Trade Talks

As per point (i) of para 7.01 and para 7.02 of the Foreign Trade Policy (2015-20), Quote “7.01 Deemed Exports (i) “Deemed Exports” for the purpose of this FTP refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange. Supply of goods as specified in Paragraph 7.02 below shall be regarded as “Deemed Exports” provided goods are manufactured in India. 7.02 Categories of Supply Supply of goods under following categories (a) to (d) by a manufacturer and under categories (e) to (h) by main / sub-contractors shall be regarded as “Deemed Exports”: A. Supply by manufacturer: (a) Supply of goods against Advance Authorisation / Advance Authorisation for annual requirement / DFIA; (b) Supply of goods to EOU / STP / EHTP / BTP; (c) Supply of capital goods against EPCG Authorisation;” Unquote Further, para 7.03 of the Foreign Trade Policy (2015-20) says, Quote “7.03

Depending on the design of a country’s tax system, application of the arm’s-length principle may be relevant in determining the taxable objects for one or more direct taxes (income tax, corporate tax, profits tax, etc.). Generally, most countries’ transfer pricing legislation has broad application across direct taxes. One notable exception being Ireland, where the transfer pricing legislation introduced in 2010 applies only to certain classes of income for direct tax purposes.  Countries with other specific types of direct taxes governing specific sectors or transactions types (such as a mining income tax) may need to consider application of transfer pricing legislation to them. Typically, this would be achieved through separate provisions being inserted in the relevant taxing acts. However, where a consolidated tax code has been adopted, a single set of legislation may be possible. Transfer pricing provisions may also be necessary for other types of taxes such as a resources royalty p

To understand ‘BEPS 2.0’ first we need to understand what BEPS is. BEPS (Base Erosion and Profit Shifting) is a tax planning strategy that is used by MNCs to shift their profits from high-tax jurisdiction to low-tax or no-tax jurisdiction. Basically, companies erode the tax base through deductible payments such as interest and royalties, which is undoubtedly an unfair practice to local tax authorities. To limit these practices OECD identified 15 action plans in 2015. But a number of problems remain outstanding, particularly regarding digitalization and the digital economy. Hence, on 29th January 2019, OECD came up with new proposals to combat BEPS activities. Which are generally called ‘BEPS 2.0’. This new policy fills the gaps and answers the questions which remained unanswered in ‘BEPS 1.0’. As of now, there are Pillar One and Pillar Two proposals announced under ‘BEPS 2.0’. Pillar One focuses on coherent review in profit allocation, whereas Pillar Two focuses on exercising of prim

I hope, by now, everybody is aware of what is the RoDTEP Scheme. Assuming that let me highlight some practical questions regarding this scheme. On 28th October 2020 under the chair of Mr. G. K. Pillai, the RoDTEP Committee was formed. The main objective of this committee is to determine the ceiling rates of items covered under the scheme. However, the data of chapter 86, 88, and 89 are still pending from the industry's side. It is predicted that the Remission of Duties and Taxes on Exported Products briefly known as the RoDTEP Scheme is likely to be launched under the new Foreign Trade Policy. The scheme seeks to refund currently un-refunded duties/taxes/levies at the local, state, and central level have borne on the exported products. In view of the above, I have jotted down some key questions which need to be answered, 1.  How to segregate the VAT and Excise Duty leviable on petrol & diesel on export and domestic selling products? 2.  How to segregate the electricity duty bet

GVCs play a vital role for those corporations that have a presence in multiple countries. The significance of the Global Value Chain is rising; especially in the post covid19 era. On the one hand, tight integration of the supply chain management strengthens the company's operations, on the other hand, companies mainly focus on reducing operational costs in order to compete in international markets. GVCs allow multinational corporations to reduce these operational costs significantly. Global Value Chains are mainly backed by technologies, which lead to minimizing errors and maximum output. It is a humongous task to coordinate between manufacturing units, shipping companies, and logistic operators. But the rise of sophisticated GVCs may substantially reduce these efforts.

A great move by Indian policymakers! From now on any investor who resides in a country that shares borders with India, has to route his investments (FDIs) through a government route. Will this work as a shield for Indian tech startups and MSMEs?

India's share in the international market is substantially increased in recent years. As a result, US President Donald Trump has announced plans to end the US's preferential trade status (GSP) with India. It is a clear sign that India is no more a developing nation.  As a repercussion, Hon'ble Finance Minister Smt. Nirmala Sitharaman has recently announced that the MEIS scheme has to be discontinued effective from 31.12.2019. However, as per the latest announcement by DGFT, MEIS will be continued till March 2020.  This year, a new Foreign Trade Policy is likely to be announced in the month of April. Under the regime of the new Foreign Trade Policy, the scheme for 'Remission of Duties or Taxes on Export Product' (RoDTEP) will replace MEIS.  The scheme provides an additional export credit of up to Rs. 68,000 crores and the projected forgone revenue will be up to Rs. 50,000 crores. RoDTEP will also incentivize Indian exporters more than existing schemes (MEIS + RoS