Govt Eases FDI Rules, Govt Panel Proposes Revisions to Income Tax Slabs and Rates, Apple to directly sell iPhones in India Soon

Govt eases FDI rules; relaxes sourcing norms for single-brand retailers, allows 100% foreign direct investment in contract manufacturing. Apple to directly sell iPhones in India online soon. Government panel on Direct Tax Code proposes revisions to income tax slabs and rates. RBI releases annual report for FY19. Valuation methodology for foreign exchange gains may have changed, analysts say. Google severs one of its last links with China. Google faces another EU antitrust investigation – this time, over its job search tool. PM Boris Johnson gets Queen’s assent to prorogue Parliament till 14 October. Trump and Johnson are “gung-ho” about a post-Brexit UK-US trade deal.

 

 FDI 
 
Govt eases FDI rules; relaxes sourcing norms for single-brand retailers, allows 100% foreign direct investment in contract manufacturing. Apple to directly sell iPhones in India online soon. 
 
 
All’s Well That Ends Well: In a bid to attract overseas players and provide the slowing Indian economy with the much-needed fillip, the government announced a slew of reforms in Foreign Direct Investment (FDI).
 
 
As part of the reforms, the government has permitted 100% foreign investment in coal mining and contract manufacturing, eased sourcing norms for single-brand retailers and approved 26% overseas investment in digital media. 
 
 
More on this here
 
 
A Bigger Bite for Apple: The government also eased rules that forced companies such as Apple to source 30% of their production locally. Following this, the tech giant will start selling iPhones directly to Indian consumers through its own online store.
 
 
Currently, Apple has online sales partnerships with Amazon, Flipkart and Paytm Mall. 
 
 
In addition to this, Apple has also decided to set up its iconic brick-and-mortar Apple Store in Mumbai over the next 12-18 months.
 
 
 TAXES 
 
 
Government panel on Direct Tax Code proposes revisions to income tax slabs and rates.
 
 
Sprucing It Up: A government-appointed task force on Direct Tax Code has proposed radical revisions to the personal income tax rates and slabs, which could replace the existing Income Tax Act.
 
 
It has suggested zero tax levy on annual income between Rs 0-2.5 lakh, 10% on income between Rs 5 -10 lakh, and 20% on income of Rs 10 to 20 lakh. Annual income above Rs 20 lakh and up to Rs 2 crore is proposed to be taxed at 30%.
 
 
Currently, personal income is taxed at 5% for income between Rs 2.5 to Rs 5 lakh, at 20% for income between Rs 5 lakh and Rs 10 lakh, and 30% for an income of over Rs 10 lakh.
 
 
 
Give Me My Money Back: Filed your income tax return for this year yet? Here are 5 things you can do to speed up the refund of income tax.
 
 
 RBI 
 
RBI releases annual report for FY19. Valuation methodology for foreign exchange gains may have changed, analysts say.
 
 
Annual Review: The RBI released its annual report for FY19 today. It analysed the working and operations of the Central Bank and suggested ways to boost economic performance.
 
 
As per the report, the RBI's funds have dipped to INR1.96 lakh crore after the fund transfer to the government (it was INR2.32 lakh crore in June 2018). The RBI said there is a need to revive private investment, there is a dip in domestic demand, and there has been a credit crunch owing to the crisis in the NBFC sector.
 
 
The report in its entirety can be read here.
 
 
Long Time Coming: The valuation methodology for foreign exchange gains generated through interventions might have been changed, along with doing away with provisioning requirements, analysts say. This change, a long time coming, may have benefited the Central Bank by c. INR20,000cr-INR21,000cr. More here.
 
 
 
 GOOGLE 

Google severs one of its last links with China. Google faces another EU antitrust investigation – this time, over its job search tool.
 
 
Google Says “Bye Bye, Beijing”: Most US tech companies have a strong presence in China, given its reputation in the global supply chain and as a manufacturing hub. Except for Google, whose reliance on the country has always been minimal. In recent months, the US-China trade war motivated the Alphabet-owned company to start moving its facilities to sunnier shores.
 
 
Now, it has emerged that Google will be severing one of its last ties with China. It will shift production of its Pixel manufacturing unit to the Vietnamese province of Bac Ninh. (Moreover, Google isn’t the only company looking to shift from China to Vietnam, and any move to replace supply chains built over several decades is a challenge to replicate.)
 
 
Google Says “Oh No, Not Again”: Earlier this year, an EU antitrust investigation into Google’s “abusive practices” ended with the company shelling out $1.7bn in fines. Today, Alphabet is suffering from a bout of déjà vu. European regulators are checking to see if Google has been unfairly highlighting its own job search tool “Google for Jobs” to drive out competitors.
 
 
 
 BREXIT UPDATE 

PM Boris Johnson gets Queen’s assent to prorogue Parliament till 14 October. Trump and Johnson are “gung-ho” about a post-Brexit UK-US trade deal.
 
 
Brexit’s Hit the Fan: Boris Johnson can’t wait to get Britain out of the EU. MPs are scheduled to meet in Parliament on Tuesday. But they’ll work for less than a week. Because yesterday, the Queen consented to Johnson’s request to prorogue Parliament for 23 days from 10 September to 14 October.
 
 
BRBrexit: While Johnson downplayed his request – proroguing Parliament is not unheard of – the timing is telling. Brexit is due on October 31, which means MPs would have a little more than two weeks to deliberate on any deal Johnson’s government could negotiate with the EU. And if the UK heads for a no-deal exit (something Johnson’s a fan of), MPs now have even less time to block such an occurrence.
 
 
It’s A Special Relationship: As Britain prepares to (finally) leave the EU, its government prepares to amp up efforts to secure fruitful bilateral trade deals with other countries. In special focus is a possible deal with the US, the UK’s largest trading partner. Trump and Johnson said they’re very “gung-ho” about a “very big trade deal” at the recently concluded G7 summit in France. Indeed, a high-quality post-Brexit deal would be transformative.
 
 
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