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Current Affairs - 1 July 2017

General Affairs 

China Seeks 'Meaningful Dialogue' With India Over Border Row In Sikkim Sector
  • China today sought a "meaningful dialogue" with India over the border row in the Sikkim sector and asked it to withdraw its troops from Doklam, claiming that Beijing has "indisputable sovereignty" over the area.

    "Diplomatic channels are unimpeded between India and China for talks on the standoff in Sikkim," Chinese Foreign Ministry spokesman Lu Kang said.

    "The pressing issue is to have a meaningful dialogue for the withdrawal of Indian troops from the Doklam area in Sikkim sector," he said.

    A standoff erupted between the two militaries after the Indian Army blocked construction of the road by China in Doklam, a disputed territory between China and Bhutan also known as Donglong.

    Of the 3,488-km-long India-China border from Jammu and Kashmir to Arunachal Pradesh, a 220-km section falls in Sikkim.

    Mr Lu also refuted Bhutan's allegation that China violated agreements by constructing a road inside its territory.

    In a strongly worded statement, Bhutan had also asked China to stop constructing the motorable road from Dokola in the Doklam area towards the Bhutan Army camp at Zompelri which it says affects the process of demarcating the boundary between the two countries.

Shiv Sena Hits Out At BJP On Decision To Privatise Air India
  • BJP ally Shiv Sena today came down heavily on the centre over its decision to privatise national carrier Air India, saying had such a decision been taken by the previous Congress-led UPA government, the BJP would not have spared it.

    It also asked the finance minister to spell out the reasons which made the 'Maharaja' (Air India's logo) a "beggar." The Sena's taunt comes two days after Finance Minister Arun Jaitley said the cabinet has given "in-principle" approval for the disinvestment of Air India.

    The Civil Aviation Ministry is charting out the disinvestment of the debt-laden carrier.

    "Had this decision been taken by the previous government, the BJP would have exposed the Congress in public. The BJP would have asked how can a government that cannot run an airline, run the nation," the Sena claimed in an editorial in party mouthpiece 'Saamana'. "But the BJP today has indulged in the sale of the national carrier," it noted.

    The Sena also sought to know from Mr Jaitley the reasons for Air India's downfall and losses in the last few years, and those responsible for it.

    The airline earlier had a local market share of about 35 per cent which has gone down to a mere 16 per cent. This happened as many routes were sold off to private companies by the Civil Aviation Ministry, the Sena claimed.

    "Today the airline is being sold off as it has a debt of Rs. 50,000 crore...They (the government) cannot be trusted," the Sena claimed.

    Surviving on taxpayers' money, Air India has been in the red for long and various proposals, including government think-tank NITI Aayog's suggestion for complete privatisation, have been made.

    The airline has a debt of more than Rs. 52,000 crore and is surviving on a Rs. 30,000-crore bailout package extended by the previous UPA government in 2012.

Kailash Mansarovar Yatra Through Nathu La In Sikkim Cancelled: Official
  • The Kailash Mansarovar yatra through Nathu La in Sikkim has been cancelled, an official said today. The decision comes in the wake of a face-off between Indian and Chinese troops along the Sino-Indian border.

    The move comes as a disappointment to the 400 devotees who were hoping to go for the pilgrimage to lake Mansarovar and Mount Kailash, believed to be the abode of Lord Shiva, following an arduous trek along the Nathu La route.

    Though the yatra through Nathu La in Sikkim will not take place this year, pilgrims travelling through the Lipulekh Pass in Uttarakhand will continue as scheduled, the government official said.

    Eight batches, each comprising around 50 pilgrims, were scheduled to have taken the Nathu La route to Mansarovar in present-day Tibet. The first batch was to have crossed over to Tibet through Nathu La on June 20 and the last batch on July 31. It would have taken a batch 21 days to complete the pilgrimage.

    China had issued visas for first two batches and applications for the other pilgrims were put on hold because of the tension along the border. The first batch of Kailash Mansarovar pilgrims had to return from the Nathu La border post as the stand-off between India and China showed no signs of easing.

    The pilgrims returned to Gangtok on June 23 after staying in Nathu La for three days awaiting permission from the Chinese side for the onward journey.

    The second batch of pilgrims did not move from Gangtok and was eventually told to return home. The Sikkim route to Mansarovar was thrown open to the public in 2015.

    The pilgrimage to Kailash Mansarovar, located at an altitude of 15,160 feet, takes place from June to September each year through the two routes.

    The Kailash Mansarovar yatra is considered holy by Hindus, Buddhists and Jains and is undertaken by hundreds of pilgrims every year.

Madhya Pradesh Traders On Strike Ahead Of GST Rollout
  • Traders in Madhya Pradesh on Friday observed a shutdown against some provisions of the Goods and Services Tax (GST) rollout.

    Markets across the state wore a deserted look. The supply of milk, vegetables and essential supplies were not affected by the strike. The GST rollout will take place in Parliament at Friday midnight.

    Bhopal Chambers of Commerce President Lalit Jain said groceries, textile and pharmaceutical traders have supported the shutdown.

    The traders said they were not against the GST rollout per se but were opposed to seven provisions in it which they fear might put them into trouble. These include the three returns they will be expected to file every year under the new tax regime.

Invitation Stands, Says Government To Opposition Parties Boycotting GST Launch
  • Hours before the mega launch of the country's biggest tax reform the Good and Services Tax (GST) the government said on Friday morning that it hopes opposition parties will reconsider their decision to boycott the event in Parliament's Central Hall.

    "It is unfortunate because they are distancing themselves from a process of reformation. I hope they will realise it by the evening a rethink and join us in the Centre Hall," said union Minister M Venkaiah Naidu, also thanking "all political parties who have been instrumental and for supporting GST".

    Mr Naidu said fears of under-preparedness for the massive shift to a new taxation system tomorrow were unfounded. "In any transformation there will be initial hiccups and problems but they are not unsolvable. The GST council is dynamic and will address the problems from time to time."

    Prime Minister Narendra Modi, the minister said, "is a man of ideas and transformation", and assured that, "Nobody needs to worry, only those who have the habit of evading taxes need to worry."

    PM will launch GST tonight in the presence of President Pranab Mukherjee.  

    The Congress and several other opposition parties have said they will skip the event, arguing that protests this week by textile traders show that small traders and others are not ready for GST. The "unnecessary hurry to roll out GST is another epic blunder of the centre," said West Bengal Chief Minister Mamata Banerjee in a Facebook post, the first to announce a boycott.

    The Congress has said it will "not be party to such a tamasha (drama), publicity gimmick," recalling that when in power at the centre it brought in many big reforms without organising such celebrations. The party has also objected to a midnight session in Parliament's Central Hall being used for the event, pointing that such events have been only been used to celebrate India's independence in the past.

    Mr Naidu seemed to address that when he said this morning, "Earlier, we had political freedom, now we will have economic freedom... It's historic because earlier we had national integration, today we will have economic integration."   

    Parliament's central hall has been fitted with new carpets and a new sound system for today's event, which about 1,000 people are expected to attend, including top political leaders and celebrities like actor Amitabh Bachchan, singer Lata Mangeshkar and industrialist Ratan Tata.

Business Affairs

GST Launched: GST means Good and Simple Tax, says PM Modi
  • 00:00 am:  PM Narendra Modi, President Pranab Mukherjee and Finance Minister Arun Jaitley ring in the Goods and Service Tax (GST)
    11:45 pm: GST will help promote exports
    11:44 pm: PM Modi compares GST's cooperative federalism to Indian Railways
    11:43 pm: GST means Good and Simple Tax
    11:40 pm: GST will end tax terrorism 
    11:38 pm: GST to help curb black money, reward honesty, says PM Modi 
    11:28 pm: Best brains of the country have worked for the creation of the GST: PM Narendra Modi
    11:26 pm: GST is the result of a long thought out process: PM Narendra Modi 
    11:25 pm: We are ushering in a new change today. We are setting India's roadmap, says PM Narendra Modi
    11:20 pm: PM Narendra Modi addresses GST session 
    11.10 pm: It will be an India that will write a new destiny. India can rise beyond narrow politics: Arun Jaitley
    11.08 pm: The new India will create one tax for one market for one nation, says Arun Jaitley
    11.05 pm:  Finance Minister Arun Jaitley begins his speech before the GST launch
    10.54 pm: PM Narendra Modi arrives in Parliament for special midnight session on GST.
    10.34 pm: Ratan Tata arrives in Parliament for the midnight GST launch. 
    India's biggest tax reform, the Goods and Services Tax (GST), will be launched in the Central Hall of the Parliament.
    The midnight launch will take place in the presence of President Pranab Mukherjee, Prime Minister Narendra Modi, finance minister Arun Jaitley. The launch event began at 11 pm.
    Bollywood star Amitabh Bachchan,  who is also government's brand ambassador for GST will attend the launch. Veteran industrialist Ratan Tata will also be in attendance during the GST rollout.
    Meanwhile, the Congress and the Left parties have said they will skip the launch event.
    9.30 pm: As the Goods and Services Tax (GST) regime will subsume various indirect taxes from today midnight, there would be a reorganisation of existing Service Tax and Central Excise departments in Mumbai.
    There will be 21 commissionerates in the GST Mumbai zone, pared down from the existing 27 under the Service Tax and Central Excise departments.
    "From July 1, 27 commissionerates of these two departments will be reduced to 21," said the principal chief commissioner of GST Mumbai zone, Subhash Varshney.
    "GST Mumbai zone will now be divided into 11 commissionerates. Besides, there will be five appeal commissionerates and five audit commissionerates, taking the total number to 21," he said.
    The Central Excise building near Churchgate in south Mumbai will now be named as GST Bhawan. It will be the zonal headquarters. 
    8.15 pm: GST Council today decided to reduce GST rate on fertilizers from 12% to 5% & on exclusive parts of tractors from 28% to 18%

    8.10 pm: 
    Effective GST rate on under-construction real estate at 12%
    The effective GST rate on under-construction real estate projects will be 12 per cent only and not 18 per cent as there will be abatement for land cost, according to tax consultant EY.
    Realtors' body CREDAI President Jaxay Shah also said that the effective GST rate would remain at 12 per cent and assured that as per the law, the developers would pass on the benefits of input tax credit to home buyer
    8.00 pm: India Inc today hailed the rollout of the GST, and said the sweeping tax reform will give huge momentum to the country's economy and tempt global businesses to invest here.
    The industry bodies said they were "fully prepared" for the implementation of the new indirect tax regime, which comes into effect from midnight, while commending the government's efforts towards its rollout.
    The nationwide Goods and Services Tax (GST) will overhaul India's convoluted indirect taxation system and unify the over USD 2 trillion economy with 1.3 billion people into a single market.
    7.50 pm: Finance Minster Arun Jaitley chairs the 18th GST Council meeting at Vigyan Bhavan. 

Aadhar-PAN linking last day: PAN will not be invalid even after June 30, says CBDT
  • The Central Board of Direct Taxes (CBDT) assured that PAN numbers will not be tagged invalid even if they have not been linked to respective Aadhar numbers by June 30. A definite deadline for Aadhar-PAN is to be issued later.
    "There is no need for any panic. PAN will not become invalid after June 30," an Economic Times report quoted CBDT Chairman Sushil Chandra.
    The statement came after panic spread after people believed that June 30 is the last day for linking Aadhar and PAN numbers, a misinterpretation of a notification issued in this regard on Wednesday.
    The notification stated, "Every person who has been allotted permanent account number as on the 1st day of July, 2017 and who in accordance with the provisions of sub-section (2) of section 139AA is required to intimate his Aadhaar number, shall intimate his Aadhaar number to the Principal Director General of Income-tax (Systems) or Director-General of Income-tax (Systems) or the person authorised by the said authorities."
    Even the Section 139 AA of Income Tax Act, quoted in the notification, mentions that a closing date for Aadhar-PAN linking will be decided and notified later by the income tax department. Failing to get this done by this later date will render the PAN invalid.
    "Every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to such authority in such form and manner as may be prescribed, on or before a date to be notified by the Central Government in the Official Gazette. Provided that in case of failure to intimate the Aadhaar number, the permanent account number allotted to the person shall be deemed to be invalid and the other provisions of this Act shall apply, as if the person had not applied for allotment of permanent account number," reads the section (2) of Section 139 AA of I-T Act.
    However, it will be best to get the task done promptly as huge influx of visitors at the income tax website is likely to cause slow down in the process. Here is how you can do it:
    • Register on the e-Filing portal of the Income Tax Department,
    • Enter log-in ID, password and date of birth
    • After logging in, go to your profile setting which has the option of linking your Aadhaar Card. Generally, a pop-up window appears, prompting you to link your PAN card with Aadhaar card.
    • Check if the details such as name, date of birth and gender appearing on screen match with those on your Aadhaar card.
    • Enter your Aadhaar card number and click on the 'link now' button. If details on both the cards match, your card will be linked instantly.
    Authorities are pushing for linking the biometric unique identification number to PAN in a bid to check tax evasion using multiple PAN cards.

Manufacturing sector needs to be perpared for good and bad of GST, says EY India
  • The implementation of nationwide GST replacing the plethora of taxes under the current regime is a historic and transformational reform. The benefits of GST are immense for the manufacturing sector and some of the significant changes are summarized below:
    1. Before GST, the manufacturers are required to apply and obtain multiple registrations (unit wise for factory, depot), service tax, VAT, CST. With GST providing for a single GSTIN at a State level, there is simplification of not only the registration but also permits the input credits to be pooled and utilized at TIN level as opposed to factory level for excise duties.
    2. While the manufacturers being generally within the value chain could claim the input tax credit on most central/ State taxes, there were cascading taxes as well as costs in the form of CST, trading related reversals, etc. With GST, the cascading of taxes is eliminated while the reversals/ adjustments also reduce significantly.
    3. It is important for the manufacturers to look at their supply chain and plan for further efficiencies where possible. A relook at the depot structure/ consolidation and setting up of new factories on sound business logic could be facilitated in the GST regime.
    With such a historic reform, there is every chance that some new issues could arise and the manufacturing industry has to be patient and persistent to seek suitable amendments where possible. Some of the immediate challenges for the manufacturing sector from a GST legislation perspective are:
    1. Clarity is awaited on the mechanism for excise exempt units set up under the area based exemption.
    2. While the existing credits are permitted to transition to the GST regime, clarity is required on the balances lying in Account Current (such as PLA, Advance Octroi deposit, etc.).
    3. The per day exemption granted for purchase from unregistered dealers is impractical from a tracking and monitoring perspective and could perhaps be simplified to provide an overall monthly limit and GST payable beyond such limit.

Government lowers interest rates on PPF, small savings from July 1
  • The government has lowered interest rate on small saving schemes by 10 basis points for the July-September quarter. The rates have been lowered by 0.1 per cent across the board compared to the April-June quarter. However, interest on savings deposits has been retained at 4 per cent annually.
    Since April last year, interest rates of all small saving schemes have been recalibrated on a quarterly basis.
    A finance ministry notification said investments in the public provident fund (PPF) scheme will fetch lower annual rate of 7.8 per cent. Kisan Vikas Patra (KVP) investments will yield 7.5 per cent and mature in 115 months.
    The one for girl child savings, Sukanya Samriddhi Account Scheme, will offer 8.3 per cent annually, against 8.4 per cent at present.
    The investment on 5-year Senior Citizens Savings Scheme will yield 8.3 per cent. The interest rate on the senior citizens scheme is paid quarterly.
    Term deposits of 1-5 years will fetch a lower 6.8-7.6 per cent that will be paid quarterly while the 5-year recurring deposit has been pegged lower at 7.1 per cent.
    The move is expected to prompt banks to lower the deposit rate in line with the small savings rate as offered by the government.
    "On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis," the ministry said while notifying the rates for second quarter of financial year 2017-18.
    While announcing the quarterly setting of interest rates, the ministry had said the rates of small saving schemes would be linked to government bond yields.

    GST to become reality: Here's what gets costlier and cheaper after midnight
    • The Goods and Service Tax (GST) roll-out will become reality post midnight. There is no doubt that India's biggest tax overhaul will be a mixed bag for consumers.
      The landmark Goods and Services Tax will not alter the prices of essentials and daily use items like salt and soaps as they have either been exempt or tax on them has been kept at the current level.
      Unbranded food staples including vegetables, milk, eggs and flour will be exempt from GST along with health and education services.
      Here's what may get dearer due to GST
      Gold, Ghee, Biscuits, Chewing gum, Branded Flour, Branded Rice, ice cream, chocolates, ayurvedic medicines, Hotels with room tariffs above Rs 5,000, restaurants in five-star hotels, AC restaurants, Movie tickets costing more than Rs 100, Music concerts, IPL match tickets, Perfumes, AC train tickets, Business-class air tickets, Air-conditioner, refrigerator, washing machine, Television, LED TV, Mobile phone bills, insurance premiums, banking charges, credit card charges,  Motorcycles with engine capacity of more than 350 cc, soft drinks
      Here's what may become cheaper from July 1
      Tea, edible oils, sugar, textiles, baby formula, Milk, Rice, Wheat, Pasta, Spaghetti, Macaroni, Noodles, Pickle, Ketchup, Sauces, Mineral water, Cashew nuts, soap, Hair oil, Detergent powder, Toothpaste, Agarbatti, Notebooks, Printers, Pens, Insulin, spectacles, Footwear, Khadi fabrics, Silk, Electric transformers, Movie tickets less than Rs 100, Luxury cars, Motorcycles, Economy-class air tickets, Hotels with lower tariff, Cement

    General Awareness

    PM attends centenary celebrations of Sabarmati Ashram and launches several projects

    • Prime Minister Narendra Modi was on a two-day visit to Gujarat on 29th and 30th June 2017. He attended following events, during the course of this visit:
      • Centenary celebrations of Sabarmati Ashram in Ahmedabad on 29th June, 2017.Event to mark the 150th birth anniversary of Shrimad Rajchandraji at Sabarmati Ashram on 29th June, 2017.
      • Samajik Adhikarita Shivir in Rajkot, wherein PM interacted with Divyang (people with disabilities). He also distributed aid and devices worth 35 crore to over 18,000 divyang people at a grand function at the Race Course ground, Rajkot on June 29, 2017. This was country’s biggest camp in terms of the number of beneficiaries.
      • On June 29, 2017, at Aaji dam on the outskirts of Rajkot city, PM launched irrigation & water related initiatives.
      • On June 30, 2017, PM attended a programme to dedicate water supply schemes based on Vatrak, Mazum and Meswo Dams at Modasa in Aravalli district in north Gujarat.
      • He also inaugurated two water supply projects worth 552 crore for the region and addressed a large gathering at the venue.
      • On June 30, 2017, afternoon PM inaugurated ‘Textiles India 2017’.
      • Lastly, PM Modi inaugurated an integrated sports & entertainment ‘Arena Project’ in Ahmedabad.
      PM Modi Inaugurates ‘Textiles India’ in Gandhinagar
      On June 30, 2017, Prime Minister Narendra Modi inaugurated ‘Textiles India’, country’s first-ever mega trade event for the textiles sector in Gandhinagar, Gujarat.
      About ‘Textiles India’:
      The event ‘Textiles India 2017’, organised by the Union Ministry of Textiles, is aimed at showcasing the country as a global sourcing hub and investment destination.
      • The three-day event is expected to see participation from 2500 international buyers, over a 1000 international and domestic exhibitors and several top fashion designers.
      • Gujarat chief minister Vijay Rupani and Deputy Chief minister Nitin Patel, along with Union Ministers including Finance Minister Arun Jaitley, Commerce and Industry Minister Nirmala Sitharaman and Textile Minister Smriti Irani also participated in this event.
      • Kumar Mangalam Birla, Chairman, Aditya Birla group; K. Goenka, Chairman, Welspun Group; Sanjay Lalbhai, Chairman and Managing Director, Arvind Ltd; and Gautam Singhania, CMD, Raymond Group attended the inaugural ceremony.
      PM Releases Commemorative Coins, Stamp On Shrimad Rajchandraji
      On June 29, 2017, Prime Minister Narendra Modi released coins and a stamp on Mahatma Gandhi’s spiritual guide, Shrimad Rajchandraji, at the Sabarmati Ashram in Ahmedabad, Gujarat.
      • PM Modi released a commemorative first-day cover and a stamp of Rs 5 and coins of Rs 150 and Rs 10 denominations to mark the 150th birth anniversaryof the Jain poet-thinker, which has coincided with the Sabarmati Ashram’s centenary celebrations.
      • Shrimad Rajchandraji is known to be the spiritual mentor of Mahatma Gandhi.
      PM inaugurates filling of Aji Dam under Sauni Yojana
      On June 29, 2017, Prime Minister, Narendra Modi, inaugurated the filling of Aji Dam near Rajkot under SAUNI Yojana.
      • The aim of SAUNI yojana is to divert excess over flowing flood water of River Narmada to 115 water starved reservoirs of eleven districts in Saurashtra region of Gujarat by constructing 1126 km long four link pipelines.

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