QBiz: Amazon to Invest $500 mn FDI in Food Retail, And More

The Quint brings to you important business stories from the previous day.

The Centre has officially approved US e-commerce giant Amazon’s proposal to invest $500 million in the retail of food products in India. (Photo: iStock)

1. With Nod for $500 Million Food Retail FDI, Amazon Set to Take on Big Basket

The Centre has officially approved US e-commerce giant Amazon’s proposal to invest $500 million in the retail of food products in India.

The Department of Industrial Policy & Promotion (DIPP) — the nodal body for the retail sector — decided to greenlight Amazon’s proposal at a meeting last week, a government official told BusinessLine.

A formal letter from Commerce and Industry Minister Nirmala Sitharaman, permitting Amazon to start food retailing, was issued on Monday.

Amazon had applied for permission to bring FDI into the food retail sector a few months ago, but the proposal was held up because of the Centre’s decision to dismantle the Foreign Investment Promotion Board.

Source: The Hindu BusinessLine

2. High-Income Taxpayers to Get Priority Treatment and Extra Facilities

The Central Board of Direct Taxes (CBDT) has begun work on a plan based on the recognition that 80 percent of India’s direct tax is paid by 20,000 individuals and entities.

There is a strong view in government circles that they be accorded better treatment along the lines of priority customers, an official said.

Such a priority taxpayer will be able to meet a tax official across the table to resolve questions over liability.

Source: Economic Times

3. Government Defends 12% Tax On Sanitary Napkins Under GST

The tax on sanitary napkins under Goods and Services Tax is the "same or less" than the previous indirect tax regime, the government clarified following protests in several parts of the country and on social media.

Under GST, sanitary pads are being taxed at 12 percent compared to 13.68 percent earlier, the Ministry of Finance said in a media statement.

The government argued that raw material used for manufacturing sanitary napkins attract between 12 to 18 percent GST, which would mean that manufacturers will pay more tax than they collect from customers.

Source: BloombergQuint

4. GST Impact on Real Estate: Rental Income Beyond Rs 20 Lakh to Attract Tax

Rental income from residential property has been exempt from the GST but any earning over Rs 20 lakh annually from renting or leasing for commercial purposes would attract the levy.

Revenue Secretary Hasmukh Adhia said that if the house property is rent out for shop or office purpose, no Goods and Service Tax (GST) will be levied up to Rs 20 lakh.

Rental income received from residential house is exempt. But if you have given your unit to commercial enterprise, then it is taxable if you are getting more than Rs 20 lakh as rent.

Source: Financial Express

5. Global Carriers, PE Firms Join Race to Acquire 24% Stake in Jet Airways

Global carriers Lufthansa and KLM-Air France, bulge bracket private equity funds including the Blackstone Group, KKR & Co and TPG Capital have joined the race along with US airlines Delta to invest around $200-250 million in India's second largest airline, Jet Airways.

Jet Airways is looking to raise capital to fund operations, face growing competition amidst severe macro headwinds, said multiple sources in the know.

Jet Airways, in which Abu Dhabi's Etihad Airways owns a 24 percent stake, has adopted a network strategy independent of its investor and has roped in JP Morgan to raise funds, including through a possible stake sale.

However talks with the potential investors are not yet advanced and no binding offers has come in, the sources mentioned above cautioned.

Source: Economic Times

6. Flipkart May Woo Snapdeal With Revised Bid After Rejection of $800 Mn Offer

Online marketplace biggie Flipkart is all set to revise its bid to buy Snapdeal after the latter’s board of directors rejected the first offer of nearly $800 million.

The bid which might be sent in the next few days would be close to the Snapdeal board’s demand of a billion dollars, sources close to the board said.

They added that if the terms are accepted, the deal would be completed within a month or so.

Source: Business Standard

7. Uncertainties Cloud Tata Group, Bharti Airtel Alliance, Says Report

Amid reports of a mega alliance between Tata group and Bharti Airtel involving their telecom, overseas cable, enterprise services and DTH businesses, there are a lot of issues that may have to be addressed.

According to a report by Bank of America Merrill Lynch, uncertainties remain on a host of issues. First, will Bharti take on Tata’s $4.5-billion debt?

Second, what will happen to the government’s 26 percent stake in Tata Communications? Lastly, delisting of Tata Communications.

The report said Bharti would have a market share of 40 percent in the cellular space if the deal went through.

Source: Business Standard

8. Tesla Rolls out Its First Model 3, and It Belongs to Elon Musk

It’s finally here: The Model 3, Tesla’s $35,000 electric game changer. A single black Model 3 rolled off the production line Friday with a serial number all its own, kicking off a company-defining six months. The car will belong to Elon Musk, Tesla’s CEO and co-founder, who shared images of it on Twitter over the weekend.

Tesla has already taken in roughly half a billion dollars in Model 3 deposits, at $1,000 apiece, and its proposed ramp-up schedule would have it rivaling well-established US market peers like BMW and Mercedes by year’s end.

The only thing standing between Tesla and being the world’s first mass-market electric carmaker is proving it can build, deliver, and service enormous numbers of these vehicles – without sacrificing quality.

Source: Livemint

9. Google Awaiting RBI Nod to Begin Service in UPI

Technology giant Google has completed the testing of its Unified Payments Interface (UPI) payment service and is awaiting Reserve Bank of India's (RBI) approval to launch its service in the country, the National Payments Corporation of India (NPCI) said.

The umbrella organisation for all retail payments system in India also said Facebook and WhatsApp too are in discussion with it, regarding rolling out of their UPI payment services.

Source: BloombergQuint