QBiz: ‘No Delay in GST Rollout’, RBI Identifies 12 Defaulters

Your roundup of business news from across the country.

Arun Jaitley (Photo: Reuters)

1. Centre Nixes Speculation of Delay in GST Roll Out

The government has put an end to speculation that the rollout of the goods and services tax (GST) will be delayed, with revenue secretary Hasmukh Adhia and the Central Board of Excise and Customs (CBEC) saying the tax reform is on track for a July 1 launch.

Adhia tweeted: "The rumours about GST implementation being delayed are false. Please do not be misled by it (sic)." CBEC said, "Preparations are in full swing for a smooth implementation... from 1 July 2017."

The government has time and again reiterated its position that there will be no change in the deadline for the biggest indirect tax reform on 1 July. Finance minister Arun Jaitley last week said that there is no reason to further postpone its targeted rollout date on GST.

Source: Times of India

2. RBI Identifies 12 Defaulters for Insolvency Proceedings

The Reserve Bank of India (RBI) Tuesday sought to address potentially about a fourth of the Rs 10 lakh-crore non-performing assets (NPAs) on the books of local lenders, mandating that a dozen such accounts be taken to the bankruptcy courts. Although the RBI didn't name any defaulter, bankers say borrowers such as Bhushan Steel, Essar Steel, Lanco, and Alok Textiles may be the first set of companies facing proceedings under stringent recovery laws.

The IAC, in the meeting, agreed to focus on large stressed accounts at this stage and accordingly took up for consideration the accounts which were classified partly or wholly as non-performing from amongst the top 500 exposures in the banking system,” the RBI said in a statement issued late Tuesday.

Source: Economic Times

3. Reliance Jio Adds the Most Customers in April but Not All Are Active

Reliance Jio Infocomm Ltd may have added more subscribers than other telecom operators in April but data shows that the number of its active subscribers is way below the industry standard.

The Mukesh Ambani-backed operator added 38.7 lakh subscribers in April, its first month of paid services, according to data released by the Telecom Regulatory Authority of India. The newest operator's net subscriber additions were the most in the telecom industry followed by Bharti Airtel Ltd, which added 28.5 lakh, and state-owned Bharat Sanchar Nigam Ltd, that added 8.1 lakh customers.

However, only 71.1 percent of Jio's subscribers were active, TRAI’s data showed. Reliance Jio's active wireless subscribers were less than the industry average of 86.4 percent. The percentage of active subscribers of rivals Idea Cellular Ltd., Airtel and Vodafone India stood at 101.4 percent, 97.06 percent and 94.6 percent respectively.

Source: BloombergQuint

4. 4G Gear Imports Not out of Customs Coverage Area

The import of 4G equipment by Indian telecom firms won’t be exempt from customs duty with the government taking the view that it doesn’t fall within the purview of the global Information Technology Agreement (ITA), under which the country is bound to allow dutyfree imports of telecom and IT products.

The Central Board of Excise and Customs (CBEC) has clarified that the equipment wasn’t covered under the agreement signed in 1996. This follows a reference from the field regarding imports by Reliance Jio Infocomm including Base Transceiver Station and Base Station Controller equipment needed for its 4G cellular architecture.

Source: Economic Times

5. Garment Units in a Fix over Confusion in GST Rates on Job Work

Claiming that the the confusion over tax rates on job work on garments has not been addressed, the textile industry has knocked the doors of the Ministry, seeking a clarification on the issue.

At the 11 June meeting, the GST Council had said that services by way of job work on textile yarns (other than man-made and filament) and textile fabrics would be brought down to five percent from 18 percent

But the textile sector thinks that processes such as stitching, printing, embroidery might still attract 18 percent, not five percent. Their reason for their worry these processes come into play after the fabric is converted to a garment.

Source: Business Standard

6. Infosys Cites Activist Shareholders as Risk Factor in SEC Filing

Infosys has warned that the company’s performance and stock, in exchanges both in India and the US, could be affected because of actions of activist shareholders, hinting at the public interventions in the firm’s affairs by its founder NR Narayana Murthy.

Infosys also had warned of difficulties in executing its strategy if the management and board continued to spend time on responding to allegations against the company as it did over the past year, Infosys said in its 20-F filings to the US Securities and Exchange Commission on Tuesday.

Murthy, who had raised the red flag internally, went public over the past year with his concerns over the “dilution of disclosure norms” by Infosys, the main one being the severance pay made to its former Chief Financial Officer Rajiv Bansal.

Source: Business Standard

7. Air India's Long and Difficult Journey Towards Privatisation

When Colin Marsh Marshall arrived at British Airways Plc (BA) in 1983, he saw a bloated airline with a demoralised crew, flown for its bosses and sinking in its losses.

Those were the heydays of privatisation in Margaret Thatcher’s Britain. The sale of British Petroleum was under way, and British Telecom would be privatized in 1984. John King, chairman of BA, had hired Marshall as chief executive, and the brief was clear.

King fired around 22,000 BA workers, setting the path for Marshall. Over the next four years, Marshall overhauled the airline, changing its focus from staff to customers, raising productivity, cutting costs and checking losses. In 1987, the year it was privatised, BA made $284 million in profit. It remains one of the crown jewels of the success of privatisation. Thirty years hence and halfway across the globe flies Air India, another state-run airline deep in debt, backed by bailouts and beholden to bureaucrats, awaiting its Marshall Plan.

Source: Livemint

8. Amazon in Talks to Buy BigBasket

Amazon.m is in preliminary talks to buy the grocery site BigBasket, as the American company steps up efforts to gain ground in the country, according to people familiar with the matter.

The discussions are at an early stage and may not lead to a sale, the people said, asking not to be identified as the negotiations are private. BigBasket, run by SuperMarket Grocery Supplies Pvt, is India’s largest online grocer and operates in about 25 cities across the country.

A spokesman for BigBasket said that it’s untrue that Amazon is in talks to buy the firm. A representative for Amazon declined to comment.

Source: Livemint

9. Reliance Communications Said to Approach Citic for Sale of GCX Business

Billionaire Anil Ambani’s Reliance Communications Ltd has approached Citic Telecom International Holdings Ltd as it makes a fresh attempt to attract a buyer for its undersea cable unit, people with knowledge of the matter said.

Reliance Communications is reaching out to potential acquirers for the Global Cloud Xchange business, known as GCX, as the Indian carrier explores further asset divestments to pay down debt, according to the people. Hong Kong-based Citic Telecom, which has a market value of about $1.1 billion, hasn’t decided whether to proceed with an offer, the people said, asking not to be identified because the information is private.

Source: Livemint