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October 30, 2017

India ships wheat to Afghanistan via Chabahar

  • Days after hosting U.S. Secretary of State Rex Tillerson, India on Sunday began shipment of wheat to Afghanistan through the Iranian port of Chabahar.
  • A press release from the Ministry of External Affairs (MEA) noted that the consignment would be the first to use the new route via Chabahar to access Afghanistan, even as India plans similar transfers in the coming months.
  • However, the use of Chabahar for wheat transhipment indicates the firming up of an alternative route to extend necessary support to Afghanistan, in the absence of overland transit rights by Pakistan.

Set up centres under all High Courts for vulnerable victims: SC

  • Vulnerable witnesses in criminal cases, often minor survivors of rape or victims of sex abuse, should testify without fear or intimidation in a conducive environment, the Supreme Court has said.
  • Concerned at the trauma these victims of crime face in conventional courtrooms, the Supreme Court has ordered the setting up of at least two vulnerable witnesses deposition centres in the jurisdiction of every High Court across the country within the next three months. The order upholds the right of vulnerable witnesses to be protected while testifying in court and is in consonance with international norms in these matters.
  • The Bench said eventually every district should have a special centre, which would provide vulnerable witnesses a friendly atmosphere to testify. The Supreme Court referred to the Delhi High Court’s initiative to set up vulnerable witnesses deposition centres and issuance of guidelines.
  • The practices include a screen or some arrangement by which the victim does not see the body or face of the accused; reducing cross-examination questions to writing and handing them over to the judge to be put to the victim in a language that is clear and not embarrassing; and sufficient breaks for victims of child abuse or rape while testifying.
  • The Bench recommended that the high courts trigger the initiative with at least two centres in the next three months. But they must not stop with that and continue to set up more such centres.

GoM for composition scheme tax cut

  • The Group of Ministers set up to make the GST composition scheme more attractive on Sunday suggested lowering tax rates for manufacturers and restaurants under the plan to 1%.At present, while manufacturers pay GST at 2%, the rate for restaurants is 5%. Traders currently pay 1%.
  • The GoM, headed by Assam Finance Minister Himanta Biswa Sarma, has also suggested doing away with the tax rate distinction between AC and non-AC restaurants (those that are not covered under the composition scheme) and tax them at 12%.Currently, GST is levied at 12% on non-AC restaurants, while it is 18% for air-conditioned ones.
  • It also suggested that hotels which have a room tariff of more than Rs. 7,500 should attract 18%, down from the current 28%. The composition scheme is open to manufacturers, restaurants and traders whose turnover does not exceed Rs. 1 crore. This threshold was earlier Rs. 75 lakh and the GST Council earlier this month raised it to Rs. 1 crore from October 1.
  • With regard to traders, the GoM suggested a two-pronged approach for taxation under the scheme.
  • For the year ending March 2018, the government had budgeted Rs. 9.68 trillion collection from customs and GST. However, the official of the Central Board of Excise and Customs (CBEC) made it clear that there was no plan to revise the revenue collection target for the year.

A court to fix all investor-state rows?

  • Embroiled in 22 arbitration proceedings against it in disputes with prominent global investors, including Vodafone and Cairn Energy, India has cautiously welcomed a proposal to establish a ‘World Investment Court’ (WIC).
  • The World Court, a plan pushed mainly by the European Union (EU), is to be a “permanent, independent, legitimate, accountable, consistent and effective” global body framework with a mechanism for appeal as well, to resolve the current and future investor-State disputes including the ones that India is/could be involved in.
  • The matter is coming up for discussion next month at the United Nations Commission on International Trade Law (Uncitral), of which India is a member along with 59 other nations representing ‘various geographic regions and the principal economic and legal systems of the world’. The Uncitral works on the ‘modernisation and harmonisation’ of international business rules.
  • Currently, such disputes are being dealt with by the Investor-State Dispute Settlement (ISDS) regime, but with varying provisions in more than 3,300 International Investment Agreements (IIA) — including Bilateral Investment Treaties (BIT) and Treaties with Investment Provisions (TIPs). India had inked 83 BITs, and is a party to 13 TIPs.
  • As per the Uncitral, the ISDS regime was created to enhance confidence in the stability of the investment environment. The regime is used to solve investor-State disputes in a neutral and flexible manner. Uncitral said the ISDS provisions in investment treaties vary, with some providing for ISDS in any dispute arising from the investment concerned, and others restricting ISDS to claims arising from breach of certain treaty provisions, or to claims relating to ‘expropriations’ (or measures including nationalisation).
  • Global think-tank OECD said, “Such variation…is likely to both motivate and complicate possible harmonisation of international investment law. It may also affect the apparent consistency of arbitral awards, and increase arbitration costs…” India, in its reply to the Uncitral questionnaire, had also said, “One of the drawbacks of the current landscape of BIT arbitrations is the number of inconsistent or even contradictory awards…”
  • The WIC — alternatively called ‘International Tribunal for Investments’ or ‘Multilateral Investment Court’ — is proposed to “replace or supplement” this ISDS arbitration regime in investment treaties.
  • According to the EU Trade Commissioner Cecilia Malmström, “This system [ISDS] has operated for more than forty years: and the main beneficiaries are EU investors, who bring over half of the world’s ISDS cases. But ISDS is old-fashioned and it is far from perfect.”