Factory activity picks up while business optimism falls. Air India, BPCL, ConCor disinvestments "unlikely" to be completed this fiscal. GST collection crosses ?1L cr for the second consecutive month. Tata Sons moves Supreme Court against NCLAT's decision to reinstate Cyrus Mistry as Executive Chairman of the Group. Reliance Jio may launch mutual funds, amongst other financial products.
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Mixed Signals: In December, India's factory activity expanded at its fastest pace in seven months, the Nikkei Manufacturing Purchasing Manager's Index showed.
The index rose to 52.7 last month, from November's 51.2. It was the highest reading since May and remained above the 50-mark that separates growth from contraction.
At the same time, though, business optimism about output over the coming 12 months fell to a three-year low. Reuters
The Art of Running Backwards: The strategic disinvestments in Air India, BPCL and Container Corporation are "unlikely" to be completed this fiscal, a senior government official has said, as reported by Financial Express. The process is reportedly facing delays due to "surprises" encountered. With the fiscal deficit already reaching 115% with four months to go and most of the government's disinvestment goals for this fiscal yet to be achieved, this does not bode well for fiscal arithmetic.
Two is Company: Gross Goods and Services Tax (GST) collections crossed the ?1L cr benchmark for the second consecutive month in December 2019.
A 9% year-on-year jump, the gross GST revenue collected in the month of December, 2019 rose to ?1,03,184cr. However, it was marginally lower than the ?1,03,492cr collected in November. HT
An Establishment is Forever: Startups in India push the government to define permanent establishment, in turn giving them a level playing field with global tech giants, which enjoy a tax advantage.
Permanent establishment is a concept in taxation that determines which jurisdiction has the right to tax a company’s revenue. The global tech giants have structured investment arms through a maze of subsidiaries held outside India in jurisdictions such as Singapore, Mauritius and Ireland, which means they pay about 10% tax on revenues, as per this report. Meanwhile, most Indian companies have to pay 35% tax. This, not only results in loss of direct tax for India, but also has a negative impact on local, home grown companies from a competition standpoint.
The companies said any global tech giant that has a million users, 100 paying customers or annual revenue of ?10cr locally should be considered as having a permanent establishment in India and taxed on par with domestic companies.
Error 404: Tata Sons has moved the Supreme Court against a December 18th NCLAT order restoring Cyrus Mistry as Executive Chairman of the Group, stating that the verdict had "undermined corporate democracy" and the "rights" of its Board of Directors. It was "completely inconsistent with the annals of corporate law" and reflected "non-appreciation of facts", which was "untenable in law". ToI
Sales Fall Apart: Tata Motors reported a 12% fall in total vehicle sales in the domestic market to 44,254 units in December 2019 vs sale of 50,440 units in the same month last year.
Tata Motors President (Passenger Vehicles Business Unit) Mayank Pareek said, "Our focus in December has been to drive retail and minimise the network stock in order to facilitate a smooth transition to BS-VI...Having almost completed our planned production and despatches of BS-IV, we will start moving to BS-VI production and despatches from January and step up our volumes in the coming months."
Total passenger vehicle sales for the period stood at 12,785 units compared to 14,260 units in the same month previous year, down 10%. Meanwhile, commercial vehicle sales in December stood at 34,082 units as against 40,015 units in the same period last year, down 15%. Moneycontrol
We'll Do it All...: As per sources, Reliance Jio might soon roll out financial products including mutual funds.
...Everything...: Reliance Jio’s digital payments platform, JioMoney, could be used to sell the mutual funds, which currently allows users to donate, send and receive money, in addition to paying bills and recharging mobile phones and DTH connections.
...On Our Own: A Reliance Jio official reportedly said that the company has been beta-testing its offering among employees for a few quarters now. Inc42
Setting Up Shop: Reliance Industries, in a bid to take on rivals such as Amazon and Walmart, as well as online grocery-specialists such as BigBasket and Grofers, on January 1st rolled out its new venture called JioMart, marketed as “Desh Ki Nayi Dukaan”.
The soft launch this week comes months after Mukesh Ambani said that he wants to service tens of millions of retailers and store owners across the country. If there is anyone in India who is positioned to compete with heavily backed Amazon and Walmart, it’s Ambani. Click here for the full scoop.
A Titanic Task: The global shipping just launched a major rejig - sulphur has been cut drastically from shipping fuels to reduce some forms of air pollution.
The new rules to use only fuel with low sulphur content were brought in by the International Maritime Organisation. The shift has been more than a decade in planning and will affect shipping around the world.
“Member states, the shipping industry and fuel oil suppliers have been working for the past three years to prepare for this major change – I am confident that the benefits will soon be felt and that implementation will be smooth,” said Kitack Lim, the secretary general of the IMO. “This [is a] hugely important change which will have significant positive benefits for human health and the environment.”
However, the new rules could increase transportation costs from $400 a tonne for fuel oil today to $600 a tonne. Besides increasing cargo shipping charges, this could also raise air travel charges. Guardian
Good to Know: In 2019, the number of deaths in major air crashes around the world fell by over 50%, as per the T070 consultancy.
Last year, 257 people died in eight fatal air accidents compared to 534 deaths in 13 accidents in 2018. The worst crash of 2019 involved the Ethiopian Airlines Boeing 737 MAX that killed 157. AP
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