News Update, February 12th, 2018

Government measures to ensure MSMEs become growth engine

A slew of recent measures, including tax concessions in the budget, for micro, small and medium enterprises (MSMEs) has been taken with an aim to transform such enterprises worth Rs 6.33 crore into a growth engine for ‘new India’, a senior government official has said. These initiatives will bring down the tax burden on enterprises with an annual turnover of up to Rs 250 crore and also lower the interest burden, leaving more surpluses for investment and growth of the MSME sector which is the backbone of the country’s economy in terms of output, exports and employment generation.

Source: Economic Times

Alibaba plans on integrating BigBasket & XpressBees with Paytm Mall

Paytm Mall, in which Chinese internet giant Alibaba and its payments affiliate Ant Financial hold a majority stake, is chalking out tighter integration with players like online grocer BigBasket and logistics company XpressBees as they build out their ecosystem. Alibaba Group has recently invested in BigBasket, XpressBees and restaurant discovery and food delivery platform Zomato. Working with these companies will help Paytm Mall, which claims it will exit FY18 at a gross merchandise volume (GMV) run rate of $3 billion, target an ambitious $10 billion run rate by end of FY19.

Source: Economic Times

Income Tax panel refuses to stay Rs 110 crore tax demands on Flipkart

An income tax panel refused to stay a demand of Rs 110 crore on Flipkart, India’s largest online retailing platform, after it was asked to reclassify discounts and marketing spend as capital expenditure. This may have implications for rival Amazon, which faces a similar liability, and others. The Income Tax Appellate Tribunal (ITAT) in Bengaluru asked Flipkart to deposit Rs 55 crore and provide bank guarantees to the tune of Rs 55 crore by February 28.

Source: Economic Times

Bitcoin Finds a Bottom During Equity Market Turmoil

What’s supposed to be the most volatile asset in the universe is proving to be a bastion of stability compared with wild swings and carnage in global equities this week. Bitcoin clawed its way back from the four-month low of $5,922 it touched on Tuesday, rebounding 53 percent to $9,069. The S&P 500 Index and the Dow Jones Industrial Average both fell more than 5 percent this week, wiping out gains for the year. Emerging markets stocks and currencies also plunged, while shorter maturity U.S. Treasuries climbed as investors fled from risky assets to safe-havens.

Source: Bloomberg

Sebi now looks to curb benami deals

After its clampdown on shell companies, Sebi is turning its glare on ‘benami trading’. The market regulator is trying figure out ways to pull up perpetrators who indulge in insider trading and share price manipulation through ‘layering’ of fund flows. This is an age-old technique of moving money as loan from one company to the next — in a chain of nine to ten entities — before the last outfit receiving fund buys or sells shares.

Source: Economic Times

GST will aggravate India’s huge tax litigation problem

Litigation, said Ambrose Bierce, is a machine which you go into as a pig and come out of as a sausage. To get a sense of how many pigs are being turned into sausages in India, or how severe the problem of lawsuits can get, look no further than this year’s Economic Survey. It points out that more than 200,000 tax cases, amounting to nearly 4.7% of India’s gross domestic product (GDP), are stuck in appellate litigation across all levels of the judiciary. The introduction of a rather complex goods and services tax (GST) will aggravate the problem.

Source: LiveMint

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