Wednesday, 11 October 2017

Govt May Reduce GST on Construction Materials

At least two state finance ministers told TOI that a number of items like bath fittings, cement, steel products such as rods used for construction are in the top bracket and do not belong there


GST Council may reduce the number of products in the highest slab, following a series of complaints by state finance ministers, who have argued that several common-use products face a 28% levy, causing hardship to people.

At least two state finance ministers told TOI that a number of items like bath fittings, cement, steel products such as rods used for construction are in the top bracket and do not belong there. “The idea was to classify the goods and services into merit and non-merit goods with the non-metrit goods in the top bracket.
But we have gone beyond that,” said a state finance minister, who has usually sided with the Centre on most issues.

The minister said the “block” was too big and needed to be reduced. On Saturday, CBEC officials had also said that there were far too many items in the top slab.

The second state FM said the issue is expected to be discussed at the next meeting of the Council scheduled in Guwahati, given the concerns expressed by several states.“In the medium-term the aim is to move to fewer slabs,”

The minister said. Finance minister Arun Jaitley had last week reiterated the plan to move to fewer slabs in the future.

Some of the state government officials also believe that the 28% levy was also resulting in sellers evading taxes as it is quite common for shopkeepers to advise buyers to pay in cash, where no invoice is issued.

The talk of reducing the number of products in the top bracket follows finalisation of a concept paper at last Friday’s GST Council meeting.

It was decided that a formula for review, including the need for reduction in slabs, the tax credits available and revenue impact will have to be discussed by the Council in detail before a decision is taken, said a source.

Separately, the government has also announced the establishment of a panel of state FMs, which will review the tax structure for different categories of restaurants for a possible reduction or rationalisation. Restaurants currently face a levy of 12% to 28%, depending on whether they are mereeateries or restaurants in five-star hotels.

In addition, the panel has three other terms of reference, including possible exemption for sales revenue from exempted goods in calculating the overall turnover of an entity, a decision that is fraught with the risk of massive leakage from the government treasury.

The committee will see if the composition scheme can be extended to the outward supply of goods. The scheme allows traders (1%), manufacturers (2%) and eateries (5%) with turnover of up to Rs 20 lakh to Rs 1 crore to pay GST at a flat rate with a lower compliance burden.

In deciding GST rates, the government had opted for a principle of equivalence, where the combined incidence of VAT and excise, or service tax, was factored in. The Centre’s focus was on ensuring that there was no rise in the burden on common-use items, especially those which are part of consumer price index, while protecting its revenue.
Several items such as stationary were put in the top bracket, decisions that have already been tweaked.

At the same time, the GST Council, comprising the Centre and the states, had consciously opted for multiple tax rates in segments such as restaurants and hotels with the luxury segment in the top bracket.
Source: https://goo.gl/cZ9i2S

Monday, 10 July 2017

GST impact: Ultratech cuts cement price by up to 3 per cent

The company has started supply of batches on new rates from July 1 from its warehouses, when the new tax structure came into force.

NEW DELHI: Aditya Birla group firm Ultratech Cement today said it has reduced prices of its products by 2-3 percent, extending benefits of tax reduction under the GST regime. Aditya Birla group firm Ultratech Cement today said it has reduced prices of its products by 2-3 percent, extending benefits of tax reduction under the GST regime.

The company has started supply of batches on new rates from July 1 from its warehouses, when the new tax structure came into force.

"There will be somewhere 2 to 3 percent reduction in cement prices because of reduction in tax rates due to GST. We are extending our tax benefits to dealers who would then forward it to the end consumers," UltraTech Cement Chief Financial Officer Atul Daga told PTI.

Cement has been taxed at 28 per cent under the GST as compared to 30 to 31 percent in the previous system of taxation.

The reduction in prices would vary from state to state, he said, adding "whatever the difference in rates according to each market has been computed and the impact has been given the new prices".

In the national capital, a cement bag of 50 kg is currently available at around Rs 315.Rs 315.

When asked if cement demand would pick up following price reduction, he said it will be gradual depending on how housing construction and infrastructure development shape up.

Last month, ahead of GST implementation cement offtake by dealers had slowed down due to speculation over tax rates.

"That was a temporary reduction ... this will now convert into the cumulative purchase," Daga added.

Source: https://goo.gl/1gLrVn 

Wednesday, 21 June 2017

Dwarka expressway gets National Highway status

With this notification NHAI has also specified the speed limit of 80kmph on Dwarka Expressway, once completed the road will emerge as an alternate route between Delhi-Gurgaon


GURUGRAM: National Highways Authority of India (NHAI) finally issued notification granting national highway status to 28 km long Dwarka Expressway starting from Shiv Murti in Delhi to Kherki Daula in Gurugram. The notification has come after over a year of an announcement made by Union minister Nitin Gadkari to grant NH status to the expressway.

With this notification NHAI has also specified the speed limit of 80kmph on Dwarka Expressway, once completed the road will emerge as an alternate route between Delhi-Gurgaon and it is expected to reduce the traffic load on Delhi-Gurgaon expressway. The move is also expected to expedite the completion of this much-delayed project.

Following the request of Haryana chief minister Manohar Lal Khattar during Global Investor Summit in March 2016 union minister has announced to give NH status to the road. Later in May 2016, MoRTH has given in-principal approval to Dwarka Expressway, now finally NHAI has issued the notification in this regard.

Developers are excited about the development. “We welcome the move as this will allow a positive drift in the momentum for Gurugram's real estate market. NH status will boost infrastructure development of the area and likely to promote investment in new Gurugram,” said the director of Mapsko, Rahul Singla.

Terming it a landmark development, official spokesperson of Emaar India, said, “Expressway has great potential due to its proximity to international airport, NH8, and SPR.”

According to notification 28 km long Dwarka Expressway starts from Shiv Murti in Delhi on NH-8 passes through UER-II (parallel to Terminal-3 of Delhi Airport) up to Barthal Chowk (junction of Sector 25-26 Dwarka) then it will take left turn and go straight up to Kherki Daula in Gurugram and it culminates on NH-8, around one km before Khrki Daula toll plaza at SPR, CPR junction.

The 18.1 km stretch of the road is in Gurugram and rest in Delhi. In Gurugram only, around 1.4 km stretch in New Palam Vihar (around 1 km) and Kherki Daula village (around 400 meter) needs to be constructed. While in Delhi 6.5 km stretch from Shiv Murti to Bharthal Chowk is part of UER-II (no need for construction) and remaining 3.4 km stretch from Bharthal Chowk (junction of Dwarka sector 25-26) to Delhi-Haryana border needs to be constructed.

According to NHAI official for this 3.4 km stretch in Delhi, the authority has started land acquisition for 2.1 km stretch. Rest of the land is under DDA, which will be handed over to NHAI. “NHAI has started land acquisition process in Village Bamnauli and Bijawan. The total of around 24 hectares of land will be acquired to complete the Delhi portion of the expressway,” said the official.

The horizontal alignment of the road is designed for 80 kmph speed in general. The main carriageway is proposed to be of 8-lane with 3-lane service road on either side. At the intersections, flyover has been proposed. In order to avoid the traffic jam in future at crossing and junctions, NHAI will construct the underpass at such spots. “All the major crossroad including existing and proposed master road of sectors are supposed to have 4-lane underpasses for smooth movement of traffic,” said the official.

Source: https://goo.gl/4NVM3b

Saturday, 10 June 2017

How shopping malls can have a longer self life?

From roping in retailers such as Decathlon to re-configuring brands malls are forging deals to survive and some have even repositioned themselves to turn profitable













The mall business in India, stagnant for almost a decade, may now be seeing light at the end of the tunnel. Older malls are trying various strategies to stay afloat and attract new and fast-selling stores to take on snazzier, newer malls that have come up in their vicinity.

From roping in retailers such as Decathlon to re-configuring brands and squeezing existing shops to make way for new tenants, malls are forging deals to survive and some have even repositioned themselves to turn profitable.

In Mumbai, the 10-year-old Inorbit Mall revamped itself and offered a red-carpet deal to Swedish fashion retailer Hennes & Mauritz AB to compete with three-year-old Infinity Mall half a kilometer away. They shrank the floor space provided to Lifestyle and a couple of other stores and gave 20,000 square feet to Zara’s rival to drive footfalls.

“Inorbit saw an initial dip in footfalls of about 15% when Infinity came up in the vicinity,” said Susil Dungarwal, a retail and shopping mall specialist in Mumbai. “By taking proactive measures, they now have an average annual growth of 25-30%.” In Hyderabad, Manjeera Mall is getting sports store Decathlon with 10,000 square feet on the ground floor to attract customers after facing tough competition from three-year-old Sujana Forum Mall nearby.

Bengaluru-based Westgate Mall in Rajajinagar is getting Lifestyle and Home Center in a value outlet format with 10,000 square feet each. It had to re-position itself as a value mall after Orion Mall and Mantri Mall came up in the vicinity Malls are taking such steps when the retail industry lost 3.5 million square feet of space as five shopping centers shut down and 10 vacant ones were converted into offices, according to property consultant Jones Lang LaSalle.

With new malls such as Vega City in Bengaluru, The Pavilion in Pune and Grand Central Seawoods in Mumbai set to come up by 2020, JLL estimates the rivalry will only get stiffer. By the end of 2017, about a dozen malls might shut down, the consultant said.

Retailers, especially from the US and Europe, have been showing increasing interest in the India market, due to growing opportunities in this sector, real estate consultant CBRE said. Over 40 major international brands have entered the country over the past two years, CBRE said in a note in February.

Amid the flux in India’s retailing business, rentals for tenants in malls haven’t fallen. They typically increase by 15% every three years, according to industry experts. The lease period for an anchor store has remained unchanged at between 15 and 21 years, while for vanilla stores, the term has reduced from nine years to six years in some malls.

When a new mall comes up in the vicinity, the older shopping centers respond by differentiating their offerings and try to forge deals without affecting rentals. In one case, a mall in Bengaluru lured an anchor brand by offering to pay for doing up the interiors.

Malls are even getting in small retailers to differentiate their offerings. In Cochin, Oberon Mall suffered after the 1.5 million square foot Lulu Mall came up less than half a kilometer away, taking away customers and prompting retailers to vacate. The developers responded by spending about Rs 5 crore to revive the mall. They introduced Oberon Chanta, a collection of 20 small stores on the third floor, which previously housed a home furniture store.

Bengaluru-based Forum Neighbourhood Mall in Whitefield is focussing on getting lesser-known brands from tier-II cities to get an edge over VR Mall and Inorbit Mall in the neighborhood. Recently, the mall roped in Mysore-based hypermarket brand Loyal World. The management is now in talks with Mangalore-based brand Harsha Electronics. Total Mall in Bengaluru repositioned itself as a neighborhood mall that’s come to be known as Market Square since 2012. The mall was practically empty before that and it turned around in 2015 after Lighthouse Mall Management took up the project.

Ten-year-old Cosmos Mall in Bengaluru underwent a facelift and was repositioned as a neighborhood mall christened Brookfield Mall. Even after being in the right location, the mall was affected when Inorbit, Phoenix Market City, and VR Mall opened.

“It lacked design and cinema halls. In a 1.5 lakh square foot space, they just had Pantaloons and Taco Bell running like high street stores with their own entrances,” said Neeraj Duggal, managing director of Lighthouse Mall Management company. “Now 80% of the mall is operational with an Inox, new brands, pubs, and salons.”

REWORKING MALL MANAGEMENT

Experts said great mall management plays a significant role in maintaining footfalls and sales. According to Pankaj Renjhen, managing director of retail services at JLL India, developers have realized that good mall management and services like free parking, baby care room and a mall helpdesk are some ways to keep footfalls stable and boost growth in same-store sales.

He said F&B and entertainment contribute to about 15-20% of the total mall space compared with 5-10% three to four years ago. “Some malls are also going to the extent of getting fashion consultants on board to assist customers,” he said.

HOW TO REMAIN RELEVANT

Diwanshu Mittal, assistant vice president of retail at JLL, said there is a need for smaller malls to churn their brand mix and bring in new shops and stores to help them remain relevant. “Malls can also change their positioning and convert to a neighborhood center to cater to a particular catchment. For example, a Gold Souk or an F&B mall or a mall with big box retail,” he said. Experts said that with high streets across the country dying out, the neighborhood mall concept is booming.

Malls around the country are also getting in luxury brands to differentiate themselves. Select CityWalk in New Delhi is now a premium mall and houses brands such as Burberry, Armani, and AĆ©ropostale. Ambiance Mall in Gurgaon will welcome Michael Kors in a couple of months. Dungarwal said cities are reaching saturation point in terms of a number of shopping malls. “Mumbai has had no growth as there are no new malls since the last three years, although developers like Maker Group and Shapoorji Pallonji are planning to enter the mall industry,” he said.

Malls such as West End, TDI, CitySquare, and Westgate in New Delhi started about 10 years ago and have seen footfalls slide with the emergence of newer malls like the Pacific Mall in Subhash Nagar and Unity One Mall in Janakpuri. TDI gave a portion of their ground-floor space to Westside, which brought in significant footfalls but failed to bring back its former glory. These malls have limited branded stores and retail outlets, with mainly wine and beer shops and food outlets such as Wimpy’s, Burger King and Subway. Other than that, the buildings are relatively empty. Although some of them have movie theaters, they are hardly visited.

Experts said of the 450-plus malls in the country, 70% were low-grade malls. Even though new malls are coming up, they will be ready only by 2020-21.

Mittal said supply was very limited in New Delhi because only a few developers such as DLF, Unity Group, and Bharti invested in retail. Only one mall is coming up in the next two years in the capital – Vegas in Dwarka.

CONSUMERS ARE KINGS

With malls, everything counts, especially the perception of customers. Along with malls, customers have changed. Keeping in mind their necessities, they have learned to prioritize and visit malls according to time, availability and leisure.

Annie Varghese, a college student in New Delhi, used to visit CitySquare Mall in Rajouri Garden before its sheen faded. “The place lost its appeal as I grew older and they never had anything new to offer anymore,” she said.

Varghese now shops at Pacific Mall in Subhash Nagar, which houses brands such as Forever 21, Charles & Keith, Zara and the newly introduced Decathlon. “Apart from being closer to my home, Pacific has big brands, a food court with class and a great multiplex for movie buffs,” she said. Consumers in India tend to go for larger brands and better spaces with variety more than smaller spaces.

Purab Kulkarni, a banker and father of two from Noida, said visiting the new, big malls was an experience. “With the boom of world-known retail chains, brands, and activities, it has become a whole new experience. We can celebrate festivals here with our kids as the decorations and activities put up for shoppers are impressive,” he said. He added that Christmas was his favorite time to visit malls with his family. The growing popularity of online shopping is also a threat to retail malls.

According to Boston Consulting Group, while the number of stores may be still be increasing among best-practice retailers, overall productivity per store is stagnating— or declining. To meet this challenge, stores may have to be re-imagined to create richer shopping experiences that reflect their customers’ needs and shopping preferences, BCG said.

Source: https://goo.gl/gsaeMZ

Wednesday, 31 May 2017

Drive from Delhi’s Dwarka to Gurgaon to get smoother with underpass, flyover

Two underpasses and one flyover on NH-8 will make the commute between Dwarka, Vasant Kunj, Dhaula Kuan and Gurgaon smoother. The first underpass will connect the Urban Extension Road, the other help traffic from Dwarka going to Gurgaon. The flyover will come up for traffic from Dhaula Kuan

Commute to Dwarka from Vasant Kunj, Dhaula Kuan and Gurgaon will become smoother as the Delhi government has proposed two underpasses and a flyover on National Highway 8.

The Airports Authority of India (AAI) has, however, raised an objection over the height of the flyover as it is close to runway 29, one of the three runways at Delhi airport.

The first underpass will start from Vasant Kunj Sector C and connect the Urban Extension Road 2, passing under the Delhi-Gurgaon Expressway which runs parallel to the airport’s boundary wall and connects to Dwarka. This will be 3.2 km long.

The underpass will help commuters avoid taking the congested Mahipalpur road to go to Dwarka.

“We have proposed two bypasses southern access and northern access from Vasant Kunj. Under northern access, we are giving signal free access to the airport from Vasant Kunj with the help of two flyovers and one underpass. Under the southern bypass, commuters going to Gurgaon and Dwarka will be benefited,” said a PWD official.

The Public Works Department (PWD) had conducted the feasibility study of the project and has handed it over to National Highways Authority of India (NHAI). Once the NHAI’s work is done and the project gets no-objection from all agencies concerned, it will be handed back to PWD for execution.

An 800-metre long flyover is also proposed on NH-8 for the traffic coming from Dhaula Kuan and headed to Gurgaon.

“Giving right turn at the expressway would have hampered the traffic movement, a flyover was proposed so that traffic can turn right and go straight to Dwarka road, without affecting the vehicle flow on the expressway. The flyover will start soon after the Mahipalpur flyover,” the official said.

However, AAI has suggested some changes as flyover is close to the runway and the point where planes descend onto the runway.

The second underpass, which would be 800 meters long, will help commuters coming from Dwarka and headed to Gurgaon. Currently, they have to go towards Delhi and take a U-turn.

“This underpass will start from UER-II and will pass under the expressway and then merge with the NH-8 towards Gurgaon. So, the traffic from Dwarka to Vasant Kunj can take the first underpass and those wanting to go to Gurgaon can take the second underpass. While the first underpass will cater to traffic from both sides, the other two projects are for one-way traffic,” the official said.

After necessary approvals, the proposal will be placed before the Unified Traffic and Transportation Infrastructure (Planning & Engineering) Centre (UTTIPEC) before construction could start. The project will require at least 2-3 years to be made.

The Delhi government has also finalized the proposal of an underpass between Vasant Kunj and the airport. The Airports Authority of India (AAI) has given its go-ahead for the project, which the Public Works Department (PWD) hopes to complete before the end of 2019.

Apart from an underpass at National Highway 8, a flyover at the Vasant Kunj side and a flyover at the airport side has also been proposed, which will also cut travel time by 30 minutes.

Source: https://goo.gl/N88i0C