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GST Council Announces GST Rates

The GST Council headed by finance Minister Arun Jaitley has finalised tax rates and has approved all the seven rules for the GST regime that is scheduled to be implemented from July 1. The remaining two rules of the GST pertaining to transition and return is under the examination of the legal committee. In total, the council has fixed the rates of 1211 items. It will decide rates of some other items and services in the coming days.

Salient Highlights

  • Out of 1211 items, 81% of the items will attract tax of 18% or less. Only the remaining 19% of items will attract a highest rate of 28%
  • Household items like Sugar, Tea, Coffee and edible oil will attract 5% levy. Cereals and milk will be exempted from the tax.
  • Manufactured goods will attract 18% levy.
  • Luxury cars will attract 28% GST in addition to a cess of 15%. Small petrol cars will attract 28% GST plus a 1% cess, and diesel cars will be taxed at  28% plus 3% cess.
  • Capital goods, a key asset for the manufacturing sector, will be taxed at 28%.
  • Aerated drinks will fall under the 28% tax bracket.

Significance

The GST Council has not increased the overall tax in any of the 1211 items but have reduced tax on many items. For example, Soap, which is now taxed at the rate of 22-24%, will be taxed at 18%.

The present tax incidence in excess of 28% on luxury items will be treated as cess and will be deposited in the corpus for compensating states if they suffer any revenue loss. 

Food items are expected to become cheaper. Daily use items like hair oil, toothpaste, and soap are kept in the 18% tax slab instead of 28%.

The cost of energy generation is expected to become less as tax incidence on coal has been reduced from 11% to 5%.

GST regime is expected to unify the whole of the country into a common market eliminating both Central and State levies. Also, GST is expected to increase state and federal tax revenues, ease inflation and boost economic growth by 1-2% points in the medium term.

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Union Cabinet Approves Pharma Mission to Develop Bio-Pharmaceuticals

The Cabinet Committee on Economic Affairs (CCEA) has approved a collaborative mission between industry and academia called ‘Innovate in India empowering biotech entrepreneurs and accelerating inclusive innovation‘ that is aimed at accelerating research for early development of bio-pharmaceuticals. 

Salient Highlights

The mission would attract an investment of Rs 1,500 crore from the central government over a period of five years. Half of the funding would be funded through a loan from World Bank.

The mission will be implemented by Biotechnology Industry Research Assistance Council (BIRAC), a public sector undertaking working under the Department of Biotechnology (DBT).

The mission will focus on key areas that would supplement country’s technological and product development capabilities in the biopharmaceutical sector to enable the sector to become globally competitive over the next 10-15 years.

The significance of the mission lies in the fact that National Biotechnology Development Strategy 2015-2020 announced by the Department of Biotechnology (DBT) lays emphasis on making the country achieve USD 100 billion biotech industry by 2025. 

The mission will concentrate on development of specific products such as vaccines, biotherapeutics, medical devices and diagnostics etc. Besides, the mission will also work on establishment of shared infrastructure and facilities.

The mission will help in building and strengthening domain specific knowledge and management skills at the same time creating and enhancing technology transfer capabilities in public and private sector.

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Indian Army gets its First Artillery Gun in 30 Years

Nearly after 30 years after the induction of  Bofors howitzers, Indian Army will get its first artillery guns called M777 from BAE Systems. Swedish Bofors guns were inducted in late 1980s after which Army has not inducted any modern artillery guns. The two M777s has arrived in New Delhi and will be tested at the Pokhran field firing range in Rajasthan. The two M777 guns will be used for compilation of firing tables. Indian Army has plans to equip 169 regiments with 3,503 guns by 2020.

Salient Highlights

The deal for procuring M777 guns from the United States was initiated in 2010. Finally, the contract worth Rs 2,900-crore to buy 145 M777 guns were struck in November 2016. The government-to-government deal was struck under the Foreign Military Sales (FMS) route. 

The 155 mm/39-caliber howitzers will increase the army’s capabilities in high altitude and will be deployed in the northern and eastern sectors. The modular design of the guns would come handy in towing the guns along the narrow and treacherous mountain roads that is found in India’s borders with both Pakistan and China. It will be especially used by the army’s new mountain strike corps which is being raised to counter China in the Northeast. The new corps is expected to be fully operational by 2025.

The guns can also be airlifted by using heavy-lift helicopters like the Chinook. India has signed an agreement to acquire Chinook from the US. The C130J Super Hercules, which are used for strategic airlift by India is also capable of airlifting M777 guns.

The M777 guns are already in service in the countries like  the US, Canada and Australia. These guns were deployed by these armies in Afghanistan and Iraq.

The first 25 guns will be inducted directly. The rest 120 guns will be be assembled in India by BAE Systems in collaboration with Mahindra Defence.  

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