Friday, 8 March 2019

TAXATION UPDATES 09.03.2019





TOTAL GOVERNMENT LIABILITIES RISE TO RS 83.4 LAKH CRORE IN Q3: FINANCE MINISTRY REPORT

Total liabilities of the government increased to Rs 83.40 lakh crore at the end of the December 2018 quarter from Rs 82.03 lakh crore in the previous quarter of the current fiscal, latest data on public debt showed Friday. Public debt accounted for 89.5 per cent of total outstanding liabilities at the end of December 2018 with internal debt accounting for 83.3 per cent share. Nearly 29.27 per cent of the outstanding dated securities had a residual maturity of less than five years. The holding pattern indicates a share of 40.5 per cent for commercial banks and 24.6 per cent for insurance companies by end-December 2018. G-Sec yields have shown a softening trend in third quarter of the fiscal with the decrease in weighted average yield of primary issuances to 7.82 per cent from 8.01 per cent in the last quarter, reflecting several developments such as strengthening in the value of the rupee against the dollar and the RBI injecting durable liquidity in the system through OMO (purchase), said the quarterly Report on Debt Management, released by the finance ministry. During the October-December 2018 period, the central government issued dated securities worth Rs 1.27 lakh crore as against Rs 1.64 lakh crore in the year-ago period. The temporary cash flow mismatches were bridged through issuances of cash management bills amounting to Rs 45,000 crore during the quarter.
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GOVERNMENT EXPECTS FURTHER FALL IN GST REVENUES, STRUGGLES ON DIRECT TAX MOP-UP

Government revenue will be under pressure in the current fiscal year with a senior finance ministry official on Friday suggesting that there could be a further fall in GST revenue while the direct tax numbers may just be about near the revised target. But the official also said there would be some savings on capital expenditure side that could help bridge the gap. He, however, did not give the details on the quantum of savings and also didn't clarify if these savings would come from a cut in the capital expenditure. Some of the revenue expenditures such as interest payment obligations and subsidy have already been rolled over to the next fiscal to keep fiscal deficit under check in view of falling tax revenues. We will probably do direct taxes as per revised estimates, but on indirect taxes, there might be some shortfall further in the revised estimates, said Subhash Chandra Garg. But the fiscal deficit figure of 3.4 per cent would be met as there would be some savings on the expenditure sides as well, Garg said. The direct tax target was revised upwards to Rs 12 lakh crore for 2018-19 fiscal while for GST, the target was further lowered for the current fiscal. The government had budgeted to collect over Rs 7.43 lakh crore from Goods and Services Tax (GST) in the current fiscal ending March. However, in the revised estimates, the revenue mop-up has been pegged at over Rs 6.43 lakh crore.
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5 FIRM OWNERS BOOKED FOR RS 19-CR GST FRAUD

After detecting tax evasion and taking the input tax credit, the state Excise and Taxation Department has identified five shell firms that perpetrated the fraud under the Goods and Services Tax (GST) by cheating the department of Rs18.97 crore in Hisar district. A spokesperson for the department said the police had registered five criminal cases against the traders who floated shell firms to deal in cotton. These traders forged the documents by preparing fake invoices and receipts which were used in claiming the ITC from the government under the GST norms. They had been booked under Sections 406 (criminal breach of trust), 420 (fraud), 467 (forgery of valuable security, will, etc), 468 (forgery for purpose of cheating), 471 (using forged documents or electronic records as genuine) and 120 B (criminal conspiracy) of the IPC. In his complaint, Excise and Taxation Officer Mahavir Godara said during the site verification of these firms at the given addresses, no such establishments found existing The CGST team had arrested four persons from Sirsa for allegedly forging documents to float bogus firms to sell cotton without paying the GST.
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SUBHASH CHANDRA GARG DESIGNATED AS FINANCE SECRETARY

Subhash Chandra Garg was on Friday designated as the Finance Secretary according to a Personnel Ministry order. The Appointments Committee of the Cabinet headed by Prime Minister Narendra Modi has approved designating Garg as the Finance Secretary, it said. 58-year-old Garg, a 1983 batch IAS officer of Rajasthan cadre, has been working as the Secretary in Department of Economic Affairs since June 2017.
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GUJARAT: 12% REBATE FOR ONLINE TAX PAYMENT

The Ahmedabad Municipal Corporation on Thursday has announced a tax rebate up to 12% to those paying tax in advance The standing committee chairman informed that the rebate scheme will be implemented for one month. We have announced a rebate scheme for the taxpayers. For those paying their property tax in advance will get a 10% discount and those making online transaction will get an additional 2% benefit, said Amul Bhatt. The scheme will be implemented from April 1, 2019. The civic body made the announcement a month advance keeping in mind the general election. Once the code of conduct will be implemented, no such announcement could be made. In the current financial year, 1,35,301 people paid tax online which amounts to Rs 96.83 crore. Of which 7,585 people used mobile application and 18,776 people paid via cards.
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INDIA’S SUPER-RICH APPEAR TO BE GIVING UP ON GIVING BACK

Ultra-high net worth individuals (UHNWIs), or those with a net worth of more than $50 million, in India, other than Wipro Ltd founder Azim Premji, are giving less than they did five years ago. However, the number of UHNWI households has grown by 12% in this period, going by the findings of Bain and Co.’s India Philanthropy Report 2019. Individual donations have been on the rise in India but the amounts are not large enough. Contributions of 10 crore or more constitute about 55% of individual philanthropy, but Premjis donations made through Azim Premji Philanthropic Initiatives Pvt. Ltd account for more than 80% of this. Excluding donations by Premji, such donations have declined by 4% in India since 2014, according to the report. The social sector in India depends on funding from the government, private individuals, corporate houses and foreign sources. The government is the largest contributor to social sector funding, though private philanthropy is growing at a faster pace of 15% every year from 2014, compared to the government’s 10%. Foreign sources were hit in 2018 because of increased Foreign Contribution (Regulation) Act rules. Public infrastructure funding in sectors like education and health is woefully low, so UHNWIs must lead the way. In India, if you look at the rate at which net worth and gross domestic product are rising, giving by the top 800 families has not kept pace, said Anant Bhagwati. This is particularly problematic, given that UHNWI households have grown at 12% over the past five years and are expected to double in both volume and wealth from 160,600 households with 153,000 crore combined net worth in 2017, to 330,400 households with 352,000 crore combined net worth in 2022, the report says. Most Indian UHNWIs—and a vast majority of them inherit their wealth—prefer to leave their money to family. In developed countries, billionaires tend to give away more of their wealth, in part because of tax regimes that favour philanthropy and the existence of social sector organizations that can run large projects, which have measurable impact. India has pledged to meet the United Nations’ 17 Sustainable Development Goals (SDGs) by 2030. Bain estimates suggest that India needs about 26 trillion in annual funding to fulfil even five of the SDGs by 2030. Even in the most optimistic scenario—in which India sustains its current economic growth rate and its current funding growth rate, all philanthropic capital is channelled towards the SDGs, there is no leakage in deployment, and the funding required to meet the SDGs doesn’t increase—the nation will still face an annual funding gap of around 4.2 trillion. Depending on how each of these factors evolves, the actual shortfall could be 2-4 times that amount, the report said.
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RAFALE DOCUMENTS NOT STOLEN, PETITIONERS USED PHOTOCOPIES: ATTORNEY GENERAL

Attorney General K K Venugopal Friday claimed the Rafale documents were not stolen from the Defence Ministry and that what he meant in his submission before the Supreme Court was that petitioners in the application used photocopies of the original papers, deemed secret by the government. His comments in the apex court on Wednesday that Rafale fighter jet deal documents were stolen caused a political row, with Rahul Gandhi targeting the government over stealing of such sensitive papers and seeking a criminal investigation. I am told that the opposition has alleged what was argued (in SC) was that files had been stolen from the Defence Ministry. This is wholly incorrect. The statement that files have been stolen is wholly incorrect, he told, in an apparent damage-control exercise. Official sources said the AG's use of word stolen was probably stronger and could have been avoided. The government had also warned The Hindu newspapers with a case under Official Secrets Act for publishing articles based on these documents.
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AMAZON KEY SELLER CLOUDTAIL FOUND GUILTY OF PROFITEERING

The National Anti-profiteering Authority has found the online seller Cloudtail– partly owned by Amazon Asia – guilty of profiteering to the tune of Rs 10.8 lakh through sale of printer cartridges at a higher base price after Goods and Services Tax (GST) rates were reduced in November, 2017. This neutralised the benefit that should have accrued to consumers, the order said, and asked the company to deposit the profiteered amount to the consumer welfare fund with 18% interest. Cloudtail said it was a retailer selling products manufactured by other vendors, and argued that it had no control over the maximum retail price (MRP) affixed by the manufacturer or importer. In the present case, we are concerned with the supplier, which has increased the price even after reduction in GST tax rate. The passing of the benefit by the distributor or retailer does not rest on the fact that the manufacturer or his supplier should have passed on the same benefit to him first, NAA said. Further, the order said that Cloudtail not only increased the base price but also charged GST on the increased base price. The move followed a direction from NAA, which received a clutch of complaints about the e-commerce firms allegedly not passing on the benefit of tax rate cuts to the buyers, after the GST Council lowered the tax for over 220 items on November 15 last year. In a particular case related to e-commerce company Flipkart last year, the company had informed NAA that there were 7,254 cases in which the GST rates, at the time of booking the orders on the platform, was higher than those prevalent at the time of delivery. In all these cases, the e-commerce firm said, it had initiated the refund process as per the instructions from the sellers.
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ENGINEERING EXPORTS SET TO TOUCH $80 BILLION IN FY19

Engineering exports is set to touch an all-time high of $80 billion during the current fiscal, said a top official of EEPC India. Last fiscal (2017-18), we exported goods worth $76.2 billion, which was a three-year high, said Mahesh K. Desai. We did exports of $70.7 billion in 2014-15. This fiscal, it is expected to touch $80 billion. During fiscal 2017-18, India exported merchandise goods valued at $302.8 billion of which engineering goods accounted for $76.2 billion, said Chandrashekhar H. Nadiger. Mr. Desai said that EEPC had been working on Industry 4.0 for the last two years for helping small and medium enterprises to equip themselves and overcome the challenges in terms of upgrading the technology. Industry 4.0 was on the top of our agenda. Tamil Nadu was at the forefront of it. Mentioning that southern region accounted for 22% of the country’s total exports, Mr. Nadiger said Tamil Nadu led the chart, followed by Karnataka, Andhra Pradesh and Telangana. According to him, engineering exports from southern region for 2017-18 stood at $17 billion of which Tamil Nadu accounted for $11 billion. This year too, the growth pattern would be similar. This is due to higher technology intervention adopted by the local industries, he said.
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ENFORCEMENT DIRECTORATE INVESTIGATING PHILIP MORRIS, GODFREY PHILLIPS: SOURCE

India's main financial crime-fighting agency is investigating Philip Morris International Inc and its Indian partner Godfrey Phillips for alleged violation of laws in India, a senior directorate source told. Philip Morris has for years paid manufacturing costs to Godfrey Phillips to make its Marlboro cigarettes, circumventing a nine-year-old government ban on foreign direct investment in the industry, Reuters reported based on a review of dozens of internal company documents, which were dated between May 2009 and January 2018. Three former officials and one former head of the Enforcement Directorate had reviewed the Philip Morris documents for Reuters and said the dealings should be investigated for circumventing India's foreign investment rules. The Enforcement Directorate has been looking into both the companies and the scope of the investigation is much broader than the alleged foreign investment law violations highlighted the source said. Both companies are being looked into, said the source, who eclined to be named citing sensitivity of the investigation.
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GOVERNMENT APPOINTS FIVE SPS IN CBI

The government on Friday appointed five superintendents of police in the Central Bureau of Investigation (CBI), according to a Personnel Ministry order. Of these five officers, three -- Sudha Singh, Thomson Jose and Jayadevan A -- are from the Indian Police Service (IPS), it said. The two other officers belong to the Indian Revenue Service. All these officers have been appointed as SP for four years, it said.
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PRESS STATEMENT

On the official visit to India, General Raymond Thomas, Commander US Special Operations Command, US Army, called on the Army Chief General Bipin Rawat. Both the Generals deliberated on the developing regional security environment, issue of global terrorism and Pakistan's continued support to terrorism was also discussed. Acknowledging India's role in peace and stability in the region, Gen Raymond emphasised on the need for further military cooperation in the field of technology and military to military exchanges between the two countries. In the current scenario, Indian Army remains fully prepared for emerging challenges. In the last three weeks, disinformation campaign by the adversary on digital media has increased. All ranks have been well sensitised of these disinformation campaigns and all ranks can see through the lie, deceit & deception of the terror sponsors.
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P CHIDAMBARAM, SON'S INTERIM PROTECTION FROM ARREST EXTENDED TILL MARCH 25

A Delhi court Friday extended till March 25 the interim protection from arrest granted to former Union minister P Chidambaram and his son Karti in the Aircel-Maxis scam cases filed by the CBI and the ED. During the hearing senior advocates Kapil Sibal and A M Sinhgvi, appearing for the father-son duo, opposed the adjournment sought by the agencies, saying a lot of time has been spent since filing of the applications.
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CAUGHT IN MUMBAI: 30 KG DRIED SEAHORSE MEANT FOR CHINESE MEDICINE BEING SMUGGLED TO MALAYSIA

Maharashtra State Mangrove Cell has arrested a 49-year old man during the wee hours of Thursday morning for smuggling 30 kg of dried Seahorse — a species protected under Schedule I of the Wildlife Protection Act 1972. The man was first detained by the custom officials at the Mumbai International airport on Wednesday while he was on his way to board a Mumbai-Kuala Lumpur flight. As per experts, seahorses are mostly collected from the coastal region of Southern India and are illegally smuggled to countries like Malaysia, Thailand, Singapore where dried seahorses are used for making traditional Chinese medicines including aphrodisiac. Their smuggling commands a good but not fixed price tag. Makarand Ghodke, Mangrove Cell informed that it was during the bag scanning at the airport the CISF staff found the suspicious looking item, which was packed and then plastic wrapped in the bag belonging to the accused and alerted the Customs.
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OVER 40 PAKISTAN NATIONALS GET INDIA CITIZENSHIP

Pune district collector on Thursday gave Indian citizenship to over 40 Pakistani nationals staying in Pune for long. Pune Collector Naval Kishore Ram said, A total of 45 nationals from Pakistan, Afghanistan and Bangladesh have been given Indian citizenship. Most of them are Pakistani nationals. According to officials, most of these applicants were from Sindhi community who had migrated to India but did not have citizenship. One of the applicants had come to India from Pakistan when he was only 40 days old and now he has spent 40 years in India but did not have the citizenship of the country.
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IAF PILOTS WERE ON TARGETED MISSION TO DESTROY TERROR FACILITY IN PAKISTAN, NOT TO SHOWER PETALS: RAJNATH

Union Home Minister Rajnath Singh said on Friday that the IAF pilots were on a targeted mission to destroy terrorist facility in Pakistan and did not go on any pleasure trip or to shower petals. He said Pakistan's desperation after the air strike in Balakot was reasonable, but it is sad that a few people in India are in a shock and asking for proof of its success. IAF pilots had targeted terrorist facility based on credible intelligence input to destroy them. The pilots had not entered Pakistan for any pleasure trip or to shower petals, Singh told. IAF pilots have made Pakistan realise that it would have to pay a heavy price if the terrorists operate from its land, the senior BJP leader said. Warriors don't count people killed in war. But the Congress and its friends have a misleading and dangerous stance. They give respect to terrorists such as Osama Bin Laden and Hafiz Saeed by calling them Osama Ji and Hafiz Ji, Singh said. He said that such people do not have clear policy and intention on terrorism. All political parties should stand united to tackle terrorism. Our army jawans have achieved victory by eliminating terrorists on foreign land thrice in the past five years, Singh said. On the issue of Kashmiris, Singh said the people of Jammu and Kashmir are and will always be with the country and Kashmiri students studying anywhere in the country will be protected.
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PAKISTAN REGISTERS FIR AGAINST IAF PILOTS FOR BOMBING TREES: REPORT

Pakistan on Friday registered a First Information Report against unidentified pilots of the Indian Air Force (IAF) for bombing and destroying 19 trees in the Balakot area, according to a media report. The FIR was filed by the forestry department on Friday against pilots of the IAF for bombing and destroying trees in the Balakot area. The FIR, registered against unidentified IAF pilots, also details the damage suffered by 19 trees after the Indian fighter jets hastily dropped their payload, it says. Pakistan also plans to lodge a complaint against India at the United Nations, accusing New Delhi of eco-terrorism.
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TAKE 'SUSTAINED AND IRREVERSIBLE' ACTIONS AGAINST TERRORISTS: US TELLS PAKISTAN

Stepping up pressure on Pakistan, the US has asked Islamabad to take sustained and irreversible actions against terrorist groups operating from its territory to prevent future attacks and promote regional stability. The State Department statement came as Pakistan, under global pressure after the Pulwama terror attack and India's air strikes against Jaish-e-Mohammed (JeM) terrorist camp in Balakot in Khyber Pakhtunkhwa province on February 26, started taking actions against some of the terrorist outfits and their leaders over the past few days. In Islamabad, the Interior Ministry on Thursday announced that a total of 121 members of the proscribed groups have so far been taken into preventive detention across Pakistan. State Department Deputy Spokesperson Robert Palladino told reporters at his biweekly news conference on Thursday, I would say that we, the United States notes these steps and we continue to urge Pakistan to take sustained, irreversible actions against terrorist groups that will prevent future attacks and promote regional stability. Our views on Masood Azhar and Jaish-e-Mohammed are well-known. Jaish-e-Mohammed is a United Nations-designated terrorist group that has been responsible for numerous terrorist attacks and is a threat to regional stability. Masood Azhar is the founder and leader of JEM, Palladino said. But we will continue to work with the sanctions committee to ensure that the list is updated and that it is accurate, Palladino said.
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PAKISTAN NEVER SERIOUSLY CRACKED DOWN ON TERRORIST GROUPS THAT ATTACK INDIA: NEW YORK TIMES

Pakistan has never seriously cracked down on militant groups that attack India, a leading US daily has said, warning that the threat of nuclear war between the two nations remains as a long-term solution to the conflict is unlikely without international pressure. The New York Times in an Op-ed titled 'This Is Where a Nuclear Exchange Is Most Likely. (It's Not North Korea.)' said the current focus on North Korea's growing arsenal obscures the fact that the most likely trigger for a nuclear exchange could be the conflict between India and Pakistan. The paper said the relative calm after last week's confrontation between the two nations is not a solution. As long as India and Pakistan refuse to deal with their core dispute — the future of Kashmir — they face unpredictable, possibly terrifying, consequences, it said. The next confrontation might not end so calmly, the paper said. Without international pressure, a long-term solution is unlikely, and the threat of nuclear war remains.
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PAKISTAN CONTINUES BLOCKING MEDIA ACCESS TO IAF'S AIR STRIKE SITE

Pakistani security officials on Thursday prevented a Reuters team from climbing a hill in northeastern Pakistan to the site of a madrasa and a group of surrounding buildings that was targeted by Indian warplanes last week. It is the third time in the past nine days that Reuters reporters have visited the area – and each time the path up to what villagers say was a religious school run at one time by militant group Jaish-e-Mohammed (JeM) and what the Indian government says was a terrorist training camp - was blocked. The Pakistani security officials guarding the way to the site cited security concerns for denying access. The building that reporters could see was surrounded by undamaged pine trees, and did not show any signs of damage or activity but given the view, the assessment is very limited.
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PETITION LAUNCHED ON WHITE HOUSE WEBSITE TO SAVE H-1B SPOUSE WORK PERMITS

As the proposal to rescind the H-4 spousal work authorisation regulation inches closer to reality, the immigrant community, especially of Indian origin, is leaving no stone unturned to help ensure continuity of the Obama-era programme. One of the many efforts is a petition launched on the White House website requesting the US government not to revoke the H-4 EAD (employment authorisation document) programme. By 5 pm on March 7, the petition had received 43,332 signatures. Under the norms, if one lakh signatures are received within one month of the launch of a petition, the White House gives an official response within the next 60 days.
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CHINA TO HOST 2ND BRI MEET NEXT MONTH: WANG YI

China will host a second global meeting on its ambitious Belt and Road Initiative (BRI) next month, which Foreign Minister Wang Yi said would be much bigger that the first. The number of heads of state and government expected to attend the next month's meeting will be much more than that of the first Belt and Road Forum (BRF), Wang told. It will be a much bigger event with thousands of delegates from over 100 countries expected to attend, he said. The BRI includes USD 60-billion China-Pakistan Economic Corridor which India opposes as it traverses through the Pakistan-occupied Kashmir. The US, India and several other countries have raised concerns over the BRI as China doled out huge loans to smaller countries for infrastructure projects without taking into consideration their ability to pay back the money. India boycotted the first BRF meet held in 2017, which was attended by 29 heads of state and government, the UN Secretary General and heads of World Bank and IMF and a host of officials from different parts of the world.
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EX-TRUMP CAMPAIGN BOSS MANAFORT SENTENCED TO 47 MONTHS

Former Trump campaign chairman Paul Manafort was sentenced on Thursday to nearly four years in prison for tax and bank fraud related to his work advising Ukrainian politicians, much less than what was called for under sentencing guidelines. Manafort, sitting in a wheelchair as he deals with complications from gout, had no visible reaction as he heard the 47-month sentence. While that was the longest sentence to date to come from special counsel Robert Mueller’s probe, it could have been much worse for Manafort. Sentencing guidelines called for a 20-year-term, effectively a lifetime sentence for the 69-year-old. Manafort has been jailed since June, so he will receive credit for the nine months he has already served. He still faces the possibility of additional time from his sentencing in a separate case in the District of Columbia, where he pleaded guilty to charges related to illegal lobbying. Before Judge T.S. Ellis III imposed the sentence, Manafort told him that saying I feel humiliated and ashamed would be a gross understatement. But he offered no explicit apology, something Judge Ellis noted before issuing his sentence. Manafort steered Donald Trump’s election efforts during crucial months of the 2016 campaign as Russia sought to meddle in the election through hacking of Democratic email accounts. He was among the first of Mr. Trump associates charged in the Mueller investigation and has been a high-profile defendant. But the charges against Manafort were unrelated to his work on the campaign or the focus of Mr. Mueller’s investigation- whether the Trump campaign coordinated with Russians. A jury last year convicted Manafort on eight counts, concluding that he hid from the IRS millions of dollars he earned from his work in Ukraine. Manafort’s lawyers argued that their client had engaged in what amounted to a routine tax evasion case, and cited numerous past sentences in which defendants had hidden millions from the IRS and served less than a year in prison. Outside court, Manafort’s lawyer, Kevin Downing, said his client accepted responsibility for his conduct and there was absolutely no evidence that Mr. Manafort was involved in any collusion with the government of Russia.
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U.S. ENVOY FOR RELIGIOUS FREEDOM SLAMS CHINA DURING HONG KONG VISIT

The U.S. ambassador for religious freedom, Sam Brownback, on Friday called on Beijing to end religious persecution in China, while requesting a visit to the country's mass internment camps in the western region of Xinjiang. Brownback said Beijing was waging a war with faith and that it needed to respect the fundamental and sacred right of people to worship. It is a war they will not win, he told an audience at the Hong Kong Foreign Correspondents' Club. The Chinese Communist Party must hear the cries of its own people for religious freedom and act to correct its wrongs. Brownback spoke of rights violations including torture, political indoctrination and forced labour. The camps reportedly hold more than a million ethnic Uighurs and people from other Muslim minorities, The Trump administration is deeply concerned and considers this oppression a deliberate attempt by Beijing to redefine and control members of these Muslim minority groups' identity, culture and faith. We don't discuss internal matters about what's being discussed about possible actions in any place around the world, the same for Xinjiang.




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