QBiz: New GST Rules Pushing Up Cash Payments & More
Here’s the top business news of the day.
1. New GST Rules Are Boosting Tax Payments In Cash
A new rule on businesses adjusting their final GST liability against credit for taxes already paid on raw materials and services is pushing up their tax payments made in cash, experts say.
The amendments to central and state GST laws made in 2018 and brought into effect from February 2019 have the unintended consequence of certain tax credits getting piled up without getting used for meeting the final tax liability of businesses, they said.
2. Niti Aayog To Identify Non-Core Assets Of CPSEs For Sale
Niti Aayog has been tasked with drawing up a list of non-core assets of various Central Public Sector Enterprises, both healthy and sick ones, as a first step towards finance ministry's plan to monetise such assets and unlock value to shareholders.
This is part of the government’s plan to lay down procedure and mechanism for monetisation of non-core assets of central public sector undertakings, which include mainly land and buildings.
3. ICICI Bank-Videocon Case: ED Grills Kochhars, Venugopal Dhoot
Banker Chanda Kochhar and her husband Deepak Kochhar were grilled by the Enforcement Directorate for the second consecutive day in Mumbai under the ICICI Bank-Videocon Prevention of Money Laundering Act (PMLA) case, the Indian Express reported. The law enforcement agency also separately questioned Videocon’s Chairman Venugopal Dhoot.
Kochhar and her husband had appeared before the ED office yesterday. However, Kochhar left the ED office later as she was asked to operate her bank lockers by the agency, as part of their probe, the Indian Express quoted sources familiar with the development.
While Dhoot left the ED office around 11.30 PM, Deepak Kochhar was questioned till late night for the investments received by NuPower Renewables Pvt Ltd from various domestic and foreign firms. ED also recorded the statements of some of Kochhar and her husband’s relatives.
(Source: Financial Express)
4. Reliance’s Mukesh Ambani Acquires Two More Startups To Get Ready For E-Commerce Play
Business magnate Mukesh Ambani seems to be developing a penchant for partnering with startups. Textile-to-telecom giant Reliance Industries has now entered into agreements to acquire two startups, first, last mile logistics delivery service Grab A Grub and second, software services firm C-Square Info Solutions.
Around a week back, it had entered into agreements to acquire three startups – language localisation technology platform Reverie Language Technologies, software-as-a-service startup Easygov, software simulation services company SankhyaSutra Labs, according to regulatory filings and media reports.
The acquisitions follow Ambani’s plan to enter around $36 billion India’s e-commerce market dominated by foreign rivals such as Amazon and Walmart.
(Source: Financial Express)
5. Cash Subsidies Will Now Directly Reach Farm Exporters’ Bank Accounts
The government has decided to directly transfer cash subsidies into bank accounts of farm produce exporters, in an attempt to make Indian agricultural produce globally competitive and boost exports of branded farm products, officials with direct knowledge of the matter said on condition of anonymity.
The scheme came into effect on March 1 and will be valid till March 31, 2020. Depending on the response, it could be extended, the officials added.
In order to make the process transparent and plug any leakages in distribution of the subsidy, the government has decided that the scheme will provide transportation and marketing assistance through direct bank transfer, the officials said.
(Source: Hindustan Times)
6. Amazon Brings Kudumbashree Women Entrepreneurs’ Products Online To 150 Million Customers
Among the world’s largest women empowerment programmes, Kerala’s Kudumbashree is set to have its women entrepreneurs slingshot their reach to millions of online shoppers in India. The organisation, which signed an MoU with Amazon recently, would be able to leverage the latter’s scale and reach to showcase and sell the women entrepreneurs’ products across the country. Amazon India reportedly had around 150 million registered users till January this year.
Amazon will showcase the products as part of its Amazon Saheli programme – a dedicated storefront on Amazon’s marketplace portal to help display and sell products of women entrepreneurs.
Women entrepreneurs including housewives, domestic helpers, artisans etc., are part of the Saheli programme that have products listed across 13 categories on Amazon.
(Source: Financial Express)
7. Trump Calls India “High-Tariff Nation”, Wants Mirror Tax
India is a very high-tariff nation, US President Donald Trump alleged on Saturday, stating that he wants a reciprocal tax or at least some kind of tax.
"India is a very high-tariff nation. They charge us a lot," Trump said in his address to the Conservative Political Action Conference (CPAC) in the Maryland suburb of Washington DC.
In his speech that lasted for more than two hours, Trump touched a wide range of issues including domestic, global and bilateral relationship with countries like India.
Referring to his often-cited example of the iconic Harley-Davidson motorcycles, he said, "When we send a motorcycle to India, it's a hundred per cent tariff. They charge 100 per cent when India sends a motorcycle to us, we brilliantly charge them nothing."
"So, I want a reciprocal tax or at least, I want to charge a tax. It's called the mirror tax, but it's reciprocal," Trump asserted.
(Source: The Economic Times)
8. JSW Steel Will Have To Go Solo For Acquisition Of Bhushan Power, For Now
JSW Steel Ltd will not be able to seek an equity partner in the initial stage of its acquisition of bankrupt Bhushan Power and Steel Ltd (BPSL), said a senior company executive.
Recent rulings by courts under the Insolvency and Bankruptcy Code (IBC) state that the structure of a resolution applicant, whether as an individual or a consortium, has to be maintained from the time of submitting an expression of interest till the completion of the deal, M.V.S. Seshagiri Rao, joint managing director and group chief financial officer, JSW Steel said in an interview last week.
JSW Steel made the highest bid for BPSL, with an upfront cash payment of ₹19,350 crore to the lenders of BPSL, and an equity infusion of ₹350 crore to revive the steel mill’s operations. In early February, JSW Steel received the Letter of Intent from the resolution professional, recommending the sale of the distressed plant to the Sajjan Jindal-promoted steel major. The transaction is awaiting the approval of the National Company Law Tribunal (NCLT)
9. FPI Net Inflows In Stocks Hit 15-Month High Of Rs 17,220 Crore In February
Foreign investors poured in close to Rs 17,220 crore on a net basis into Indian equities in February this year, the highest since November 2017, amid clarity on government’s spending plans and positive sentiments.
Foreign portfolio investors had pumped in a net amount of around Rs 19,728 crore into Indian stocks in November 2017.
As per the latest data from the depositories, foreign investors pumped in Rs 1,17,899.79 crore into equities and pulled out Rs 1,00,680.17 crore in February, a net investment of Rs 17,219.6 crore into the stock market.
In the previous month (January 2019), however, foreign portfolio investment outflows from equities stood at Rs 5,263.85 crore.
Foreign investors have turned into net buyers in February mainly on account of clarity on government’s spending post budget and value buying in several pockets, according to Vidya Bala, head of Mutual Funds Research at FundsIndia.
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