After years of delay and stagnation, India in May 2017, finalised the four-slab Goods and Services Tax (GST) rates – 5 per cent, 12 per cent, 18 per cent and 28 per cent – thus clearing the deck for the implementation of the GST from July 1. Five services – five-star hotels, racing, betting on racing, movie tickets and casinos — will attract the highest 28 per cent levy. Education and healthcare will remain exempted. The bulk of services such as banking and insurance, telecom, information technology, and the Government services including spectrum auction, and restaurants that have air-conditioning or serve liquor – will fall under the 18 per cent GST bracket. Finance Minister Arun Jaitely underscored the Government has completed most of the work formalities with respect to the rollout and only a few things are remaining. The GST Council will hold its next meeting on June 3.
In yet another initiative to promote Make in India, the Government last week approved a long-awaited Strategic Partnership Policy to encourage private defence manufacturing in the country. Under this new policy model, the Government will create a pool of six Indian companies to join hands with foreign defence firms for manufacturing high-tech defence equipment. For now, four defence sectors – armoured vehicles, fighter jets, helicopters and submarines – have been identified. Major Indian firms such as Adani Group, Reliance Group, Larsen & Toubro, Mahindra Group and Tata Group are among the expected frontrunners. Several foreign defence companies including Airbus, BAE, Boeing, Lockheed Martin and Saab have expressed interest in manufacturing defence equipment in India. So far, India’s defence procurement has been driven by various defence public sector undertakings (DPSUs) and the Ordnance Factory Board (OFB). However, there is still a long road ahead before the Strategic Partnership Policy comes into realisation.
Last week, the Government introduced minor amendments to the Startup definition, announcing an entity up to seven years old will now be eligible for concession under the Startup India Action Plan. The overall age limit has been raised to 10 for biotechnology firms from the date of their establishments. Earlier, companies not older than five years were eligible for benefits under the Startup plan launched in January 2016. The other definition pertaining to a company’s turnover that should be less than USD 3.9 million remains unchanged. The Government also reiterated that a firm should only be considered a Startup if it promotes innovation, development or improvement of products or processes or services, and is based on a business growth model having potential to generate employment and create wealth. Department of Industrial Policy and Promotion (DIPP) underscored that the objective is to ensure ease of starting up a new business, promoting the Startup ecosystem and developing a nation of job creators.