Reality guilty of not passing GST rate cut benefit totalling Rs 1.48 crore to its buyers of residential and commercial properties. The authority has also asked the realty firm to pass on Rs 57.76 lakh to the buyers of 'Auric City Homes' project as the company has already admitted lapses and passed on Rs 90.84 lakh to the purchasers. The investigation by the Directorate General of Anti Profiteering has found that in respect of 651 residential units, the realty firm has profiteered over Rs 1.45 crore. With regard to 13 commercial units sold in the said project, the company profiteered to the tune of Rs 3.01 lakh. The ruling was passed on a complaint filed before the Haryana State Screening Committee on Anti-Profiteering on April 4, 2018. The applicant had alleged that the realty firm did not pass on the input tax credit benefit to the buyers by way of commensurate reduction in prices after Goods and Services Tax (GST) roll out. The authority has also issued a show cause notice to the realty developer directing him to explain why penalty should not be imposed on him.
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PROMOTERS ARRESTED AS TAX OFFICIALS RAID COMPANIES SUSPECTED OF CIRCULAR TRADE

Suspecting companies of evading goods and services tax (GST), tax officials have started going after companies that are into circular trading, and arrested several promoters of such entities. While several insiders suspect circular trading may be used to inflate turnover or for bringing in black money in system, tax experts point out that this doesn’t necessarily mean tax evasion and that some genuine businesses are facing trouble on this count. The indirect tax department in February issued notices and raided premises of several companies that were allegedly inflating their turnover by selling goods from one company to another, officials said. They alleged fake invoices of Rs 25,000 crore were issued by small and medium companies across India to avail GST credit. Experts, however, argue that circular trading has been an old trick for several businesses, and in itself doesn’t necessarily result in tax evasion. Tax lawyers are planning to file habeas corpus challenging the tax department's arrests, claiming that while circular trading is frowned upon, in most cases no fake invoices were issued and they didn’t result in any loss to the tax department — an allegation levelled by tax officials. The department suspects that several companies are merely buying fake bills that help them claim input tax credit and actual buying and selling of goods is not taking place.
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PUNJAB CABINET RELAXES GST TO BENEFIT INDUSTRY

In a move to boost industrial development in the state, the Punjab Cabinet on Wednesday approved an amendment to the Goods and Services Tax (GST) incentives notified under the Industrial and Business Development Policy 2017. The amendment enables industrial units to choose between net GST incentives or incentivised State Goods and Services Tax (SGST) on intra state sale, a government statement said. It gives units -- which have filed their common application form on the Invest Punjab Business First portal between October 17, 2017 and October 17, 2018 (both days inclusive) -- the one-time option to opt for either Net GST incentives or incentivised SGST on intra-state sales. The option can be availed within 90 days from the date of the notification The incentivised SGST to be considered for reimbursement would mean that the eligible unit will be entitled to get reimbursement of SGST amount paid through cash ledger against the output liability of SGST on sale of eligible products.
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INDIA INC’S IPL TICKET SPEND TO QUALIFY AS DEDUCTIBLE

India Inc’s spending on free tickets of cricket leagues such as the India Premier League (IPL) to its customers can be allowed as a deduction from the total income while computing tax. In a ruling that benefits FMCG, consumer durable and telecom companies, the Hyderabad bench of the Income Tax Appellate Tribunal rejected the contention of tax authorities and allowed deduction of expense on distribution of free IPL tickets for the purpose of business. Typically, companies distribute gifts to customers or dealers on special occasions to further business relations. Provisions of the Income Tax Act, 1961, allow for the deduction, subject to certain exceptions, in lieu of any expenditure incurred wholly or exclusively for the purpose of business. The current case pertains to EPE Process Filters & Accumulators Pvt Ltd, a manufacturer of hydraulic & process filters and hydro-pneumatic accumulators. The company had in 2009-10 distributed IPL tickets to customers and business associates. Tax authorities held that since the taxpayer had failed to produce any evidence that the tickets were indeed distributed among its business associates, deduction of expenses could not be allowed. The ITAT concurred with the taxpayer’s arguments that such expenses served the purpose of promotion of business relations and goodwill among the customer base of the company and hence qualified as a deductible business expenditure. However, since supporting evidences were not submitted before lower authorities, the ITAT sent the matter back to the tax officer to consider the evidence submitted by the taxpayer and to verify whether these parties were the customers of the taxpayer and whether they were given the IPL season tickets. The Income Tax Act specifies business expenses that are allowed as deduction and for other expenses which are not specified, the principle to be followed is that such expense should be incurred wholly and exclusively for business purposes, tax experts said. It is a common practice for businesses to incur expenses towards gifts, free samples, promotional material, etc., on certain occasions like festivals and events, to promote their brand and grow their business. This ruling reaffirms the commonly understood principle that if an expenditure has been incurred for the furtherance of business interests, then it should be allowed as a deduction, said Vikas Vasal, national leader-tax & growth advisory, Grant Thornton India. However, necessary care and caution, along with robust documentary evidence should be maintained by the tax payers to substantiate their claim in case of any dispute with the tax authorities, Vasal added.
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INDIA MAY IMPOSE RETALIATORY TARIFFS ON US GOODS FROM APRIL 1

India is likely to impose higher duties on 29 goods imported from the US from April 1, adopting a firmer stance in relations with one of its biggest trading partners, which withdrew benefits under the Generalised System of Preferences (GSP). The decision could derail the substantive package that India and the US were working on to resolve trade issues. That package is now off the shelf since the GSP review was triggered but there is still a period of 60 days, people from the external affairs ministry said. Higher duties have been proposed on US walnuts, chickpeas, lentils, boric acid and diagnostic reagents, among other goods, imposing an additional burden of $290 million on them. The increased levies, proposed in June 2018 after the US announced higher tariffs on certain steel and aluminium products from which India had sought exemption, have been deferred six times in view of the bilateral trade dialogue. We will wait for the April 1 deadline and then impose the higher tariffs, said an official aware of the details. India had repeatedly extended the deadline for imposing higher duties in the hope of resolving ongoing trade issues with the US ranging from GSP, agriculture and dairy to medical devices, telecom and e-commerce. When the US has decided to withdraw the export benefits and the impact on India is marginal, then we should take it forward and impose higher tariffs on their products, said an expert on trade issues.
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NO ACTION PLAN READY AGAINST US TRADE MOVE

For close to a year, India has been threatening to impose retaliatory tariff of $235 million on 29 American goods to counter the Donald Trump administration’s decision to raise import duty on steel and aluminium goods. But nine months after the plan was announced, the government is still dilly-dallying on countering US government’s assault against Indian exports and visas, even as the American authorities near a deal with China. The deadline to impose duties on products, ranging from almonds to lentils, has been postponed half-adozen times, with April being the latest cut-off. All these months, the Narendra Modi government had hoped that Trump would go easy and a deal could be reached through a dialogue at the commerce minister level. What the Indian authorities kept ignoring was the US government’s repeated attacks on its policies — ranging from export promotion schemes and farm subsidy to import duties — as well as disputes at WTO. We have little choice but to keep our channels of engagement open, an official told. Several officials suggested that the coming months could see US pressure intensify as Trump readies for re-election, especially on the demand to lower import duties. The confusion was on display on Tuesday too as officials from the commerce department, who are usually reluctant to consult the ministry of external affairs on trade issues, opted to get the official response vetted by the foreign office. Government functionaries seemed to suggest that the withdrawal of benefits under the generalised system of preferences would not make a significant dent to India’s exports to the US. Commerce secretary Anup Wadhawan, who has been dealing with US negotiators for the last few years, suggested the hit could be as low as $190 million. In private, officials admitted, they could do little to counter the unilateral move by the US. In any case a country like India should not be seeking it, if we have ambitions to be on the global high table, said an officer. But clearly, that was not the case during the meetings with US authorities.
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INDIA WEIGHS RETALIATORY TARIFFS ON US IMPORTS WORTH $10.6 BILLION

India is likely to impose retaliatory tariffs on $10.6 billion worth of goods imported from the US, after the Trump administration decided to scrap duty benefits on $5.6 billion worth of exports from India by May, following the collapse of trade negotiations. The next deadline for the tariffs to kick in is 1 April.We are weighing all our options. The retaliatory tariffs may kick in either after the current deadline ends or before that. We are reserving our right to drag the US to the WTO (World Trade Organization) as the GSP (generalized system of preferences) withdrawal violates the principle of non-discrimination, an Indian commerce ministry official said, on condition of anonymity. India has implemented a wide array of trade barriers that create serious negative effects on United States commerce. Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion, the office of USTR said in a statement late on Monday. Wadhawan said the impact of the US action on India’s exports will not be very significant as the duty benefits are worth only $190 million on exports worth $5.6 billion. An official said that India would continue to work with the US to find a solution as there are 60 days left. We have been pointing out to them that US exports to India have gone up by 30% in the past year and this has come in a globally depressed market. Oil and gas imports from the US are increasing, he added.
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PIL BLAMES TATA STEEL OF HOARDING MINES

The Odisha High Court will hear a public interest litigation on March 25 filed against Tata Steel for holding excess mining rights in Odisha and the State government’s move to increase the maximum area limit for lessee of iron ore mines from 10 sq km to 75 sq km. In a petition with the High Court, Bijaya Kumar Mishra from Angul district of Odisha said it is pertinent to note that out of 56 sq km of mining lease area held by steel companies in Odisha, Tata Steel owns 49.61 sq km of iron ore and manganese mines which account for 89 per cent of total mining leases ever allotted to steel companies. Interestingly, Section 6 of Mining and Mineral Development (Regualtion) Act restrict mining area to be held by a miner at 10 sq km. The State government recently recommended to the Centre to raise the maximum area limit for iron ore lessees to 75 sq km. The Centre had increased area limit for bauxite deposits to 50 sq km.
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WHAT HAPPENED AT BALAKOT? SATELLITE IMAGES REVIEWED BY REUTERS TELL A DIFFERENT STORY

High-resolution satellite images reviewed show that a religious school run by Jaish-e-Mohammad (JeM) in northeastern Pakistan appears to be still standing days after India claimed its warplanes had hit the Islamist group's training camp on the site and killed a large number of militants. The images produced by Planet Labs Inc, a San Francisco-based private satellite operator, show at least six buildings on the madrasa site on March 4 six days after the airstrike.Until now, no high-resolution satellite images were publicly available. But the images from Planet Labs, which show details as small as 72 cm (28 inches), offer a clearer look at the structures the Indian government said it attacked. The image is virtually unchanged from an April 2018 satellite photo of the facility. There are no discernible holes in the roofs of buildings, no signs of scorching, blown-out walls, displaced trees around the madrasa or other signs of an aerial attack. The images cast further doubt on statements made over the last eight days by the Indian government of Prime Minister Narendra Modi that the raids, early on February 26, had hit all the intended targets at the madrasa site near Jaba village and the town of Balakot in Pakistan's Khyber Pakhtunkhwa province.
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CURBING PONZI SCHEMES: AS GOOD AS IT CAN GET

The new Act to prevent gullible investors from getting fleeced goes a long way and plugs many gaps that exist in current laws. It doesn't just help depositors but could also help government in limiting conversion of black money into white. Barely three months before President Ram Nath Kovind signed the Unregulated Deposit Scheme Ordinance 2019, the West Bengal administration busted a deposit-taking racket right inside Nabanna, the state’s towering new Secretariat on the western bank of the Hooghly. The near-simultaneous occurrence of the two events demonstrates the objective of successive governments that have come up with laws to prevent fraudsters from taking gullible investors for a ride - and the fearlessness and ingenuity of those that design such ostensibly lucrative investment options to dupe the average saver. While schemes designed are many, the most common among fraudsters is to promote a deposit scheme in an informal way among communities where people are looking for a plan to park savings. Banning of the Unregulated Deposit Scheme Ordinance, which would ultimately become an Act, looks to address the pitfalls in many regulations of the Reserve Bank of India and the Securities & Exchange Board of India (Sebi), and many other rules from a plethora of administrative branches. The law is all about banning deposit taking by unincorporated entities, and other unregulated deposit schemes. This is more like a belated response to the scam that broke out in West Bengal and continues to break out at frequent intervals elsewhere in the country, said Vinod Kothari, a consultant. The law now confers jurisdiction on every unregulated deposit scheme with the state government – thereby, in a manner of speaking, exonerates RBI or Sebi from the surveillance over such activities, he said.
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GOVT URGES SUPREME COURT TO THROW OUT RAFALE REVIEW

The central government urged the Supreme Court on Wednesday to throw out review petitions filed in the Rafale case only on the ground that it was based on documents stolen from the Ministry of Defence. These where stolen from the Ministry of Defence. An enquiry is on, Attorney General K.K. Venugopal told a three-judge bench led by Chief Justice of India Ranjan Gogoi. The review and perjury applications must be thrown out at the outset only on this ground, he said. He claimed that the price details were also reported and would affect future procurements It will delay procurements and affect national security, he said. Criminal action would also be taken against the newspapers who publushed these secret notings, he said.
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THE DECISION TO BUY 36 RAFALES WAS DONE BY AJIT DOVAL: CONGRESS

In a press conference, Congress's Randeep Surjewala said that the deal was not finalised by the Indian Negotiating Team of the Defence Ministry, rather it was finanlised by National Security Advisor Ajit Doval on 12th and 13th January of 2016. He (Doval) was not part of the Indian Negotiating Team or was authorised by the Cabinet Committee of Security Affairs, Congress charged. It is now clear that the prime minister caused loss to the exchequer of India by misusing his office. The party alleged that the Modi govt has not included the price of India specific enhancements in the overall cost of the Rafale deal. Also, the party said, the cost of Rafale jets went upward despite not including the bank gurantee or technology transfer. Surjewala said that time thus has now come for registration of an FIR and an investigation into the matter.
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INDIA'S IMPORT DUTIES NOT HIGH, WITHIN GLOBAL TRADE NORMS OF WTO: GOVERNMENT

Rejecting US claims of imposing tremendously high tariffs, India Tuesday said its import duties are not high and are within the norms of the World Trade Organisation (WTO). We do not agree with that at all. Our tariffs (import duties) are very consistent with the bound rates that we are entitled to in the WTO, Anup Wadhawan told. Our tariffs are very comparable to more liberal developing economies and some developed economies, he added. He said India's tariffs are within its bound rates under the WTO commitments, and on the average are well below those rates. India's trade weighted average tariffs are 7.6 per cent, which is comparable with the most open developing economies, and some developed economies. The commerce ministry, in a statement, said on developmental considerations, there may be a few tariff peaks, which is true for almost all economies. India is also a thriving market for US services and e-commerce companies like Amazon, Uber, Google and Facebook with billions of dollars of revenue, it said.
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US WITHDRAWAL OF GSP BENEFIT FROM INDIA WILL NOT HURT EXPORTS SIGNIFICANTLY, SAYS COMMERCE SECY

The US decision to withdraw duty benefits on Indian products under the Generalized System of Preferences (GSP) programme will not have a significant impact on exports to America a top government official said Tuesday. India exports goods worth USD 5.6 billion under the GSP, and the duty benefit is only USD 190 million annually, Anup Wadhawan said. GSP withdrawal will not have a significant impact on India’s exports to the US, the secretary told reporters.
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INDIA TO REIMBURSE FREIGHT FOR EXPORTS OF SOME FARM PRODUCTS

India will provide federal support for the transportation of some farm products to make Indian goods more competitive in foreign markets the government said in a statement on Tuesday. The scheme will be applicable for a year to March, 2020. The government will reimburse the freight paid by Indian exporters through a cash transfer to their bank accounts, the statement said. The free-on-board deals, where the buyer pays the freight, will not be covered by the scheme. It excludes key export items such as wheat, rice and meat.
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VIJAY GOEL: NO OTHER GOVT HAS TAKEN SUCH PROMPT AND STERN ACTION AGAINST TERROR

Vijay Goel on Tuesday said no other government had taken such prompt and stern action against terrorism. Goel also predicted that Modi would return as prime minister for a second term. Poora desh manta hain ki Modi hain to mumkin hain (India believes that hope is where Modi is). People are confident the next government will be formed under PM Modi. He is guiding all developmental activities in the country on one hand and giving stern and prompt reply to terrorism on the other, Goel said.
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AGUSTAWESTLAND: CHRISTIAN MICHEL CLAIMS IN COURT CBI ASKED HIM TO IMPLICATE CERTAIN PERSONS

Christian Michel, arrested in the Rs 3,600-crore AgustaWestland chopper deal, alleged before a Delhi court on Tuesday that CBI had asked him in Dubai to implicate certain persons in the case failing which he would face problems in jail. The threat to him was given before he was extradited to New Delhi, he said. Michel made the allegations through his lawyer before the court while opposing Tihar Jail authorities' move to shift him to a high security cell in isolation. In his submissions, jail superintendent Joginder S Sehrawat told the court that the accused was in a high security cell and the facilities were the best. He can be shifted to some other ward if he want, but those are already overcrowded. There was threat apprehension after Pulwama attack. Foreigners were given special care so that no harm is caused to them, he said, adding that the accused was 'high profile'. He also submitted that jail numbers 1, 3 and 4 were also high security jails and they were for undertrials while jail number 2 was for convicts.
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INDIA WILL HAVE 'ALL OPTIONS' AVAILABLE IN CASE THERE IS ANOTHER TERROR STRIKE: OFFICIALS

India will have all options available in case there is another terror strike, official sources asserted on Tuesday while maintaining that the government will insist on concrete steps by Pakistan in dismantling terror infrastructure. Sources also said that India has shared with the US the evidence of use of F-16 fighter jet+ by Pakistan during retaliatory aerial combat and was confident that the US is investigating the matter. Since Balakot strike, India is trying to build maximum pressure on Pakistan on the issue of terrorism, sources said. Pakistan has gone to all countries seeking mediation but there is greater understanding of India's position, sources said, adding India has told the international community that it is not an India-Pakistan issue, but about terrorism. If Jaish-e-Mohammed (JeM) chief Masood Azhar gets banned by the UN, Pakistan will get into a difficult situation as he has been residing there as per the Pakistan foreign minister's admission.
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NO RELATION BETWEEN AIRSTRIKE AND ELECTIONS: DEFENCE MINISTER NIRMALA SITHARAMAN

Nirmala Sitharaman has responded to the allegations of the Opposition that the Bharatiya Janata Party and Prime Minister Narendra Modi were trying to politicise the air strikes carried out by the Indian Air Force at Jaish camps in Pakistan. The Congress and other opposition parties have upped the ante against the government over attempts to politicise the IAF action. They have also questioned the claims of high number of casualties in the IAF strikes. Nirmala Sitharaman issued a statement saying the air strikes are in no way connected to the upcoming Lok Sabha elections. There is no relationship between the airstrike and elections. It was based upon intelligence inputs on terrorist activities in Pakistan, to be unleashed against India. It was not a military action, Sitharaman said.
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BALAKOT AIRSTRIKE 'NOT MILITARY ACTION' AS NO CIVILIAN DAMAGE: SITHARAMAN

Nirmala Sitharaman on Tuesday the Balakot airstrike, where the Indian Air Force targeted and destroyed a JeM camp in Pakistan last week, was not a military action as there was no damage to civilians. Vijay Gokhale had not given any casualty figure in the airstrike and he had only given a statement, which was the government's position, Sitharaman told.
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PAKISTAN'S CLAIMS ON INDIAN SUBMARINE FALSE PROPAGANDA: NAVY

The Indian Navy on Tuesday dismissed as false propaganda Pakistan's claim that it had thwarted an attempt by an Indian submarine to enter the country's territorial waters. In a statement, the Pakistan Navy claimed in Islamabad that it used specialised skills to ward off the Indian submarine from entering Pakistani waters. We have witnessed Pakistan indulging in false propaganda and spread of misinformation. The Indian Navy does not take cognizance of such propaganda. Our deployments remain undeterred, the Indian Navy said. In a brief statement, it said the Indian Navy remains deployed as necessary to protect national maritime interests.
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SUBRAMANIAN SWAMY ON DIGVIJAYA SINGH’S DEMAND FOR AIR STRIKE PROOF: DID US PROVIDE PROOF AFTER KILLING OSAMA BIN LADEN?

Bharatiya Janata Party (BJP) leader Subramanian Swamy on Tuesday hit back at senior Congress leader Digvijaya Singh over his remarks on IAF airstrikes in Pakistan’s Balakot. Swamy said that Congress party is lying on everything and questioned the need to reveal the exact number of casualties He also asked if America had provided details of Osama bin Laden’s killing. The statement comes after Singh questioned the claims put forward by Modi government over the number of terrorists killed in the air strikes by the Indian Air Force on February 26. Why does anyone need to give exact figures of dead terrorists? Did America give details of the assassination of Osama bin Laden? Swamy added, Why does Congress party lie on everything?, ANI quoted Swamy as saying. The former Madhya Pradesh Chief Minister, Singh, on Tuesday faced severe criticism for terming the Pulwama attack as an ‘accident’. On Saturday, Singh had urged the Modi government to present evidence of the air strike on terrorist camps in Pakistan, just the way the United States had done after killing Osama bin Laden in Pakistan’s Abbottabad in 2011.
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CHINA COMMERCE MINISTER SAYS US TRADE TALKS HAVE BEEN DIFFICULT

Chinese commerce minister Zhong Shan said on Tuesday that trade talks with the United States have been difficult but that working teams from both countries are continuing with their negotiations. The trade talks have achieved a breakthrough in some areas, Zhong said, adding that both China and the United States and the global economy stand to benefit if both countries can reach a trade deal. The United States and China appear close to a deal that would roll back U.S. tariffs on at least $200 billion worth of Chinese goods, as Beijing makes pledges on structural economic changes and eliminates retaliatory tariffs on US goods, a source briefed on negotiations said on Sunday.
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INTEL AGENCIES TRYING TO ASCERTAIN REPORTS ON MASOOD AZHAR'S DEATH: OFFICIALS

Intelligence agencies were trying to ascertain reports on the social media about the death of Jaish-e-Mohammed terror group chief Masood Azhar in Pakistan, officials said on Sunday. The officials said they had no information other than that Azhar was undergoing treatment at an army hospital after suffering renal failure. A resident of Bahawalpur in Pakistan's Punjab province, Azhar formed the Jaish-e-Mohammed in 2000. The social media was filled with reports that Azhar had died, but there was no confirmation as of now, the officials said.
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HIGH COURT UPHOLDS LIFE IMPRISONMENT FOR ACCUSED IN MANDAR SURLAKAR MURDER CASE

The Bombay High Court in Goa on Monday upheld the 2014 order of the Goa Children's Court of life imprisonment for four accused in the murder of teenager Mandar Surlakar in 2006. A Division Bench of Justices Prithviraj Chavan and M.S. Sonak, in their judgement, said the life imprisonment of the accused is upheld. The High Court bench, however, declined the plea of the victim's father Deepak Surlakar, to order the four accused to undergo life imprisonment for the remainder of their natural lives without any remission. The Court also upheld the Children’s Court's orders extending the benefit of Section 428 of CrPC for remission by the Executive authority, but by clarifying that the benefit of such set-off can be availed by the four only in the event the appropriate authority makes orders for remission or commutation.
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STRIKE HAPPENED IN PAKISTAN, BUT SOME SITTING IN INDIA HIT BY IT: PM MODI HITS OUT AT OPPOSITION

Prime Minister Narendra Modi on Tuesday unleashed a stinging attack on the opposition parties/ especially the Congress, for asking proof of the air strikes carried out by the Indian Air Force on Jaish terror camp in Balakot. Modi said the air strike happened in Pakistan, but some of those sitting in India were hit by it. PM Modi said India gave a befitting reply to the Pulwama attack by entering the den of terrorists in Pakistan. Modi said the opposition leaders are doing 'mahamilavat' (high adulteration) in Pakistan's favour. These 'mahamilavati' persons have become poster boys of Pakistan by terming it as an ambassador of peace. They are misleading people of the country and trying to demoralise our armed forces by asking for proofs of the IAF air strike, Modi said.
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PAKISTAN SC BARS PRIVATE CHANNELS FROM AIRING INDIAN FILMS, TV SHOWS

Pakistan's Supreme Court on Tuesday barred private channels from airing Indian films and television shows, amid escalating tensions between the two countries following the Pulwama terror attack. A three-member bench of the apex court, headed by Justice Gulzar Ahmad, heard the case pertaining to the telecast of Indian material on Pakistani channels. The hearing of the case has been adjourned for an indefinite period. Hussain also said that he has instructed the Pakistan Electronic Media Regulatory Authority (PEMRA) to crack down on made-in-India advertisements
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DAYS AFTER INDIA DOSSIER, PAKISTAN DETAINS TWO RELATIVES OF MASOOD AZHAR

Amid mounting pressure from the global community to rein in terror groups, Pakistan on Tuesday detained 44 members of proscribed organisations including two relatives of Jaish-e-Mohammad (JeM) chief Masood Azhar. Among those detained were Mufti Abdur Rauf and Hammad Azhar, brothers of the JeM chief, the Pakistan Interior Ministry said. The development comes two days after India handed over a dossier to Pakistan with specific details of JeM complicity in Pulwama terror attack and the presence of JeM terror camps and its leadership in Pakistan. New Delhi has also provided a list of infrastructure and patronage enjoyed by Masood Azhar, his family, and cadres of JeM. Shah Mahmood Qureshi had said that if India wished to initiate a dialogue based on the dossier, the government was willing to engage with them.
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PAK FINANCE SECRETARY WARNS OF SANCTIONS OVER FATF NON-COMPLIANCE

Pakistan must take strict measures including action against banned outfits by May, to avoid economic sanctions over the non-implementation of Financial Action Task Force (FATF) recommendations, the finance secretary has warned. Dawn reported that he said the country had to proceed against the banned outfits in the light of FATF recommendations. Khan expressed apprehensions that Pakistan might face economic sanctions if the FATF recommendations were ignored and not implemented. The finance secretary said Pakistan had to take strict measures to implement the FATF recommendations.
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‘VERY CLOSELY’ FOLLOWING REPORTS OF F-16 MISUSE BY PAKISTAN: U.S.

The United States is very closely following the reports which have claimed that Pakistan misused American-made F-16 fighter jets against India in the recent aerial confrontation between the air forces of the two countries, a top State Department official has said. The Indian Air Force on Thursday displayed parts of an AMRAAM beyond visual range air-to-air missile as evidence to conclusively prove that Pakistan deployed US-manufactured F-16 fighter jets during an aerial raid targeting Indian military installations in Kashmir after India’s anti-terror operation in Balakot. Pakistan has said that no F-16 fighter jets were used. The US State Department has said that America is seeking more information from Pakistan on the potential misuse of American-made F-16 fighter jets by it against India in violation of the end-user agreement. We’ve seen those reports and we’re following that issue very closely, US State Department Deputy Spokesperson Robert Palladino told reporters at his biweekly news conference on Tuesday. I can’t confirm anything, but as a matter of policy, we don’t publicly comment on the contents of bilateral agreements that we have in this regard involving US defence technologies nor the communications that we have with other countries about that. So, we’re taking a look and we’re going to continue to take a look. I’m going to leave it at that, Palladino said.
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PAKISTAN PLACES HAFIZ SAEED-LED JUD, FIF IN LIST OF 70 BANNED ORGANISATIONS

Mumbai terror attack mastermind Hafiz Saeed-led Jamaat-ud-Dawa & its wing Falah-e-Insaniat Foundation were formally placed in the list of banned organisations on Tuesday, a day after the Indian media reported that the two outfits continue to be only on the watchlist. According to Pakistan's National Counter Terrorism Authority (NCTA) list, which was updated on Tuesday, JuD and FIF were among 70 organisations proscribed by the Ministry of Interior under the Anti-Terrorism Act 1997. This list is updated as of 05th March, 2019 and prepared by NACTA based on the Notifications issued by Ministry of Interior, said a note at the bottom of the list. The development comes a day after Indian media reported that the two organisations continue to be only in the list of groups under watch.
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PAKISTAN INCITES TRIBALS IN KHYBER PAKHTUNKHWA TO FORM ANTI-INDIA MILITIA

The day IAF Wing Commander Abhinandan Varthaman was captured, Pakistani security officials began holding jirgas (meetings) with ethnic Pashtun leaders in Khyber Pakhtunkhwa (KPK), asking them to raise a tribal militia. The move is significant in view of the fact that Pakistan’s first attempt to invade Kashmir involved tribal militia. The tribal invaders, who committed massive atrocities in Kashmir, were resisted and repulsed by native Kashmiris under the leadership of Sheikh Mohammad Abdullah while New Delhi sent its forces after Hari Singh signed the instrument of accession with India. Since the first Indo-Pak war post-independence, the Pakistan Army has been propagating the view that Kashmir is the unfinished agenda of the Partition. When tensions along the Line of Control escalated with the dogfight between Indian and Pakistani fighter jets on February 27, officials from Pakistan’s paramilitary forces and the government held meetings with Pashtun elders in various parts of KPK province, including in the merged tribal areas formerly known as Federally Administered Tribal Areas (FATA).
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N.KOREA REBUILDS PART OF MISSILE SITE IT PROMISED TRUMP TO DISMANTLE

North Korea has restored part of a missile launch site it began to dismantle after pledging to do so in a first summit with U.S. President Donald Trump last year, South Korea's Yonhap News Agency and two U.S. think tanks reported on Tuesday. Yonhap quoted lawmakers briefed by South Korea's National Intelligence Service (NIS) as saying that the work was taking place at the Tongchang-ri launch site and involved replacing a roof and a door at the facility. Satellite images seen by 38 North, a Washington-based North Korea project, showed that structures on the launch pad had been rebuilt sometime between Feb. 16 and March 2, Jenny Town, managing editor at the project and an analyst at the Stimson Center think tank, told. The Center for Strategic and International Studies released a report, also citing satellite imagery, that concluded North Korea is pursuing a rapid rebuilding at the site. Activity is evident at the vertical engine test stand and the launch pad's rail-mounted rocket transfer structure, the CSIS report said. Significantly, the environmental shelters on the umbilical tower, which are normally closed, have been opened to show the launch pad.
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US REVISES VISA POLICY FOR PAKISTANIS

The US has changed its visa policy in different categories for Pakistanis. An official notification announcing revision of the visa policy rules was issued by the US Consulate in Islamabad on Tuesday. Work and missionary visas have been reduced from five years to one year, the visa limit for journalists has been reduced from five years to three months. The Consulate's notification mentioned that visas for trade, tourism and students will remain valid for a period of five years. Pakistan also issues visas for three months to journalists.
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INDIA-ORIGIN EX-CISCO EMPLOYEE ARRESTED IN US, CHARGED WITH $9.3 MN FRAUD

An Indian-origin former employee of Cisco Systems has been arrested and charged with a criminal complaint alleging he defrauded a technology major of more than $9.3 million. Prithviraj Bhikha, 50 was charged in a criminal complaint with wire fraud, US Attorney David Anderson and Federal Bureau of Investigation Special Agent in Charge John Bennett have said. The criminal complaint was unsealed Monday following Bhikha's arrest on March 1 at the San Francisco International Airport. Bhikha made his initial appearance Monday morning in federal court before US Magistrate Judge Joseph Spero and has been released on a $3 million bond. His next court appearance is scheduled for March 18 for arraignment. If convicted on the charge in the criminal complaint, he faces a maximum sentence of 20 years' imprisonment, and a fine of $250,000 along with restitution.
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TO REMAIN VIGILANT UNDER TRADE PROTECTIVE REGIME

Trade protectionism has a number of implications for the world economy It saves the domestic industry from the onslaught of cheap imports and therefore prevents closure and loss of employment, but also presses the alarm for exporters and downfall of the export oriented industries with adverse consequences to specific economies. The panic reaction is reflected in searching for alternate outlets and ultimately to adopt practices that violate the rules of free and fair trade. President Trump’s unilateral actions on duty impositions of 25% on steel and 10% on aluminium on all imports to USA in March 2018 establish firmly this premise. US industrial production growth currently stands at 3.8%, the manufacturing productivity has gone up, unemployment rate comes down to 4.0% and current balance of trade stands at (-) 2.4% of GDP. All this is translated into a GDP growth of 2.9% in 2018 and rising since then. The latest IMF projection on GDP growth has put US economy to grow by 2.5% in 2019. It is to be revised upwards surely. The realpolitik of twenty first century has taught USA to combine trade protectionism with looking after the interest of domestic end user segments of steel and aluminium products and hence around 16,000 numbers of exemptions out of the trade measure (for 330 companies involving 3.85 MT of steel imports) have been given to these user industries on case to case basis so that their cost of production/servicing does not go up due to rise in import costs. Politically this move has eliminated domestic opposition to the trade measures and enhanced the support of the ailing steel and aluminium industries in USA. US trade measures of Section 232 of US Trade Expansion Act under the garb of disrupting the National Security of the country and the follow-up action by EU to impose a definitive safeguard measure on the exporters of steel to Europe based on 70% of the average export volume in the last 3 years (2015-17) and increasing it by 5% in each of the next 3 years. The trade actions by these two major importing centres has created a huge uncertainty among the major steel exporters like China, Japan, South Korea, Turkey and CIS countries. Quite expectedly the knee jerking actions by steel exporters are currently undertaken with least care to play within the norms and standards of fair trade. India’s steel imports during the first 10 months of the current fiscal have gone up by 2.1% compared to last year. The three major countries, Japan and South Korea and China, most affected by US and EU trade measures, together accounts for 67% share of total imports during the period which marginally exceeds the last year’s level. Some of these imports in HRC, TMT, coated products are taking place despite India having abundant capacities to cater to the demand.




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Thanks & Regards,
CS Meetesh Shiroya

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