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Wednesday, January 22, 2020

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


Govt won't be getting any cheque from Vodafone Idea today

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New Delhi: Vodafone Idea informed the Department of Telecommunications (DoT) it will wait for the Supreme Court's decision on the adjusted gross revenue (AGR) modification pleas, implying that it won't make any payments to the government by the January 23 deadline. Bharti Airtel is expected to follow suit. Both have filed modifications petitions in the Supreme Court, which will hear the matter next week."We have received a communication from Vodafone Idea which says the company is waiting for the Supreme Court decision on its plea (for) allowing it to negotiate with the DoT terms and timeline for payment of AGR dues before it takes any further steps on the matter," a senior government official told ET. "It is true that the apex court has agreed to hear the modification pleas of telcos and it hasn't categorically stated that the telcos need to deposit AGR dues or that they do not need to — it is technically a grey area."Vodafone Idea and Bharti Airtel didn't respond to queries.DoT will refrain from any coercive action such as issuing show-cause notices asking the phone companies why their permits shouldn't be cancelled, he said. The department will wait until January 24, a day after the deadline stipulated by the court in October, before it embarks on the next course of action, which could include seeking a legal opinion on the matter. "Or the government could just wait for the next court hearing and place the facts as they stand before the court," the official said.Rs 30,000 Cr Initial PaymentIt could inform the court that the telcos hadn't paid any dues and the department hadn't taken any action out of deference to the apex court decision on January 21 to hear the modification pleas.Vodafone Idea, Bharti Telecom and Tata Teleservices owe an aggregate Rs 1.02 lakh crore in AGR-related dues. The phone companies were said to be initially planning to pay some part of this by the deadline but then took the view that the apex court's decision to hear the modification petitions meant they could wait for its ruling on the matter.On Wednesday, the apex court agreed to hear next week the modification pleas filed by Bharti Airtel and Vodafone Idea to allow the telcos to negotiate with DoT on the conditions and payment schedules of the statutory dues. Last week, the court had rejected a review petition filed by the phone on the October verdict, which widened the definition of AGR, which telecom sector companies owed the government about Rs 1.47 lakh crore. The court also said the money had to be paid in three months, or by January 23. 73537905 The department, which had expected to collect up to Rs 30,000 crore from the affected telcos by that date as initial payment, is said to be considering its next course of action. As reported by ET on January 22, DoT was hoping to discuss terms and timelines for spreading the payment of statutory dues with the telecom operators once they paid a certain amount and before the next court hearing.Meanwhile, Reliance Jio Infocomm could well be the only operator to pay up its entire AGR dues of under Rs 200 crore, people close to the situation told ET.Vodafone Idea and Bharti Airtel face statutory dues of Rs 53,039 crore and Rs 35,586 crore, respectively, as per government disclosures to parliament. Tata Teleservices, which has sold its consumer mobility business to Bharti Airtel, faces dues of Rs 13,823 crore.Vodafone Idea had said in its modification plea that it will have to shut if there's no relaxation on payment terms."If a suitable and appropriate arrangement is not made available, it will lead to immediate closure of one of the oldest and largest telecom companies in India," according to the petition.

India's got a plan to avoid ugly tax disputes

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New Delhi: The government may adopt a mediation mechanism that will help companies determine their future tax liabilities and even settle disputes, said a person familiar with the development. The concept, which is widely prevalent overseas, is being discussed amid preparations for the February 1 budget, the person said.Mediation will allow taxpayers to get a fix on how much they need to pay and avoid disputes. "This will bring down litigation substantially," the person said.The mediation process involves examining tax legislation and all relevant facts in detail. Neutral mediators, chosen from a panel, will negotiate and arrive at a settlement. The decision is binding on both sides.The government could also look at expanding the Dispute Resolution Panel mechanism, which handles transfer pricing disputes, as an alternative, the person said. 73537706 Currently, the various Authorities for Advance Rulings take up issues from a technical standpoint and do not cover wider issues of law, hence the need for a broader framework. Besides, AAR decisions have not helped in containing litigation as most of these have been getting appealed both by taxpayers as well as the income tax department.The Companies Act had in 2016 provided for a formal mediation process to settle disputes relating to the law but such a formulation is not present in the Income Tax Act.The Direct Tax Task Force headed by former Central Board of Direct Taxes (CBDT) member Akhilesh Ranjan had suggested a mechanism to ascertain tax liability.Industry Pitched for Such a Mechanism"It is an established practice in some overseas tax jurisdictions to discuss and negotiate tax issues and disputes across the table between taxpayer and tax administration,with an earnest intent to resolve matters," said Vikas Vasal, national leader, tax, Grant Thornton.The Confederation of Indian Industry (CII) lobby group has pitched for a mediation mechanism in its pre-budget wish list. It has suggested that the government constitute a panel of experts comprising retired tax officials and experienced professionals to mediate."This process saves time and cost and helps in resolving many issues," said Vasal of Grant Thornton. "The government would also have to provide necessary protection to the revenue or independent authority acting as the mediator from unnecessary questioning and its decisions being challenged in future, to make such a scheme successful."The government has sought to partially address this demand in the past through Advance Pricing Agreements (APAs) for transfer-pricing cases or by the Mutual Agreement Procedure (MAP) involving a settlement between the competent authorities of the respective governments, said Rakesh Nangia, chairman, Nangia Andersen Consulting. "Still, the need is felt for a more comprehensive tax-mediation mechanism, where taxpayers can have a dialogue for settlement of their tax disputes in all types of cases."GLOBAL TEMPLATEThe US Internal Revenue Service has a voluntary mediation programme known as Fast Track, which helps resolve disputes in 40-120 days, much faster than the traditional appeals process. An independent mediator facilitates the settlement discussion and helps reach an agreement on the disputed issues. A key feature of Fast Track is that the taxpayer retains the right to traditional appeal if the dispute remains unresolved through the mediator.In the UK, Her Majesty's Revenue and Customs has introduced alternative dispute resolutions by way of mediation, which involves a trained officer acting as a neutral third party, without forming a view on what is right or wrong, to settle tax disputes.

Monthly GST return filing to be staggered

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NEW DELHI: The finance ministry on Wednesday staggered last dates of filling GSTR-3B, a monthly return form, and has provided three dates for different categories of taxpayers, a moved aimed at de-stressing the system.Currently, the last date for filing GSTR-3B is 20th of every month. From now onwards, there will three dates -- 20th, 22nd and 24th -- of every month for different categories of tax payers.In past, glitches in the return filing system of GST Network were reported on the last day of filing of returns and trade and industry had to face problems.It may be noted here that about one-fifth of the total GSTR-3B returns were filing on the last day (January 20)."From now on, the last date for filing of GSTR-3B for the taxpayers having annual turnover of Rs 5 crore and above in the previous financial year would be 20th of the month. Thus, around 8 lakh regular taxpayers would have the last date of GSTR-3B filing as 20th of every month without late fees," the ministry said in a statement.The taxpayers having annual turnover below Rs 5 crore in previous financial year will be divided further in two categories.The tax filers from 15 states/UTs -- Chhattisgarh, Madhya Pradesh, Gujarat, Daman and Diu, Dadra and Nagar Haveli, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Puducherry, Andaman and Nicobar Islands, Telangana and Andhra Pradesh -- will now be having the last date of filing GSTR-3B returns as 22nd of the month without late fees.This category would have around 49 lakh GSTR-3B filers who would now have 22nd of every month as their last date for filing GSTR-3B returns.For the remaining 46 lakh taxpayers from the 22 States/UTs of Jammu and Kashmir, Ladakh, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand and Odisha having annual turnover below Rs 5 crore in previous financial year the last date will be 24th.The ministry further said it has also taken a note of difficulties and concerns expressed by the taxpayers regarding filing of GSTR-3B and other returns."The matter has been discussed by the GSTN with Infosys, the Managed Service Provider, which has come out with above solution to de-stress the process as a temporary but immediate measure," it added.For further improving the performance of GSTN filing portal on permanent basis, several technological measures are being worked out with Infosys and will be in place by April 2020.A total of 65.65 lakh GSTR-3B forms for the tax month of December were filed by January 20.

Aadhaar-PAN linking deadline invalid: Gujarat HC

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As per Section 139AA of the Income Tax Act, every person who has been allotted PAN and who is eligible to obtain Aadhaar, shall intimate his Aadhaar number to the Income-tax department otherwise his PAN shall be inoperative. The deadline for linking of PAN and Aadhar had been extended several times and now the new deadline is March 31, 2020. So, if a person doesn't link his PAN with Aadhar by the said date, his PAN shall be inoperative. "However, it is to be noted that the validity of Aadhar Act is itself in question before the larger bench of the Supreme Court. The Hon'ble Supreme Court in case of Rojer Mathew v. South Indian Bank Ltd. 2019, has referred the issue of 'whether Aadhaar Act was rightly introduced as a 'Money Bill' for consideration by a Larger Bench.Thus considering the question of constitutional validity of Aadhar Act, the Gujarat High Court (in the case of Bandish Saurabh Soparkar v. Union of India 2020 (Gujarat)) has given relief to the taxpayers and provided that PAN not linked with Aadhar shall not be declared inoperative till the judgment of Supreme Court in aforesaid case is delivered and available", says chartered accountant Naveen Wadhwa, DGM, Taxmann.com.The Gujarat High Court judgement states :"PAN of applicant shall not be declared inoperative and applicant would not be in default in any proceedings only for reason that permanent account number is not linked with Aadhaar or Aadhaar number is not quoted and applicant shall not be subjected to proviso to sub-section (2) of section 139AA till judgment of Supreme Court in Rojer Mathew v. South Indian Bank Ltd. and others in Civil Application No. 8588 of 2019 is delivered and available"The judgement also states: "Upon an extensive examination of the matter, we notice that the majority in K.S. Puttaswamy (Aadhaar-5) pronounced the nature of the impugned enactment without first delineating the scope of Article 110(1) and principles for interpretation or the repercussions of such process. It is clear to us that the majority dictum in K.S. Puttaswamy (Aadhaar-5) did not substantially discuss the effect of the word 'only' in Article 110(1) and offers little guidance on the repercussions of a finding when some of the provisions of an enactment passed as a "Money Bill" do not conform to Article 110(1)(a) to (g). Its interpretation of the provisions of the Aadhaar Act was arguably liberal and the Court's satisfaction of the said provisions being incidental to Article 110(1)(a) to (f), it has been argued is not convincingly reasoned, as might not be in accord with the bicameral Parliamentary system envisaged under our constitutional scheme. Without expressing a firm and final opinion, it has to be observed that the analysis in K.S. Puttaswamy (Aadhaar-5) 59 makes its application difficult to the present case and raises a potential conflict between the judgements of coordinate Benches.""Given the various challenges made to the scope of judicial review and interpretative principles (or lack thereof) as adumbrated by the majority in K.S. Puttaswamy (Aadhaar-5) and the substantial precedential impact of its analysis of the Aadhaar Act, 2016, it becomes essential to determine its correctness. Being a Bench of equal strength as that in K.S. Puttaswamy (Aadhaar-5), we accordingly direct that this batch of matters be placed before Hon'ble the Chief Justice of India, on the administrative side, for consideration by a larger Bench."

Tata Motors unveils premium hatch, plans four more launches next fiscal

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MUMBAI: Having missed the podium in FY20, Tata Motors, the maker of Tiago and Nexon, has four new products lined up for the next financial year addressing a wide segment of Indian market, from Rs 5 lakh to Rs 25 lakh price spectrum, as the automaker looks to edge ahead of its Indian rival Mahindra & Mahindra.The company on Wednesday entered the 40,000-unit premium hatchback market with an all new Altroz to challenge Maruti Suzuki Baleno and Hyundai Elite i20. With this, the company expands its coverage to 70% of the Indian passenger vehicle market.Guenter Butschek, managing director of Tata Motors, told ET that the Altroz hatchback has potential to grab a double-digit market share in the segment and just like Nexon, the company's aspiration is to be on the podium within the hot hatchback segment."The Altroz is just the start. During the year there are many new segments we will be entering. The company will have possibly the newest and the most diversified portfolio across body styles and engines, addressing the most preferred segments of the market when compared to its nearest rivals in FY21. Led by these new launches, we want to break into podium," added Butschek."From small to big, from petrol to electric, we have it all for the next financial year. We are confident of outperforming the market and eventually gun towards a double-digit market share in the overall passenger vehicle space," he added.The gap between Mahindra and Tata Motors is a massive 50,000 units so far this fiscal year.

Ikea recalls 'Made in India' mugs due to excessive chemicals

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NEW DELHI: Ikea has recalled millions of 'Made in India' travel mugs from more than 400 stores across the world due to excessive levels of chemicals in the plastic product."There are no medical issues and this is purely a proactive initiative keeping the safety of our customers in mind," the Swedish furniture and home products retailer said on its website, urging consumers to stop using the Troligtvis-branded travel mugs immediately."Ikea risk and compliance team is looking into the details of what happened," an Ikea India spokesperson told ET, adding that it is a "pre-emptive measure" and "there are no medical issues or health hazards due to our product".73538856 A person familiar with the development said Ikea was prompted to recall the mugs a week ago after tests found excessive level of dibutyl phthalate (DBP), a substance that is used as plasticisers to enhance durability and flexibility of plastic products.The world's biggest furniture retailer is trying to figure out how the product escaped its stringent quality control process, the person said.The recall of Troligtvis mugs — priced ?129 apiece in India — comes less than four months after Ikea started selling the product all over the world in October 2019.Consumers who have brought the travel mug can return it to any store to get a full refund and no proof of purchase is required, the company said on its website. People who purchased the mug online, too, will get full refund. Ikea has given a toll free number in India where all consumers' queries will be answered.Ikea has been sourcing products out of India for 35 years and currently it sources rugs, textile, plastic, mattresses, sofas, and metal decorative items among host of other items from more than 600 suppliers in the country. It sources plastic products mainly from southern and western India.Ikea operates more than 400 stores in about 50 countries. It made its India debut by opening a 400,000 square feet outlet in Hyderabad in August 2018 and the world's largest single brand retailer currently sells its products online in Mumbai, Hyderabad and Pune.

Go in, don't wait for India to trade at a discount : Maldonado

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With portfolio and pension fund managers in the US under pressure to deliver returns, flows into emerging markets are set to increase. Moreover, now that the Indian economy has bottomed out, concerns over inflation are also much less. A stable currency and high forex reserves have created a nicely balanced economy, Bill Maldonado, global chief investment officer, equities at HSBC Global Asset Management told Prashant Mahesh. Edited excerpts:Donald Trump just signed an initial trade deal with China after nearly two years of fraught negotiations and a big trade war between US and China. How can this impact global trade? The phase-I deal between the two countries has just been signed. White House has said negotiations on phase II will begin immediately, which is a positive news. In 2019, investors realised the trade dispute was not economically as impactful as they feared it to be. There were all kind of predictions of its impact on the economy and those fears didn't materialise.Most of it was not a direct economic impact, but sentiment took a big hit. The impact was so much across the globe that even Indian corporates with good demand for their products and profitability were worried about this trade dispute and did not wish to invest and grow their business. As the year progressed, investors turned rational and realised the impact is not big. So, as of now investors are not discounting the worst outcome, but being more realistic.Are investors underestimating the geopolitical tensions between Iran and US. What could be the impact on oil? As of now, it looks like there is a deescalation and this is not going to be an issue. The big question for investors in these geopolitical macroevents is how economically meaningful they are going to be? Very few such event in the past have had economical consequences. From an oil price perspective, I believe the market is well balanced and there is lot of spare capacity in Saudi Arabia, Venezuala and Russia. Hence, a big problem of a sustained rise in oil price seems unlikely.The chances of a sustained rise in oil prices to a point that it will hurt global economy is very low. Economic growth is relatively subdued, oil market is balanced and there is capability in nations to step up production. Of all the things we have to worry about in the world, a sustained rise of oil price damaging global economy is not one a main concern. Of course, we have to continue to monitor the situation and we cant be complacent about it, but its unlikely it will be economically impactful.Given the geopolitical situation and trade wars, will there be a slowdown in flows to EMs?We are living in an age of uncertainty. There is more uncertainty today in the global economy than in the last 50 years. As an investor, I cannot invest in risk free assets as it gets negative yields. So, for me, safety assets are a no-go zone. Investors have to invest in risky assets but they are scared and going slow. They will invest in US credit and stocks as they feel that is safe. That is why we have not seen any real flows in emerging markets. India, however, has been unusual as we have seen higher FII flows. Going ahead, I think people will be more risk seeing than risk averse because of the returns they had in risk assets last year and most people who did not experience such returns missed out. Last year, they were scared to be in Asian or Indian credit. Now, they are looking at those returns. Portfolio managers and pension fund managers in the US are are under pressure as they have to deliver returns. Hence, we will see more flows into emerging markets this year. US economy will slow down a bit, but the rest of the world will catch up and somewhere it will cross. Logically, money will go out of developed markets and more into EMs such as Asia.US stocks have had an excellent decade? Will the winning streak continue this year?Yes, US markets have done extremely well and led the way, but that cannot continue forever. We believe that the rest of world will catch up and we will have a balanced picture going ahead.Growth in India has slowed down to less than 5%. Given this, is India attractive for global investors and are premium valuations for India justified?There is lot of scrutiny on corporate delivering earnings. However, India continues to look reasonably attractive to international investors. You have a market that has moved ahead of earnings, so in the next two years, we got to see earnings begin to come through. Earnings will come in initially more from financials, but that should broaden up and that will keep India looking attractive.The Indian economy is bottomed. You say growth is only 5% but for an outsider its very good. You have to look at the whole package. The worry about inflation is much less now, currency is stable, and forex reserves are high. I have a nicely balanced economy. India always has had premium valuations. If you wait for India to trade at a discount, you never will find an entry point for the country.What is one big risk according to you in this year that investors are ignoring?One risk people underestimate is inflation. Everybody assumes it's dead. I am not saying it will come back, but when everyone is discounting zero inflation, that is a risk. I will be vigilant around inflation.

Auto firms’ sales drop may ease in Q3, margins set to stay muted

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Mumbai: A sales uptick during the festive season will narrow the year-on-year decline in the revenues of automotive companies in the quarter ending December compared to the preceding quarters, but margins will remain under pressure due to high discounting.Revenue of automakers, excluding Tata Motors, is expected to decline in low single digits compared to last year, data collated from multiple research reports showed. This will be a significant improvement over the preceding quarter, when aggregate revenue of automakers registered a double-digit drop.Tata Motors is expected to show growth in revenue after six straight quarters of decline due to better financial performance from its subsidiary Jaguar Land Rover, which accounts for over three-quarters of the carmaker's consolidated revenue. The company is the country's largest carmaker by revenue.Net profit of automakers is expected to decline between 3% and 8%, again excluding Tata Motors."Whatever benefit came from softening of commodity prices will get offset by higher discounting," Bharat Gianani, auto analyst at Sharekhan, told ET.Bajaj Auto and Maruti Suzuki are expected to post a growth in profit. Bajaj Auto has a higher share of exports compared to its peers and a favourable exchange rate should aid profit growth, while Maruti Suzuki had better operating leverage and product-mix, according to a report from Reliance Securities.Another outperformer will be Exide, Gianani said, while Ashok Leyland, Apollo Tyres and Hero MotoCorp will be the laggards.Revenue of commercial vehicle makers, the worst-hit segment, as well as two-wheeler makers, is expected to decline between 36% and 77%, ICICI Securities forecast. Passenger vehicle makers' revenue change was predicted between a decline of 14% and growth of 1%.Analysts are also expecting a healthy pick-up in the earnings per share of the auto companies. According to Bloomberg consensus data, the average earnings per share (EPS) of the 15 participants of the Nifty Auto index is expected to grow by 51.9% over the next 12 months.Tata Motors' EPS is expected to grow 559% over this period on account of low base due to poor financial performance during preceding quarters and expected recovery in performance of the JLR unit.The expected returns over the next 12 months from nine of the 15 participants of the benchmark index, however, remain negative. The aggregate expected 12-month return from Nifty Auto companies is 2.9%, Bloomberg data showed.

Experts write to government on cyber fixes

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BENGALURU: Technology policy think tanks and digital freedom advocates have written to the National Security Council Secretariat urging stronger encryption requirements, improved breach disclosure norms and use of open-source software while encouraging free flow of data across borders, as part of suggestions to strengthen cyber security in India.Last year, the government said it planned to release a new Cybersecurity Strategy to keep up with the changing nature of technologies, platforms and threats. It asked for inputs by January 10 this year, seeking to tackle challenges including data privacy, law enforcement in evolving cyberspace, access to data stored overseas, misuse of social media platforms, international cooperation on cybercrime and cyber terrorism.Internet Freedom Foundation (IFF) said the policy should promote encryption, protect de-centralised internet, encourage robust data breach reporting mechanisms, prohibit the use of malware and reward the community of security researchers. Centre of Internet and Society (CIS) said the government must strengthen legal and technical security standards and allow for cross-border sharing of data by focusing on a solution to the Mutual Legal Assistance Treaty process.

Cabinet clears decks for more seafarer jobs

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NEW DELHI: The Cabinet on Wednesday approved the model memorandum of understanding (MoU) for unilateral or bilateral recognition of certificates of competency of seafarers, which will help Indian seafarers find opportunities on ships under the flag of other countries.The MoU has been approved pursuant to Regulation 1/10 of International Convention on Standards of Training, Certification and Watchkeeping (STCW) of Seafarers, 1978, to be signed between the Directorate General of Shipping and its counterparts in foreign countries, with the approval of the ministers of shipping and external affairs."The unilateral MoU would facilitate unilateral recognition by another country of the certificates issued by the Directorate General of Shipping to Indian seafarers, without seeking similar recognition by India of the certificates issued by that country," an official statement said.Indian seafarers will be eligible to be placed on ships under the flag of another country for employment, thus leading to increased employment opportunities, the government said. "The bilateral MoU would, therefore, make the seafarers of both countries eligible for employment on ships of either party, based on the certificates so recognised," it said.DAMAN TO BECOME TAXATION HQThe Cabinet also approved making Daman the headquarters of Dadra & Nagar Haveli and Daman & Diu regions for taxation purposes, which will lead to common taxation authorities for goods and services tax (GST), value added tax (VAT) and state excise for all three regions. The government amended various tax acts covering the three tax systems, which will lead to saving for the exchequer and ensuring uniformity, stability and consistency in day-to-day functioning of taxation authorities, the statement said.