Government may soon come up with indirect tax treatment of crypto assets
There could soon be clarity on applying goods and services tax on virtual digital assets, as the Central Board of Indirect Taxes and Customs is working on an agenda paper on the topic. The board has been interacting with industry to decide on the GST rate for crypto assets and identify whether they should be classified as goods or a service, besides related issues. The board’s agenda paper will likely be presented to the fitment panel of GST and then to the GST Council.
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Why it’s important: Clarity on tax treatment is expected to offer some relief to the crypto industry, which has been concerned about tax notices seeking GST on the gross value of the crypto asset instead of the service fees or commission. Clarity is expected on all critical aspects of the sector.
Reliance, Adani and 13 others in race to take over bankrupt Future Retail
The Adani group and Reliance Industries are among the 15 entities to have submitted expressions of interest to acquire the assets of bankrupt Future Retail. April Moon Retail, a JV between Adani Airport Holdings and promoters of Flemingo group, Reliance Retail Ventures, and Dharampal Satyapal are among the suitors. Capri Global Holdings, Nalwa Steel and Power, Shalimar Corporation, UV Multiple Asset Investment Trust’s Special Situation Fund, and United Biotech had also sent in their EoIs by November 3.
Why it’s important: A legal tussle between Reliance and Amazon over the assets of Future group left lenders scrambling to recover their dues. Future Retail’s fixed assets now largely consist of furniture and fixtures and leasehold improvements at its 302 leased stores.
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Deadline for 30 percent volume ceiling to be extended for leading UPI apps
The deadline for 30 percent volume cap norm on existing third-party application providers for UPI might be extended by the National Payments Corporation of India. The move will benefit PhonePe and Google Pay. PhonePe processed over 47.26 per cent of the transactions done through the UPI in October, and Google Pay processed about 34 per cent of the UPI transactions, according to NCPI data.
Why it’s important: The ceiling norms are expected to disrupt the UPI ecosystem in the short run. An extension is being considered because the corporation wants to preserve the rapid growth of its flagship UPI payments platform.
Persistently high inflation drags down rural sales in September quarter
The FMCG sector continued to report a fall in rural sales, as those less well-off in villages felt the pinch of persistently high inflation. Sales in rural markets declined for the fifth consecutive quarter in the three months ended September, market researcher NielsenIQ has said. Sales volume declined at a faster 3.6 per cent rate in the September quarter compared with 2.4 per cent decline in the March quarter. Demand in urban markets continued to report a positive trend.
Why it’s important: Rural households are more vulnerable to inflation. The rural poor have cut down on expenditure for basic items like soaps and detergents as they have little left after spending on food and shelter and the rising prices of FMCG goods.
SIP investment hit new record in October although mutual fund inflows fell
Flows into systematic investment plans surged to a monthly record in October. SIP flows rose to a new high of Rs 13,041 crore, compared with September’s Rs 12,976 crore. Flows in equity schemes slipped to Rs 9,390 crore, compared with Rs 14,100 crore in the preceding month, according to the Association of Mutual Funds in India. Average assets under management fell marginally to Rs 39.53 lakh crore compared with Rs 39.88 lakh crore in September.
Why it’s important: The steady increase in SIP investments indicates the undiminished appeal for long-term growth assets despite reduced potential upside for stocks after the recent climb in the indices.
Crisis deepens at cryptocurrency exchange FTX, which is headed towards bankruptcy
The crisis at Sam Bankman-Fried’s FTX.com is worsening rapidly, with the onetime crypto wizkid warning of bankruptcy if his firm can’t secure funds to cover a shortfall of as much as $8 billion, shortly before rival exchange Binance scrapped a takeover offer. FTX.com needs $4 billion to remain solvent and is trying to raise rescue financing through debt, equity, or a combination of the two.
Why it’s important: The development is a stunning turn for Bankman-Fried, who was once worth $26 billion. It also underlines the uncertainty hanging over FTX, its clients and crypto markets as a whole.
Tata Play could opt for confidential pre-filing of IPO documents
Tata Play, previously known as Tata Sky, is set to become one of the first Indian firms to opt for confidential pre-filing of offer documents for an IPO in the next fortnight. The market regulator is expected to issue guidelines on confidential IPO prefiling in the next 7-10 days. Sebi has been looking to allow such filings and could have discussed the matter in its board meeting on September 30.
Why it’s important: Allowing pre-filing of IPO documents without a public announcement is expected to help safeguard sensitive business information of issuers. The Tata group firm is looking to raise Rs 2,000-2,500 crore.
Concerns rise on draft telecom law, industry bodies seek review
The draft Indian Telecommunication Bill 2022 will impose extensive permitting burden, hurt cross-border digital trade, hamper India’s economic growth, and constrain innovation, several industry bodies have said in a joint statement. The statement signed by App Association, Asia Internet Coalition, Computer and Communications Industry Association, Information Technology Industry Council, India Cellular and Electronics Association, among others recommended narrowing the broad definitions of telecom services and equipment.
Why it’s important: The draft legislation, which was up for public consultation till Thursday, aims to expand the definition of telecom services to include OTT communication services such as WhatsApp, and email providers like Gmail, requiring them to do KYC of users, adding to the compliance burden.
Offer price of Rs 170 a share too low for present times, says Fortis chairman
Even as IHH Healthcare Bhd is in talks discussions with the market regulator to proceed with its open offer for Fortis Healthcare and raise its stake over 51 per cent, the offer price could emerge as a sticking point, Kelvin Loh, CEO, IHH Healthcare, and Ravi Rajagopal, chairman, Fortis, said in an interview. From the four-year-old price of Rs 170 a share for the open offer, Fortis shares are currently trading at around Rs 280.
Why it’s important: The price was established in 2018, when there were specific regulations on how to arrive at that price. Fortis has done well since then and the offer prices is now deemed too low.
India seeks substantial increase in climate finance at UN summit in Egypt
Developing countries require substantive enhancement in climate finance from the floor of $100 billion per year to meet their goals, and rich countries need to lead the mobilization of resources, India has demaded at the ongoing UN climate summit in Egypt.
Why it’s important: Developing countries like India are pushing rich nations to agree to a new global climate finance target, which they say should be in trillions as the costs of addressing and adapting to climate change have expanded. Wealthy countries are unlikely to agree.
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