Category: TAX LAWS

The government is considering imposing remedial duty on the import of “single mode optical fibre” after an investigation by the Directorate General of Trade Remedies (DGTR) confirmed its dumping mainly from China.

India has found large-scale dumping of optical fiber from China, days after Beijing extended a protective tariff on the import of Indian-made fibre for five years, which could trigger an identical tariff measure by New Delhi against the Chinese product within the local market, two official’s conscious of development said.[1]

The government is considering imposing remedial duty on the import of “single mode optical fibre” after an investigation by the Directorate General of Trade Remedies (DGTR) confirmed its dumping mainly from China, the officials said, requesting anonymity. The DGTR may be a single-window agency tasked with providing a level-playing field to domestic industry against unfair trade practices by countries like China.

After an in-depth investigation, DGTR on Friday concluded that import of single mode optical fiber at below cost is threatening to cause “serious injury” to Indian manufacturers and recommended imposition of a tenth safeguard duty on its import from all countries except developing nations, barring China, the officials said. the govt had already raised basic customs (BCD) thereon by 5% in July 2019.

The finance ministry is predicted to require a final judgment on the matter soon, they said. Single mode optical fiber is employed in manufacturing optical fiber cables utilized in telecommunication operations like community access televisions (CATV).

“Effectively, the measure is against Chinese firms as combined import from all other developing countries is a smaller amount than 9%. China alone features a share of over 84% in its import,” one among the officials said.[2]

The DGTR’s recommendation came close on the heels of Chinese commerce ministry’s punitive tariff on an equivalent product imported from India for five years, effective from August 14.

According to officials, China is resorting to tariff barriers because its companies are affected by overcapacity, and also diverting its exports to the Indian market within the face of a worldwide boycott of the Chinese products. “Based on complaints by the domestic optic fibre industry, DGT

R had initiated the investigation on Chinese dumping on September 23 last year. It had issued a primary finding on November 6 last year, but its recommendations couldn’t be implemented at that point,” the primary official said.

The second official said India was very cautious about Chinese unfair trade practices, especially after June 15. Sino-Indian tensions have shot up after a violent brawl between Chinese and Indian soldiers on June 15 along the road of Actual Control within the Galwan Valley in eastern Ladakh during which 20 Indian army personnel and an unspecified number of Chinese were killed.

“Given the domestic economic scenario, the finance ministry is predicted to simply accept this,” Divakar Vijayasarathy, founder and managing partner at consulting company DVS Advisors LLP, said. The move can’t be linked to China alone because the government has been indicating its intentions of protecting domestic industry.

“In the budget, customs were increased for quite 10 products. Since China may be a major supplier for India with an enormous trade surplus, any action on imports across the board would impact China. Atmanirbhar Bharat {Self-Reliant India} itself is to limit the influence of China on Indian markets and with relationships soaring, indirect economic sanctions will help both in hurting China and giving a lift to the fortunes of the domestic industry,” he said.

Dumping is an unfair trade practice that entails the export of a product at a price less than its value and is countered by punitive actions, which are a suitable measure under multilateral trade agreements, the officials said. Remedial actions include imposition of protective tariff (against underpriced imports), safeguard measures (imposition of a requirement, a quota, or both against an unexpected import surge) and duty (against export subsidies) to guard domestic units.

India has taken a troublesome position against unfair Chinese trade practices because it is committed to protecting domestic industry under the government’s Make in India campaign, the officials said.

India-China bilateral trade is heavily tilted in favour of China. consistent with trade figures released by the overall Administration of Customs of China (GACC) in mid-January 2020, India’s deficit with China was $56.77 billion in 2019; bilateral trade amounted to about $92.68 billion last year, a 1.6% annual increase.

BY

RASHI OSWAL

B.A. L.L.B 4th Year

DES NAVALMAL FIRODIA LAW COLLEGE, Pune

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[1] https://www.hindustantimes.com/india-news/anti-dumping-measure-tariff-on-chinese-optical-fibre-likely/story-LHhTYR5IyP7txmCVAEKKwM.html

[2] https://www.eqmagpro.com/25-chinese-items-may-face-extension-of-dumping-duty/

Since a very long time there was a need for Uniform tax rate in India, and the Indian Government in consonance with their policies and other strategies Implemented Goods and Service Tax (GST) on 1^st of July 2017, this system of implementing a single tax regime was criticized by each opposition but the ruling government incorporated it and implemented it for the betterment of our economy. This tax regime would completely replace the old setup of tax system, which earlier provided several loopholes and paved the way for tax evasion. This system was established to boost our country’s Economy and also for Ease of doing business status in our country. This regime replaced all the central and state taxes and thus bringing about a ‘One Nation and One Tax’ system in 2017. The GST council was established in order to determine tax slabs for each and every goods and services which are being rendered. However Sectors like Petroleum, Real Estate and alcohol were exempted From GST.

“Ease of Doing Business Index under New Mission: Atmanirbhar Bharat”

This mission was established to boost the Indian Economy and urge the Indian Industries and Manufactures and other service sectors to expand their products globally. This was just one aspect; other thing was to attract foreign investor to invest in India and expand and manufacture their products in India and export globally. For instance Apple Inc. to Invest in its Bangalore factory to expand its production of Manufacturing IPhones.

Atmanirbhar Bharat actually means Self Sufficient India, and this mission is an Extension of the campaign ‘Make in India’ which focuses on growth of Indian companies as well. This mission focuses on economy, Infrastructure, and other sectors like MSME’s and Agriculture.

When the Goal is to promote Business and Investment Sector in India, the first thing which comes to my mind is Ease of doing Business in India. If we go through the past, Indian government has adopted significant reforms which had improved India’s Ease of doing business Index rank from 142 in 2014 to 63 in 2020. This Aspect is mostly looked by investors before Investing and it is considered as one of the most important indicators in today’s world. Currently Indian Government is eyeing on to reach the Top 50 nations in Ease of doing business and to achieve this, the government should put in further reforms in taxation regime. The chief of 13^th Finance commission, who is considered as man behind GST had argued for Uniform that is Single tax rate system in his book called ‘In service of the Republic: The Art and Science of Economic Policy’.

Single Tax Rate System

This tax rate means that there should be one tax system which should be charged on each and every product produced in India, This shall reduce the burden of compliance in Tax which similarly reduces the time of filing returns for individuals and groups and helping India improve in Ease of doing business. This will further increase competitiveness in Market. This flat rate should bring in following things and should be taken into consideration

1. Simpler GST regime
2. Curtailing the biasedness between states with respect to product taxation
3. There will be overall decrease in Tax incidence in the country
4. Better efficiency and Transparency.

It is mandatory to accomplish the given objectives for Achieving the Success of Atmanirbhar Bharat Campaign. This System would enhance better calculations of tax and would increase efficiency within the administration and thus will attract more foreign investors. The single flat rate would reduce biasedness between states in taxation on different goods and services, which discouraged manufacturers of goods and services in all over sectors.

Model tax regimes

As we see New Zealand and Singapore have adopted a single tax rate or standard tax rate for indirect taxation. Both of these countries have Ranked 1^st and 2^nd respectively in ease of doing business ranking 2020 and in the indicator paying taxes, both New Zealand and Singapore have ranked high due to simplified taxation regime and have ranked 9^th and 7^th respectively out of 190 Nations whereas India in the same category has been ranked at 115.

Singapore has one Standard tax rate at 7% and other NIL being exempted, so all the product attract 7% of GST, this was increased from 5% to 7%. Adopting this model it is necessary for India to adopt a single Tax regime to improve ease of doing business index in our country. New Zealand on other hand shifted to uniform tax regime in the year 1986 and it collected 15% on all goods and services. This model should be incorporated in the Indian context and thus will improve competitiveness of Indian industries. US based tax foundation has ranked New Zealand tax system as 2^nd best tax regime in developed world economies for its competitiveness. It is true that India should adopt New Zealand model of tax regime but the standard rate should be reduced or else it will discourage business and will not attract any foreign Investments.

Conclusions

To additional improve the seriousness of the Indian business, this change force must be continued with standard checking. Similarly, it is significant that Central and state governments guarantee the changes arrive at the grassroots business viably with momentary measures and long haul procedures. To start with, the online Single Window System (SWS) is a compelling method to excuse strategies, time and cost of activities for organizations. While a lion’s share of the states have embraced it, the SWS ought to be set up by all states and Union Territories inside the following a year. The adequacy of the SWS can be reinforced across India by the usage of specific estimates, for example, setting up a Central Monitoring Mechanism headed by the main secretary for looking into the SWS of different states at ordinary stretches; guaranteeing ideal mechanical updates of the online entrance; improving viability of the Right to Services Act and empowering self and outsider accreditations, and so forth.

BY

ANKITH KUMAR

B.A. L.L.B – 5th Year

CHRIST (Deemed to be University) Bengaluru