China-Taiwan relations

(GS-II: India and its neighbours)

In News:

The European Parliament’s first official delegation to Taiwan has come in support of Taiwan and said that the diplomatically isolated island is not alone. It called for bolder actions to strengthen EU-Taiwan ties as Taipei faces rising pressure from Beijing.

Need for:

Taiwan, which does not have formal diplomatic ties with any European nations except tiny Vatican City, is keen to deepen relations with members of the European Union.

Also, China has ramped up military pressure, including repeated missions by Chinese warplanes near democratic Taiwan, which Beijing claims as its own and has not ruled out taking by force.

China- Taiwan relations- Background:

China has claimed Taiwan through its “one China” policy since the Chinese civil war forced the defeated Kuomintang, or Nationalist, to flee to the island in 1949 and has vowed to bring it under Beijing’s rule, by force if necessary.

While Taiwan is self-governed and de facto independent, it has never formally declared independence from the mainland.

Under the “one country, two systems” formula, Taiwan would have the right to run its own affairs; a similar arrangement is used in Hong Kong.

Presently, Taiwan is claimed by China, which refuses diplomatic relations with countries that recognise the region.

Indo- Taiwan relations:

Although they do not have formal diplomatic ties, Taiwan and India have been cooperating in various fields.

India has refused to endorse the “one-China” policy since 2010.

Edible oil prices

(GS-III: Major crops cropping patterns in various parts of the country)

In News:

The prices of most major cooking oils have dropped and stabilised across the country in the run-up to Diwali.

Reasons for the drop in prices:

Stabilisation of global prices.

Duty cuts.

Cut in wholesale prices by major private players.

Stock limits imposed by the Centre, using the provisions of the Essential Commodities Act.

What led to increase in oil prices previously?

Global commodity prices are extremely high. COVID-19 is a major factor, disrupting supply chains, closing down industries.

There is insufficient labour in the oil production industry in many countries.

Excessive buying of edible oil by China.

Many major oil producers are aggressively pursuing biofuel policies and diverting their edible oil crops for that purpose.

Governmental taxes and duties also make up a major chunk of the retail price of edible oils in India.

India’s Dependence on Edible Oil:

India is the world’s biggest vegetable oil importer.

India imports about 60% of its edible oil needs, leaving the country’s retail prices vulnerable to international pressures.

It imports palm oil from Indonesia and Malaysia, soyoil from Brazil and Argentina, and sunflower oil, mainly from Russia and Ukraine.

Facts about Edible Oils:

Primary sources of Edible oil (Soybean, Rapeseed & Mustard, Groundnut, Sunflower, Safflower & Niger) and secondary sources of Edible Oil (Oil palm, Coconut, Rice Bran, Cotton seeds & Tree Borne Oilseeds).

In India major challenges in oilseed production is

• Growing in largely rain-fed conditions (around 70% area),
• high seed cost (Groundnut and Soybean),
• small holding with limited resources,
• low seed replacement rate and low productivity.

What is Input Tax Credit (ITC)?

(GS-III: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment)

In News:

The Central Board of Indirect Taxes and Customs (CBIC) has come out with norms on blocking of tax credit by GST field officers, saying that such blocking should be on the basis of ‘material evidence’ and not just out of ‘suspicion.’

New Norms:

The norms laid down five specific circumstances in which such credit could be blocked by a senior tax officer. These include invoices on which GST has not been paid by sellers.

The commissioner or an officer authorised by him, not below the rank of assistant commissioner, must form an opinion for blocking of input tax credit (ITC) only after ‘proper application of mind’ considering all the facts of the case.

What is Input Tax Credit (ITC)?

It is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale.

In simple terms, input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs and pay the balance amount.

Exceptions: A business under composition scheme cannot avail of input tax credit. ITC cannot be claimed for personal use or for goods that are exempt.

Concerns over its misuse:

There could be possibility of misuse of the provision by unscrupulous businesses by generating fake invoices just to claim tax credit.

As much as 80% of the total GST liability is being settled by ITC and only 20% is deposited as cash.

Under the present dispensation, there is no provision for real time matching of ITC claims with the taxes already paid by suppliers of inputs.

Currently there is a time gap between ITC claim and matching them with the taxes paid by suppliers. Hence there is a possibility of ITC being claimed on the basis of fake invoices.

Hamas and Gaza Strip

(GS-II: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora)

In News:

Egypt is seeking to reach an agreement on a cease-fire between Israel and the Palestinian resistance group Hamas in Gaza.

The Agreement includes:

Long-term cease-fire, a prisoner swap, humanitarian aid to Gaza and reconstruction.

Who are Hamas?

Hamas is a Palestinian Islamist political organization and militant group that has waged war on Israel since the group’s 1987 founding, most notably through suicide bombings and rocket attacks.

It seeks to replace Israel with a Palestinian state. It also governs Gaza independently of the Palestinian Authority.

Need for an agreement:

Gaza has been under a tightened Israeli blockade since 2007 in which most basic goods still enter the region under highly restricted measures.

In May, an Israeli offensive left nearly 260 Palestinians dead and thousands wounded as well as a vast trail of destruction in Gaza. Palestinian resistance groups responded with rocket barrages into Israeli areas, killing at least 13 Israelis.

Where is the Gaza Strip?

The Gaza Strip is an entirely artificial creation that emerged in 1948 when roughly three-fourths of Palestine’s Arab population was displaced, in some cases expelled, during the course of Israel’s creation. And most of the refugees, they were sort of scattered across the region in neighboring countries like Jordan, Syria and Lebanon.

Some went to the West Bank, which came under Jordanian rule after 1948. And a very large number went to the Gaza Strip, which is this tiny little coastal strip between Egypt and what is now Israel. Today, the population of Gaza, about 70% of Gaza’s population are refugees.

Who controls it?

Hamas forcibly took control over the Gaza Strip in 2007. Shortly thereafter, the Israelis imposed a complete closure on Gaza’s borders. They declared Gaza to be an enemy entity. Of course, Gaza is not a state.

Hamas, of course, is viewed by Israel and by much of the international community as a terrorist organization, including the United States, for their history of attacks on civilians and so forth.

Present scenario:

Israel still occupies the West Bank, and although it pulled out of Gaza the UN still regards that piece of land as part of occupied territory.

Israel claims the whole of Jerusalem as its capital, while the Palestinians claim East Jerusalem as the capital of a future Palestinian state.

The US is one of only a handful of countries to recognise Israel’s claim to the whole of the city.

What’s happening now?

Tensions are often high between Israel and Palestinians living in East Jerusalem, Gaza and the West Bank.

Gaza is ruled by a Palestinian militant group called Hamas, which has fought Israel many times. Israel and Egypt tightly control Gaza’s borders to stop weapons getting to Hamas.

Palestinians in Gaza and the West Bank say they’re suffering because of Israeli actions and restrictions. Israel say it is only acting to protect itself from Palestinian violence.

Things have escalated since the start of the holy Muslim month of Ramadan in mid-April 2021, with nightly clashes between police and Palestinians.

The threatened eviction of some Palestinian families in East Jerusalem has also caused rising anger.