1. As States Agree to Cap VAT on Natural Gas at 5%, Uniform Petroleum Tax May Not Remain a Distant Dream
States have agreed to cap value-added tax (VAT) on natural gas at 5 percent and lower it on other petroleum products such as petrol and diesel used by the manufacturing sector as an input. That could mark a significant breakthrough toward uniform nationwide prices of petroleum goods. The Goods and Services Tax (GST) Council will take up the scheme once it is formulated by the states.
“The council will take a final call on the proposal,” a senior government official told ET. “There have been discussions between the Centre and states at the officials’ level.” The council had previously discussed the issue and it was decided to ask the states to work out a scheme. Another government official said the ball was in the states’ court. Petroleum products aren’t covered under GST.
Source: Economic Times
2. India, Japan Ink Pacts Worth $17.4 Billion
The meeting between Indian Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe on Thursday paved the way for low-cost capital worth about Rs 1.1 lakh crore ($17.4 billion) over the next five to six years.
The projects backed by these investments are expected to be completed by 2023, said Norio Maruyama, press secretary of Japan’s foreign affairs ministry.
The two-day bilateral meet saw Japan extend soft loans to six projects for 50 years at a minimal interest rate of 0.1 percent.
Source: Bloomberg Quint
3. Union Govt Draws Master Plan to Catch Companies Evading GST Net
In its attempt to bring more companies under the goods and services tax (GST) umbrella, the tax department is planning to conduct searches and surveys across the country, a senior tax official told ET.
The searches could start as early as next week and would focus on checking if any company was deliberately avoiding to come under GST umbrella or if there is a genuine problem, said the official. Tax officers would conduct physical verification of premises in several areas and check the GST certificates in cases where they have been issued.
Source: Economic Times
4. Five Challenges in the Ahmedabad-Mumbai Bullet Train Project
It is indeed a great beginning for India that the ground-breaking for the construction of the first bullet train between Ahmedabad and Mumbai took place on 14 September at a function attended by Narendra Modi and Shinzo Abe, prime ministers of India and Japan respectively. Apart from being a major leap in infrastructure development in India, this project signifies the friendship and collaboration between the two countries.
The 534-km Rs1 trillion high-speed rail project that will operate trains with average speeds of 200-250kmph will be a game-changer in terms of inter-urban connectivity and establish India as a market for such technologies. Japan, which has matured in evolving such technologies and is seeking opportunities for investments, is providing a loan that would cover 80% of the estimated project cost at 0.5% interest, with a 15-year moratorium followed by a 35-year payback period. While it is of great value that we have both financial and technological support from Japan for building this line, there are multiple challenges that need to be overcome.
Source: Livemint
5. Wholesale Inflation in August Rises to 4-Month High, Courtesy Food, Fuel Prices
India’s wholesale inflation accelerated to a four-month high of 3.24% in August, in line with the trend in retail inflation on the back of rising food and fuel prices, strengthening the case for a pause on interest rates by the Reserve Bank of India (RBI) in its monetary policy review next month.
Data released by the department of industrial policy and promotion (DIPP) showed food inflation quickened to 5.75% in August from 2.15% a month ago, as onion prices rose by 88.5%. Inflation in manufactured items picked up 2.45% in August from 2.18% a month ago.
Fuel inflation rose by 10% as petrol and diesel prices continued to soar on rising crude oil prices and high central and state taxes. Fuel prices have risen to a three-year high. However, petroleum minister Dharmendra Pradhan has ruled out any interventions to check prices as diesel and petrol prices have been decontrolled.
Source: Livemint
6. Tata Sons Plans to Go Private Limited
In a notice to its shareholders ahead of the annual general meeting (AGM) scheduled for 21 September, Tata Sons has sought approval to amend its memorandum of association and articles of association to convert itself from a public limited company to a private limited one.
It has also sought to change the name of the company from Tata Sons Limited to Tata Sons Private Limited.
The change in Tata Sons’ corporate structure will require to be cleared by a special resolution, needing at least 75 percent votes.
Source: Business Standard
7. FMCG Sales See 12 per Cent Growth in Rural Markets, 7 per Cent Rise in Food and Beverages Category in July
Consumption of groceries and daily essentials picked up sharply in July, helped by pent-up demand from traders after orders had been slashed in June and blunted competition from unbranded products that struggled to reach retail shelves due to difficulties in goods and services tax (GST) compliance, especially in rural markets.
Fast-moving consumer goods (FMCG) sales by volume – or an actual number of products sold – rose 6 percent in July, faster than 2 percent a year ago, according to the latest data by Kantar Worldpanel, the consumer insights arm of WPP. This was mainly driven by 12 percent growth in rural areas and a 7 percent rise in the food and beverages category that has a significant chunk of unbranded players. A year ago, both segments grew 2 percent each.
Source: Economic Times
8. McDonald's-Bakshi Row: UK Panel for Fair Valuation of Joint Venture
An international arbitration panel has directed appointment of experts to determine a fair value of the joint venture between McDonald’s India and Vikram Bakshi, so that the US fast food chain can buy out its estranged partner.
The partners had resorted to arbitration after McDonald’s in November 2013 issued a notice to terminate partnership with Bakshi for setting up and operating its outlets in northern and eastern India.
A three-member arbitration tribunal on 12 September directed determination of a fair market value and purchase price of share of Vikram Bakshi and Bakshi Holding Pvt Ltd in Connaught Plaza Restaurants Ltd. for transfer to joint venture partner McDonald's India Pvt Ltd., persons familiar with the order said.
Source: Bloomberg Quint
9. Higher Metal Prices to Erode India Inc's Margins
The recent rise in metal prices in the international market could deal a double whammy to corporate India, which is struggling with poor volumes and revenue growth after demonetisation and the economic disruption caused by the roll-out of the goods and services tax in July.
Metal prices are up nearly 22 per cent on average during the year so far, pushing up manufacturing costs for Indian companies. The raw materials cost as a proportion of net sales is up around 50 basis points in the last two quarters and 230 basis points above the lows of the March 2015 quarter.
The combined revenue of domestic manufacturers was up only 3.3 per cent, year on year, during the 12 months ended June, growing at its slowest pace in nearly a decade.
Source: Business Standard
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