Rubber4U

Rubber4U - 15th July 2014 issue

Budget at a Glance

Budget 2014-15 - Comprehensive action plan

Finance Minister Arun Jaitley presented the Union Budget 2014-15.

 

Direct taxes:

FM proposes, no changes in tax rate but increases personal income tax exemption to `.2.5 lakh

 

• Tax exemption increased to `.3 lakh for senior citizens.
• 80C exemption limit increased to `.1.5 lakh.
• EMI exemption for self-occupied property raised to `.2 lakh.
• No changes in corporate tax.
• Finance Minister has also provided an investment allowance at 15% for 3 years to manufacturing companies which invest more than `.25 crore in plant and machinery.

 

Net effect of direct tax proposals is revenue loss of `.22,200 crores.

 

Indirect taxes:

 

• Basic custom duty on LED panel below 19 inch made nil.
• Export duty on bauxite enhanced from 10% to 20%.
• Excise duty on footwear reduced from 12% to 6%.
• Reduction in excise duty for specified food package industry from 10% to 6%.
• Increased excised duty on tobacco products and aerated water products with added sugar.

Tax proposals on indirect tax front would yield `.7,525 crores.

Investor’s sentiment pretty bearish

International natural rubber prices once gain dropped below `.120 at Bangkok market, which (RSS3 grade) closed at `.119.72 a kg. While Malaysian SMR20 closed at `.100.71 a kg. SMR -20 almost equivalent to domestic RSS4 grade in quality is being imported to India on a large scale as the price is attractive. In June 2014, India's natural rubber imports increased 41.5% to 32,550 tonnes, due to global price advantage.

With high inventory and slack demand, investor’s sentiment is pretty bearish. The rubber stocks in China's bonded warehouses Qingdao have slipped to a five-month low, due to low demand for the commodity as loan collateral, the country still has nearly 150,000 tonnes of rubber in Shanghai.

Today the benchmark RSS4 grade rubber closed at `.143 a kg at Kottayam, while RSS3 grade closed at `.119.72 a kg at Bangkok and Malaysian SMR20 closed at `.100.71 a kg. On National Multi Commodity Exchange July 2014 closed at `.142 a kg, August at `.142.90, September at `.142, October at `.141.70, November at `.143.75 and December at `.145.80 a kg. On Tokyo Commodity Exchange, July 2014 futures series closed at ¥192.5 a kg, August at ¥195.6, September at ¥197.9, October at ¥199.9, November at ¥202.1 and the contract for delivery in December 2014 closed at ¥204 a kg.

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Key highlights of Indian Railway Budget 2014-15

Key Highlights of the railway budget presented by Railway Minister D.V. Sadananda Gowda in the Lok Sabha on 8th July 2014.

• Receipts in 2013-14 were `.139,550 crore, while expenditure was `.130,321 crore.
• Railway would require `.5 lakh crores in 10 years for modernization and target to carry one billion tonnes of freight every year and also to become largest freight carrier in the world.
• Fare revision will bring in `.8,000 crore; receipts in 2014-15 estimated at `.164,374 crore, while expenditure at `.149,176 crore.
• Of the 676 projects sanctioned, only 356 remain completed.
• 4,000 women constables recruited in RPF to make travel in women`s coaches safer.
• Pre-cooked ready-to-eat meals to be introduced; launching feedback service through IVRS on the quality of food; food can be ordered by SMS and phone.
• Future e-Ticketing to support 7200 tickets per minute and to allow 1.2 lakh simultaneous users.
• Diamond quadrilateral to be launched for high-speed trains; `.100 crore allocated for taking project forward; trains on select routes to be speeded up to 160-200 km per hour.
• Bullet train proposed on Mumbai-Ahmedabad sector.
• Government proposes Office-on-Wheels; internet and workstation facilities on select trains.
• Setting up of logistic parks, private freight terminals on PPP model.
• Connectivity to ports through PPP, procurement of parcel vans and rakes by private parties for resource augmentation.
• Some stations to be developed to international standards through PPP model.
• Outsourcing at 50 major stations; onboard housekeeping to be extended to more trains.
• Resource mobilisation through leveraging PSU resources; Foreign Direct Investment and Public Private Participation. Future projects to be financed on public-private partnership model.

 

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What our readers say: http://rubber4u.com/Public/Views.pdf

Railways to get proper direction

The first rail budget of the new government will be presented on 8th July by railway minister Sadananda Gowda, which is expected to pave the way for high-speed trains and private sector investment and also would be people friendly, promising more amenities to passengers.

Today the benchmark RSS4 grade rubber closed at `.143 a kg at Kottayam, while RSS3 grade closed at `.121.66 a kg at Bangkok and Malaysian SMR20 closed at `.101.41 a kg. On National Multi Commodity Exchange July 2014 closed at `.142.20 a kg, August at `.142.29, September at `.142.16 and October at `.141.77 a kg. On Tokyo Commodity Exchange, July 2014 futures series closed at ¥193.1 a kg, August at ¥195.2, September at ¥197.2, October at ¥199.4, November at ¥201.5 and the contract for delivery in December 2014 closed at ¥203.2 a kg. Tommorrow, July future may touch ¥191 a kg.

For latest rate of Currency Exchange: www.rubber4u.com/Statistic/Notices

What our readers say: http://rubber4u.com/Public/Views.pdf

Read lot more in Rubber4U – 15th July 2014 Anniversary issue

Industry looking for change in inverted duty structure

Automotive Tyre Manufacturers Association, in its pre-budget memorandum to the Finance Ministry, pointed out that tyres in large volumes are finding entry into India while import of raw materials was restricted as a direct outcome of these agreements. Basic customs duty on tyres is 10%, however, under various trade agreements, the duty on tyres ranges between nil to 8.6% facilitating tyre imports into India. While tyres (finished product) can be imported into India at preferential / concessional duties under various trade agreements, rubber (basic raw material) falls in the negative list (no duty concession) across most trade agreements thus impacting the tyre industry both ways. Hence, the government can increase the customs duty on tyres from existing rate of 10% to a higher rate of duty without contravening WTO provisions as there is no bound rate on tyres. The industry is looking to the new government for scrapping of inverted duty structure, so as to make the industry more competitive.

Today the benchmark RSS4 grade rubber closed at `.144.50 a kg at Kottayam, while RSS3 grade closed at `.123.88 a kg at Bangkok and Malaysian SMR20 closed at `.104.78 a kg. On National Multi Commodity Exchange July 2014 closed at `.143.54 a kg, August at `.143.68, September at `.143.10 and October at `.141.87 a kg. On Tokyo Commodity Exchange, July 2014 futures series closed at ¥202.9 a kg, August at ¥205.3, September at ¥208.1, October at ¥210.1, November at ¥212.5 and the contract for delivery in December 2014 closed at ¥214.6 a kg. Tommorrow, the market will be in red and may touch ¥210 a kg level.

For latest rate of Currency Exchange: www.rubber4u.com/Statistic/Notices

What our readers say: http://rubber4u.com/Public/Views.pdf

Read lot more in Rubber4U – 15th July 2014 Anniversary issue