QBiz: GST Panel’s Return Filing Breather; Car Crunch for Ola, Uber

QBiz: Business news from across the country!

5 min read
Finance Minister Arun Jaitley on Friday announced the GST rate structure agreed among all the GST Council members. (Photo: PTI)

1. GST Council Gives Return Filing Breather to India Inc for 2 Months

Amid doubts in some quarters over the tech preparedness for the goods and services tax (GST), the high-powered GST Council on Sunday decided to introduce the new indirect tax system from the midnight of 30 June-1 July, but gave a relaxed timetable and exemption from penalties and late fees to industry while filing returns in the first two months.

However, some states expressed fears that the relaxation given on filing returns would lead to a revenue loss for them.

“We don’t have the luxury of time to defer the implementation of the GST... The official launch of the GST would take place on the midnight of 30 June-1 July,” Union Finance Minister Arun Jaitley told reporters after a five-and-a-half-hour meeting of the Council, whose chairman he is.

(Source: Business Standard)

2. GST Countdown: 52% of Small Businesses Expect Prices to Rise, Shows BloombergQuint Poll

The 11 June meeting of the Goods and Services Tax Council brought good news for small and medium enterprises – an increase in the threshold of the Composition Scheme, the upper limit of which was Rs 50 lakh. Enterprises earning a revenue or turnover below that were liable to pay GST at 1 percent in the case of trading, 2 percent for manufacturing and 5 percent for restaurants. While the rates have been maintained, the GST Council raised the threshold to Rs 75 lakh.

Experts had told BloombergQuint that this will reduce the financial and compliance burden on small businesses. But is it enough? To get a sense of that, on BloombergQuint’s special series, GST Countdown, we polled 65 small businesses across the Chandni Chowk, Chawri Bazaar, Greater Kailash and South Extension markets in Delhi and Bandra, Worli, Dadar, Fort and Masjid Bunder markets in Mumbai.

(Source: BloombergQuint)

3. Foreign Investors Stay Glued to Indian Market; Invest $3.55 Billion in June

Foreign investors have pumped in a staggering $3.55 billion in the Indian capital market this month so far due to finalisation of Goods and Services Tax (GST) rates for bulk of the items and forecast of a normal monsoon.

Interestingly, most of the funds have been invested in debt markets by foreign portfolio investors (FPIs).

"The differential spread between 10-year bond yields in the U.S. and India is still around 4.5-5 percent. This, coupled with stable outlook for the Indian currency bodes well for FPI flows into debt market," Sharekhan Head Advisory Hemang Jani said.

(Source: BloombergQuint)

4. Sebi May Make Acquisition of Distressed Assets Stress-Free

The Securities and Exchange Board of India (Sebi) is set to ease rules of acquisition to make it more attractive for investors to buy distressed companies from banks amid the renewed push to resolve banks’ bad loan burden by the government and the Reserve Bank of India (RBI).

The regulator has been granting exemptions to banks acquiring the stock of listed distressed companies. This includes relaxing the pricing formula for making an open offer to public shareholders and lock-in requirements, among other things.

(Source: Economic Times)

5. DoT Asks FinMin to Slash Telecom Revenue Target by 40%

The financial stress in the telecom industry is set to reflect in the revenues flowing into the government exchequer during the current financial year (FY2017-18). The Department of Telecommunications (DoT) has expressed its inability to meet its revenue target of Rs 47,305 crore for FY18 and has asked the finance ministry to revise the projection to Rs 29,524 crore – almost a 40 per cent fall.

In a letter to the finance ministry, reviewed by Business Standard, the DoT has said given the severe financial stress in the telecom sector and rapidly declining revenues of all major operators, the revenue targets for the DoT for FY18 would require a downward revision. The DoT had earlier projected an FY18 revenue target of Rs 46,351 crore, which was revised upward by the finance ministry to Rs 47,305 crore.

(Source: Business Standard)

6. Builders Bet on Affordable Housing Amid Realty Slowdown

A slew of developers have lined up robust expansion and investment plans for affordable housing this year, despite the prolonged slowdown in real estate.

Not only large realty firms, but also mid-sized ones are betting big on building and selling homes in the Rs 20-60 lakh segment, propelled by demand from homebuyers and encouraging government tax incentives.

Shapoorji Pallonji Real Estate plans to invest Rs 600 crore on buying land parcels this year to build a pipeline of projects. These are in National Capital Region (NCR), Hyderabad, Bengaluru and possibly a fourth, in Maharashtra. It is also planning to launch a project in Hinjewadi, Pune by the end of the year.

(Source: Livemint)

7. Ola, Uber Cab Supply Fell Nearly 25% in March Quarter, Says Report

Ride-hailing services Ola (ANI Technologies Pvt. Ltd) and Uber Technologies Inc are facing a crunch in supply of cars, with the number of vehicles affiliated to their platforms dropping by almost 25% in the March quarter from the preceding three months, according to a report by RedSeer Management Consulting Pvt. Ltd.

The report suggests that cab supply peaked in the December quarter since January last year to approximately 5,00,000 vehicles, before plummeting to about 380,000 vehicles in the March quarter, largely because of a fall in incentives for drivers, prompting them to either explore other driving jobs or quit entirely.

(Source: Livemint)

8. Government Limitations in Job Creation

The issue of employment is a subterranean rumble underlying the daily rhetoric of Indian politics. Frequently, it grows in volume to dominate the discourse. This is such a moment. The Congress reacted to the Narendra Modi government’s completion of three years in office with an attack revolving around its alleged failure to create enough jobs.

Bharatiya Janata Party (BJP) President Amit Shah responded with practised whataboutism, noting that if the Congress had paid similar attention to the issue during its time in power, it would not have suffered such electoral reverses over the past few years.

This may be true; it is certainly irrelevant. It is an apt time, however, to consider an important question: What effect can the government actually have on job creation?

(Source: Livemint)

9. Centre Removes Interstate Supply Charges on Solar Power Projects Till December 2019

Solar power projects will be exempted from interstate transmission charges till the end of December 2019, making it feasible to compete with thermal power.

The decision was taken by the ministry of power in consultation with the ministry of new and renewable energy (MNRE) and other stakeholders since imposition of charges would have raised cost of using solar power from another state by Rs 1-2.50 per kwH, depending on the distance it is transmitted and voltage at which it is supplied.

(Source: Economic Times)

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