GS-3, Indian Economy, Uncategorized

All you need to know about GST

What is GST?

Goods and Services Tax (GST) is a value-added tax at each stage of the supply of goods and services precisely on the amount of value addition achieved. It seeks to eliminate inefficiencies in the tax system that result in ‘tax on tax’, known as cascading of taxes. GST is a destination-based tax on consumption, as per which the state’s share of taxes on inter-state commerce goes to the one that is home to the final consumer, rather than to the exporting state. GST has two equal components of central and state GST.

What is input tax credit?

To make sure that tax is levied only on the amount of value addition at each stage of the supply chain, credit for the taxes paid at the previous stage is granted. For example, a garment manufacturer gets credit for the taxes paid on the materials purchased while computing the final indirect tax liability on his product that is collected from the consumer. Similarly, a service provider, say, a telecom company, gets credits for the taxes paid on the goods and services used in his business.

Who is liable to pay GST?

Businesses and traders with annual sales above Rs20 lakh are liable to pay GST. The threshold for paying GST is Rs10 lakh in the case of northeastern and special category states. GST is applicable on inter-state trade irrespective of this threshold.

What are the existing taxes subsumed into GST?

Taxes on production such as central excise duty and additional excise duty, import duties such as additional customs duty known as countervailing duty and special additional customs duty, service tax, central cesses and surcharges, state taxes like value-added tax (VAT), central sales tax on inter-state trade of goods, luxury tax, entertainment tax except those levied by local bodies, taxes on advertisements, taxes on betting and gambling and state cesses and surcharges on supply of goods and services are subsumed into GST. Basic customs duty, which includes the tariff barrier on imports, is not part of GST.

What are the benefits of GST?

GST brings transparency on the taxes levied on the supply of goods and services. At present, when an item is purchased, the common man sees only the state taxes on the product label, not the various embedded tax components. GST will improve the ease of doing business as entry barriers along state borders will be dismantled. The new indirect tax system is expected to improve tax compliance, boost revenue receipts of central and state governments and accelerate GDP growth rate by an estimated 1.5-2 percentage points. Elimination of cascading of taxes will result in reduced tax burden on many items.

What are the products not part of GST?

Crude oil, diesel, petrol, natural gas and jet fuel are temporarily kept out of GST. The GST Council, the federal indirect tax body of state finance ministers chaired by the Union finance minister, will decide when to bring these items into GST. Liquor is kept out of GST as a constitutional provision and hence it would require an amendment to Constitution if it is to be brought into GST net.

What is integrated GST or IGST?

IGST is the tax on inter-state supply of goods and services with central and state GST components.

How are imports treated?

Imports are treated as inter-state supplies and will attract IGST. Exports do not attract any tax. Taxes paid on raw materials and services used in export of goods and services are refunded to the business.

What is the anti-profiteering mechanism?

To prevent the possibility of prices going up and to make sure that the reduced tax burden on products and services are passed on to consumers, the government has introduced an anti-profiteering clause in the GST law. The anti-pro teering authority to be set up will act on complaints of profiteering and direct a profiteering supplier to cut price, return the benefit of reduced tax burden to the buyer with 18% interest, or recover such amount if the buyer cannot be identified or doesn’t make a claim. A profiteering business could lose its GST registration, too.

How are decisions taken at the GST Council?

No decision can be taken in the Council without the concurrence of both the Union and the state governments. Decisions will be taken by a 75% majority of the weighted votes of members present and voting. The Union government’s vote has a weightage of one-third of the votes cast, while all states together will have a weightage of two-thirds of the votes cast.

GS-3, Uncategorized

Government launches new Energy Conservation Building Code

The code was developed by the Ministry of Power and Bureau of Energy Efficiency (BEE), with technical support from United States Agency for International Development (USAID) under the U.S.-India bilateral Partnership to Advance Clean Energy–Deployment Technical Assistance (PACE-DTA) program.

Features of the code:

  • The code prescribes energy performance standards for new commercial buildings to be constructed across India.
  • It sets parameters for builders, designers and architects to integrate renewable energy sources in building design with the inclusion of passive design strategies
  • The code aims to optimize energy savings with the comfort levels for occupants, and prefers life-cycle cost effectiveness to achieve energy neutrality in commercial buildings
  • Buildings need to demonstrate minimum energy savings of 25% to be considered as ECBC compliant
  • Additional improvements in energy efficiency would lead to higher grades like ECBC Plus (for savings of 35%) or Super ECBC (for savings of 50%)
  • Adoption of ECBC 2017 for new commercial buildings throughout India will lead to estimated reduction of 50% in energy use by 2030
  • This will be equivalent to expenditure savings of 35,000 crores and 250 million ton of CO2 reduction

The Existing Energy Conservation Building Code:

  • The code provided incentives for adopting conservation measures
  • Under the provisions of the earlier code, states such as Haryana offered up to 25 per cent additional Floor Area Ratio, while Pune Municipal Corporation offers up to 50 per cent discount on premium amount of building permission charges

Providing subsidies under the new program:

  • According to the Minister of state for power coal and new & renewable energy, the success of the program should not be based on incentives and subsidies provided by the government
  • Rather doing away with subsidies and government involvement has made the roll-out faster and more efficient
  • Thus, the initiative should be self-sufficient and made viable based on its size and scale
GS-3, Science & Tech, Uncategorized

What is the difference between GSLV and PSLV?

Both PSLV (Polar Satellite Launch Vehicle) and GSLV (Geosynchronous Satellite Launch Vehicle) are the satellite-launch vehicles (rockets) developed by ISRO. PSLV is designed mainly to deliver the “earth-observation” or “remote-sensing” satellites with lift-off mass of up to about 1750 Kg to Sun-Synchronous circular polar orbits of 600-900 Km altitude.

The remote sensing satellites orbit the earth from pole-to-pole (at about 98 deg orbital-plane inclination). An orbit is called sun-synchronous when the angle between the line joining the centre of the Earth and the satellite and the Sun is constant throughout the orbit.

Due to their sun-synchronism nature, these orbits are also referred to as “Low Earth Orbit (LEO)” which enables the on-board camera to take images of the earth under the same sun-illumination conditions during each of the repeated visits, the satellite makes over the same area on ground thus making the satellite useful for earth resources monitoring.

Apart from launching the remote sensing satellites to Sun-synchronous polar orbits, the PSLV is also used to launch the satellites of lower lift-off mass of up to about 1400 Kg to the elliptical Geosynchronous Transfer Orbit (GTO).

PSLV is a four-staged launch vehicle with first and third stage using solid rocket motors and second and fourth stages using liquid rocket engines. It also uses strap-on motors to augment the thrust provided by the first stage, and depending on the number of these strap-on boosters, the PSLV is classified into its various versions like core-alone version (PSLV-CA), PSLV-G or PSLV-XL variants.

The GSLV is designed mainly to deliver the communication-satellites to the highly elliptical (typically 250 x 36000 Km) Geosynchronous Transfer Orbit (GTO). The satellite in GTO is further raised to its final destination, viz., Geo-synchronous Earth orbit (GEO) of about 36000 Km altitude (and zero deg inclination on equatorial plane) by firing its in-built on-board engines.

Due to their geo-synchronous nature, the satellites in these orbits appear to remain permanently fixed in the same position in the sky, as viewed from a particular location on Earth, thus avoiding the need of a tracking ground antenna and hence are useful for the communication applications.

Two versions of the GSLV are being developed by ISRO. The first version, GSLV Mk-II, has the capability to launch satellites of lift-off mass of up to 2,500 kg to the GTO and satellites of up to 5,000 kg lift-off mass to the LEO. GSLV MK-II is a three-staged vehicle with first stage using solid rocket motor, second stage using Liquid fuel and the third stage, called Cryogenic Upper Stage, using cryogenic engine.

GS-3, Science & Tech, Uncategorized

10 facts you about ISRO’s GSLV-Mk III

The Geosynchronous Satellite Launch Vehicle-Mark III (GSLV-Mk III), the heaviest rocket ever made by India and capable of carrying large payloads, is set for launch from the Satish Dhawan Space Centre in Sriharikota on June 5, 2017.

Here are a few facts you need to know about the rocket.

1. GSKV-Mk III is capable of launching four-tonne satellites in the Geosynchronous Transfer Orbit (GTO).

2. The rocket is also capable of placing up to eight tonnes in a Low Earth Orbit (LEO), enough to carry a manned module.

3. GSLV-Mk III’s first developmental flight, D1, will carry on June 5 the GSAT-19 satellite — developed to help improve telecommunication and broadcasting areas.

4. This is India’s first fully functional rocket to be tested with a cryogenic engine that uses liquid propellants — liquid oxygen and liquid hydrogen.

5. It took about 25 years, 11 flights and over 200 tests on different components of the rocket for it to be fully realised.

6. The 640-tonne rocket, equal to the weight of 200 fully-grown Asian elephants, is the country’s heaviest but shortest rocket with a height of 43 metre.

7. GSLV-Mk III is a three-stage vehicle with two solid motor strap-ons (S200), a liquid propellant core stage (L110) and a cryogenic stage (C-25).

8. ISRO successfully conducted the static test of its largest solid booster S200 at the Satish Dhawan Space Centre (SDSC), Sriharikota on January 24, 2010. The successful test of S200, which forms the strap-on stage for the GSLV, makes it the third largest solid booster in the world. The static test of liquid core stage (L110) of GSLV-Mk III launch vehicle was done at ISRO’s Liquid Propulsion Systems Centre test facility as early as March 2010.

9. C-25, the large cryogenic upper stage of the GSLV, is the most difficult component of the launch vehicle to be developed. ISRO successfully ground-tested the indigenously developed C-25 on February 18, 2017.

10. If successful, the GSLV-Mk III — earlier named as Launch Vehicle Mark-3 or LVM-3 — could be India’s vehicle of choice to launch people into space.

GS-3, Indian Economy, Uncategorized

All you wanted to know about PARA

What is it?

The Public Sector Asset Rehabilitation Agency or PARA will be an independent entity that will identify the largest and most vexatious NPA accounts held by banks, and then buy these out from them. By consolidating problem accounts across banks, the PARA is expected to solve two problems.

One, it can effect speedier settlements with borrowers by cutting out individual banks. Two, as a single large lender, it can drive a better bargain with borrowers and take more stringent enforcement action against them.

PARA is expected to raise capital for its buyouts by issuing government securities, tapping the capital markets or receiving a capital infusion from the RBI.

In short, PARA is just a new version of the ‘bad bank’ idea that has been doing the rounds for some time now.

Why is it important?

The stockpile of bad loans has had several ill-effects on the economy at large.

One, with 16.6 per cent of their loan book tied up in stressed assets (bad and doubtful loans), banks have been fighting shy of new lending. This is constraining new investments in projects that can power the economy. Even if the Government were to infuse fresh capital into public sector banks, (Rs 1.8 Lakh cr are required) there’s worry that this may go to write off older bad loans rather than kick-start lending.

Two, public sector banks, which hold over 70 per cent of all deposits, are the worst hit by the bad loan problem. For some of these banks, the provisions for bad loans have already overtaken operating profits, leaving them short of capital to sustain operations.

Three, high NPAs force banks to keep their lending rates high to boost their profits.

Finally, with 40 per cent of the loans stuck with companies who simply do not earn enough profits to service them, simply waiting for the problem to solve itself will not work. This is already telling on private sector investments and GDP growth.

PARA is expected solve all these problems at one stroke, by relieving the banks of their NPAs and expediting ways for the corporate borrowers to settle their debts.

Why should I care?

As a depositor, PARA will mean greater safety of your deposits with the tottering public sector banks. As a taxpayer, it is your money that the Centre uses to recapitalise public sector banks when they indulge in big ticket write-offs. By moving large problem accounts to PARA, the government can separate the capital infusion exercise from the clean-up exercise. PARA can raise money from institutional investors rather than looking only to the Government.

As an honest borrower, bad loans weighing on bank balance sheets mean higher interest costs and slower transmission of RBI rate cuts. Once stressed assets are sold to PARA, the RBI can lean harder on banks to pass on its rate cuts.

What other steps RBI has taken before PARA to take care of bad loan problem?

1- 5/25 Scheme

2- S4A scheme

3- Banks Board Bureau

 

GS-3, Indian Economy, Uncategorized

Government launches ‘SEVA’ App

Govt launched the Saral Eindhan Vitaran Application (SEVA),  for power sector consumers.
SEVA is a part of Digital Indiainitiative, which is aimed at increasing the Consumer Connect as well as the Transparency and Accountability in Coal dispatch.

The consumer friendly mobile app helps in tracking of coal dispatch to 118 Power Plants through Fuel Supply Agreement (FSA) of around 500 MT besides, dispatch through Special Forward EAuction and Bridge Linkage from more than 200 dispatch points spread over eight states of the country.

GS-3, Indian Economy, Uncategorized

Cabinet approves National Steel Policy 2017

The Indian steel sector has grown exponentially over the past few years to be the third largest producer of steel globally, contributing to about 2% of the country’s GDP and employing about 5 lakh people directly and about 20 lakh people indirectly.

Key features of the National Steel Policy 2017:

  1. Create self-sufficiency in steel production by providing policy support & guidance to private manufacturers, MSME steel producers, CPSEs
  2. Encourage adequate capacity additions,
  3. Development of globally competitive steel manufacturing capabilities,
  4. Cost-efficient production
  5. Domestic availability of iron ore, coking coal & natural gas,
  6. Facilitating foreign investment
  7. Asset acquisitions of raw materials &
  8. Enhancing the domestic steel demand.

 

GS-3, Science & Tech, Uncategorized

Cabinet approves construction of 10 units of India’s indigenous Pressurized Heavy Water Reactors (PHWR)

1- The total installed capacity of the Plants will be 7000 MW.
2- India has current installed nuclear power capacity of 6780 MW from 22 operational plants.
3- Another 6700 MWs of nuclear power is expected to come onstream by 2021-22 through projects presently under construction.

What is pressurised heavy water reactor?

1- PHWR uses heavy water (deuterium oxide D2O) as its coolant and neutron moderator.
2- The heavy water coolant is kept under pressure, allowing it to be heated to higher
temperatures without boiling, much as in a pressurized water reactor.
3- While heavy water is significantly more expensive than ordinary light water, it creates greatly enhanced neutron economy, allowing the reactor to operate without fuel-enrichment facilities (offsetting the additional expense of the heavy water) and enhancing the ability of the reactor to make use of alternate fuel cycles.

Pressurized Water Reactor (PWR)

  • The PWR uses regular water as a coolant.
  • The primary cooling water is kept at very high pressure so it does not boil.
  • In a PWR, the primary coolant (water) is pumped under high pressure to the reactor core where it is heated by the energy generated by the fission of atoms.
  • The heated water then flows to a steam generator where it transfers its thermal energy to a secondary system where steam is generated and flows to turbines which, in turn, spin an electric generator.
Environment, GS-3, Uncategorized

Ease of getting power: India’s rank up by 73

HIGHLIGHTS

  • India moved up to the 26th spot in global electricity accessibility ranking
  • It moved up from 99th rank in 2014 aided largely by govt’s rural electrification programme

Total power capacity increased by nearly a third (31%) from 243GW in March 2014 to 320 GW in March 2017.

In spite of the present government’s plan to set up 175 GW geeen power capacity by 2022, conventional power generation capacity too has increased by 26% from 214 GW in March 2014 to 270 GW in March 2017.

Conventional and Non conventional Sources of Energy

The conventional sources of Energy includes :

  • Coal, petroleum, natural gas are the conventional sources for Thermal power in India.
  • Water is the conventional source for Hydel Power, etc.

The Non-conventional sources (Renewable energy) of energy includes :

  • Solar Energy, tidal energy, geo-thermal energy, wind energy, etc.

Renewable Energy Sources: Meaning, Advantages and Disadvantages

GS-3, Indian Economy, Uncategorized

Anti-dumping duty imposed on clear float glass imports from Iran

India has imposed anti-dumping duty on a certain type of glass from Iran and also Chinese aluminium radiators to protect domestic industry from cheap imports.

Clear float glass is used in construction, refrigeration, mirror and solar energy industries. The product is a superior quality of glass.

Anti-dumping steps are taken to ensure fair trade and provide a level-playing field to the domestic industry. They are not a measure to restrict import or cause an unjustified increase in cost of products.

What is an ‘Anti-Dumping Duty’

An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. Dumping is a process where a company exports a product at a price lower than the price it normally charges on its own home market.
For ex- If one solar company of China sells one solar panel in China at Rs 1000 per unit (In Chinese currency) but in India market it sells at Rs 900 per unit that is lesser than home market. It will be considered as dumping of product so to protect domestic market govt imposes Anti-dumping duty (For ex- Rs 110 per unit).

Who imposed?

It is imposed by Ministry of Finance on the recommendation of Directorate General of Anti dumping and Allied Duties (DGAD).