Mercedes-Benz Reduces Prices in India

German luxury car maker Mercedes-Benz is reducing the price of its cars for the whole month of June in India. The price reduction will range from $2,170  on the CLA sedan to $10,850  on its Maybach S 500.

The company seeks to pass on the benefits of the new tax rate under GST due to be implemented on July 1, to its customers. However, in case GST is deferred, the company said it would hold the current  prices reports Firstpost.

Mercedes-Benz-New-E-Class--2

Mercedes-Benz India managing director and CEO Roland Folger said, “We now know more in details what taxes are going to be in various states. So we have decided to compensate the difference between the current and post GST prices for our entire Made in India range. Our decision to go ahead and reduce the price is also a reflection of our confidence in this government.”

Per GST rates, large luxury cars and SUVs with engine capacity of over 1.5 liters attract a 15 percent “cess” over and above peak rate of 28 percent, bringing down the overall tax incidence compared to the present of about 50 percent.

June 10, 2017   No Comments

Warehousing Sector Surges in India

In anticipation of the national Goods and Services Tax roll-out in July, warehousing facilities will increase by 18 percent to 132.5 million sq ft, and this sector is likely to see investments of about $700 million, according to industry experts

Delhi-NCR had the maximum warehousing stock in 2016 at 29.3 million sq ft, followed by the Mumbai Metropolitan Region, Bangalore, Pune, Chennai  Kolkata, Hyderabad, and Ahmedabad.

A warehouse

Ramesh Nair, CEO, JLL India, told BusinessLine that in 2016, the Grade A and B warehousing stock touched 111.9 million sq ft from 96.8 million sq ft in 2015, and that the GST roll out will “up-grade warehousing infrastructure.”

According to Nair, Pune and Chennai lead the way in Grade A and B warehouse rentals due to their proximity to manufacturing hubs, and local market dynamics.

 

May 30, 2017   No Comments

Walmart India Trains Supplier Partners in GST Compliance

Walmart India has started a series of workshops for its supplier partners to help them evaluate their Goods and Services Tax compliance levels and prepare for the transition to the new tax structure to be rolled out from July 1. Tax rates have been finalized for 1,211 items with a majority of items listed under the 18 percent slab.

GST is not just a tax reform, it is a whole new way of doing business. With its impending implementation, it is imperative for all businesses, large and small, to get ready to embark on the GST adoption journey,” said Krish Iyer, president and CEO of Walmart India.

Taxes“These workshops are expected to educate them [supplier partners] and accelerate their preparation by providing them with a platform to answer queries and concerns. With the customer at the heart of everything we do, this initiative will ultimately lead to a positive impact on the customer as we emerge with a streamlined process both at the back-end and the front-end,” Iyer added, reports the Economic Times.

May 29, 2017   No Comments

India Finalizes Rates for New GST Regimen

At a two-day meeting of the Goods and Services Tax (GST) Council in Srinagar, the capital of India’s northernmost state of Jammu and Kashmir, India finalized tax rates that will apply to different goods and services from July 1. A panel comprising federal and state finance ministers fixed the rates for over 1211 items under the Goods and Services tax.

Goods
No tax will be imposed on food items such as fresh meat, fish chicken, eggs, milk, butter milk, yogurt, natural honey, fresh fruits and vegetables, flour, bread, and salt to mention a few. Stamps, judicial papers, printed books, newspapers, and bangles, are some of the non-food items which will not be taxed.

A 5% tax will be applied on items such as fish fillet, cream, skimmed milk powder, frozen vegetables, coffee, tea, spices, and edible oil for example. Kerosene, coal, medicines, stents and lifeboats will also be taxed at 5%.

A 12% tax will be levied on frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, savory snack items. Ayurvedic medicines, tooth powder, incense, coloring books, picture books, umbrellas, sewing machines, and mobile phones also fall in this tax bracket.

An 18% tax slab will be applied to refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, and mineral water to name a few. Tissues, envelopes, tampons, note books, steel products, printed circuits, cameras, speakers and monitors also fall in this tax slab.

A 28% tax – the highest in the GST systemwill be levied on chewing gum, molasses, waffles and wafers coated with chocolate, and aerated water. This tax slab also includes items such as paints, deodorants, shaving creams, after shave lotions, shampoos, dyes, sunscreen, wallpaper, ceramic tiles, water heaters, dishwashers, weighing machines, washing machines, vending machines, vacuum cleaners, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use.

Services

No Tax on Education and Healthcare services, hotels and lodges with tariffs below $15. The services that are currently exempt shall continue to be exempt under the GST regime. Services by government, and foreign diplomatic missions are also covered in the exemption list.

A 5% tax will apply to transport services such as railways, and economy class air transport,  cab aggregators, and small restaurants.

A 12% tax will be levied on hotels that do not have air conditioners, business class air tickets, fertilizers, and work contracts.

 An 18% tax slab will apply to hotels that have air conditioning and that serve liquor, telecom services, IT services, branded garments, insurance, and financial services.

A 28% tax will be applied to 5-star hotels, betting on races, and movie tickets.

Input tax credit will lower all taxes. E-commerce establishments will deduct 1% tax at source before paying suppliers. The GST Council will take up taxation of gold and other precious metals and items such as packaged foods, footwear and textiles at the next meeting on June 3, India’s Finance Minister Jaitley said. Taxation of lottery service has also not been decided yet reports the Economic Times.

“Several process related changes can now be undertaken as the passage of the rules has paved the way for the introduction of the most significant tax reform in India,” said M.S. Mani, senior director at Deloitte Haskins & Sells LLP.

Taxes

May 20, 2017   No Comments

IMF: GST Will Push India’s GDP Growth Rate up over 8%

In an exclusive interview with the Press Trust of India, Tao Zhang, Deputy Managing Director of the International Monetary Fund said: “The government has made significant progress on important economic reforms that will support strong and sustainable growth going forward.”

 “We expect that the Goods and Services Tax (GST), which is targeted to be applied, starting in July, will help raise India’s medium-term growth to above 8 per cent, as it will enhance production and the movement of goods and services across Indian states.”
“We are extremely impressed by the work that is being done and that we expect it will pay off in terms of higher growth in the future. More could be done to raise agricultural productivity and enhance market efficiency. This would help increase the supply of high-value foods, enhance returns to farmers, and dampen food inflation pressures.”
The Economic Times reports that Zhang also stressed on the need for labor market reforms in India. “As India persists with its strong reform efforts, labor market reforms should take priority,” he noted.
Taxes

May 13, 2017   No Comments