QBiz: Firms in a Fix Over GST MRP Rules; Krugman Raps Note Ban
Catch the latest from the world of business on QBiz.
1. GST: Consumer Goods Firms in a Fix Over MRP Sticker Rules
Packaged consumer goods makers such as Dabur India Ltd, Marico Ltd and Godrej Consumer Products Ltd are worried about the impact of new guidelines issued by the government on displaying the maximum retail price (MRP) of products under the new Goods and Services Tax (GST) regime.
Aimed at ensuring that companies and retailers have a way of dealing with older (so-called pre-GST) stock, and preventing profiteering, the guidelines, announced on Tuesday, allow companies to print, stamp, or use stickers to show the new MRP on a product package. They also insist that companies issue ads in at least two newspapers if they are raising the prices of any products – and that they feature both the new (post-GST) and old (pre-GST) MRPs on the new packaging.
2. Amazon Invests Rs 1,680 Crore More in Its India Unit
Amazon, the world’s biggest online retailer, has invested another Rs 1,680 crore in its Indian unit as part of its commitment to invest 5 billion dollars to expand its local business, which is locked in a battle with arch-rival Flipkart to dominate what is seen as the world’s last major unconquered Internet market.
Amazon Seller Services Pvt Ltd (Amazon India) received the funds last month, according to regulatory documents filed with the ministry of corporate affairs.
In June 2016, Amazon.com Inc had said it would invest an additional 3 billion dollars in India after the company exhausted its earlier investment pledge of 2 billion dollars made in 2014.
3. Paul Krugman Blames Note-Ban, RBI & Strong Rupee For Tepid Growth
Blaming the Modi government's note-ban, hawkish monetary policy of RBI and a strong rupee for the tepid growth, Nobel winning economist Paul Krugman on Wednesday said the 6 percent GDP expansion is "disappointing" for a country like India.
The noted American economist also questioned whether the favourable demographics which makes the country with the highest working age population in the world, would aid economic growth at all
"Your 6 percent growth is actually disappointing. You probably should be doing 8 or 9 percent," the economist said.
Unlike the advanced economies, it is "conventional macroeconomic issues" which are afflicting India, he said.
4. Insolvency Proceedings Against Essar Steel Stayed
In a move that could impede the Reserve Bank of India’s efforts to clean up the bad assets in the banking system, the Gujarat High Court has stayed further proceedings by the National Company Law Tribunal on the insolvency petition filed by the lenders against Essar Steel.
Though the stay is only relevant for Essar Steel, and that too till the court’s next hearing on 7 July, the other 11 companies named by the central bank under the Insolvency and Bankruptcy Code may take similar recourse if proceedings at the Tribunal are not allowed to continue by the High Court.
5. Jaitley Says Cleaning up Political Funding Next Big Reform After GST
After rolling out goods and services tax, the government will take up "cleansing" of political funding as its top priority, Finance Minister Arun Jaitley said on Wednesday.
"In the immediate future, after GST process is complete... We are looking forward for some major steps to be announced by which we want to cleanse the whole process of political funding," the minister said.
Noting that the current system of political funding, which has prevailed for over 70 years, does not bring any credit to the world's largest democracy, he said Prime Minister Narendra Modi has been insisting on this reform and it will be taken as a "top priority" as there is "strong public support" for it.
6. Perks, Gifts to Employees May Come Under GST
India Inc may have to deal with another avatar of GST – the tax may be applicable on senior executives’ big-ticket perquisites over and above those mentioned in the employment contract and on gift items of over Rs 50,000. However, companies should be able to claim input tax credit on these intracompany ‘transactions’.
Tax professionals ET spoke to said the rate may be in the 18-43 percent band, depending on the nature of the perk/gift. A finance ministry official, who did not wish to be identified, said an employer’s gifts to employees will be treated as supplies without any consideration and attract GST. However, companies are likely to be able to claim input tax credit on it.
Source: The Economic Times
7. Services PMI Rises to 8-Month High of 53.1 in June
With a sharp rise in new work orders, service sector activity is estimated to have expanded at its sharpest pace since last September. The Nikkei India Services PMI Business Activity Index rose to an eight-month high of 53.1 in June. It stood at 52.2 in May.
A reading above 50 indicates an expansion while anything below that mark denotes a contraction in activities.
The reading for the April-June quarter averaged at 51.8 and is the highest quarterly figure since the second quarter of 2016.
8. Singhania Family Groups Settle Property Dispute After 9 Years
Over nine years after an arbitrator divided their family properties three-way, the Singhania family groups, on Wednesday, brought the dispute to an end, with Raymond owner Gautam Singhania and others informing the Supreme Court that they have settled their wrangle among themselves.
Three Singhania family groups – Mumbai, Kolkata and Kanpur – were locked in dispute over shares in the premium properties, despite the arbitration award splitting it three-ways.
A bench of Justices Dipak Misra and AM Khanwilkar was apprised of the settlement, which took the statement on record and allowed the parties to approach the Bombay High Court for releasing their share of Rs 46 crore deposited with it by the Kolkata group.
Read the full story on The Quint.
9. Govt Asks Vedanta to Make a Buyback Offer For Cairn's 9.8% Stake
The government has asked Vedanta to make a buyback offer for Cairn UK’s 9.8 per cent equity in the company, attached by the tax department for non-payment of dues. The Anil Agarwal-led company is yet to get back to the government, according to sources.
The recovery was initiated after the Edinburgh-based Cairn UK failed to pay Rs 10,247 crore tax by 15 June on capital gains. The claim arose through a retrospective amendment to the Income Tax Act. This comes within four months of the Income Tax Appellate Tribunal (ITAT) upholding the demand of the income tax department.
Source: Business Standard
(The Quint is available on Telegram. For handpicked stories every day, subscribe to us on Telegram)
Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.