9 Feb 2016

Private players may reap Rs 1.5 lakh crore revenue bonanza from BharatNet by 2020

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Private sector players could be in for a Rs 1.5 lakh crore revenue bonanza by 2020 if the government accepts the telecom regulator’s proposals on implementing the national broadband project, BharatNet. They, however, are sceptical about potential challenges over right of way (RoW) to lay cables and want these to be ironed out by the Department of Telecommunications (DoT) to ensure their active participation.

“If Trai’s (Telecom Regulatory Authority of India) recommendations are implemented, and the government ensures free RoW to private sector participants, as suggested by the telecom regulator, the revenue potential from broadband services could attain very significant levels by 2020, and be in the Rs 1-1.5 lakh crore range,” Broadband India Forum (BIF) president TV Ramachandran told ET. This estimate though could very easily be exceeded, given the huge potential these services have, said Ramachandran.

The BIF represents companies such as Airtel, Vodafone, Telenor, RCom, Qualcomm, Ericsson, Intel, Marvell, UTStarcom and BSNL. Hemant Joshi, partner at Deloitte, Haskins & Sells, agreed that the revenue potential could be staggering if RoW can be done away with, since it is the biggest hurdle and the costliest part of laying optical fibre across India.

“If the RoW challenge is addressed, BharatNet as India’s principal broadband backbone, can be a potential GDP multiplier, equivalent to 2-4 times the $18 billion that is proposed to be invested in the Digital India project,” said Joshi. This, he said, effectively means BharatNet can be a trigger for adding between $36 billion and $72 billion to India’s GDP in coming years, although the pace of the multiplier effect would hinge on the speed of national broadband network rollout.

In its recent recommendations on speeding up the Rs 74,000 crore BharatNet project, Trai had listed RoW as a factor considered to be a major risk by the private sector, and had urged DoT to pave the way for “a guaranteed provision of free RoW as a necessary and non-negotiable precondition for successful deployment of the national broadband project”.

Bharat-Net is being implemented as the main high-speed Internet backbone for delivering government services to the common man under Digital India initiative. Search giant Google, which had evinced interest in providing inexpensive Internet access across India, called for steps to boost broadband speeds of existing consumers.

Source:  Economic Times

6 Feb 2016

I-T Dept cautions on sharing PINs

by | posted in: Corporate Updates, Income Tax,e-Filing- Individuals, Firms, Companies | 0

The Income-Tax Department today cautioned taxpayers not to share their PIN or password of mails saying it never ask for such details.

In a statement, the department said it is to ensure that taxpayers are aware the department does not seek confidential or financial information of the taxpayer over email.

“The Income Tax Department never asks for your PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts through e-mail,” it said.

“The Income Tax Department appeals to taxpayers not to respond to such emails and NOT to share information relating to their credit card, bank and other financial accounts,” it added.

The Income-Tax Department has been at the forefront of using technology in implementing its e-governance initiatives, it said, adding, most of its routine communication to taxpayers is through email and SMS.

Source: http://www.thehindubusinessline.com/economy/policy/it-dept-cautions-on-sharing-pins/article8198981.ece

6 Feb 2016

CBDT lays down norms for e-assessments

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CBDTThe Central Board of Direct Taxes (CBDT) has laid down operational guidelines for e-assessments of select non-corporate taxpayers to be undertaken as a pilot in five metros.

 

It has now specified the format and standards for ensuring secured transmission of electronic communication between the taxpayer and the Income-Tax Department.

 

The move comes three months after the CBDT announced its intent use ‘electronic mail’-based communication for assessment.

 

It had then announced that a pilot project would be launched in five “non-corporate charges” at Delhi, Mumbai, Bengaluru, Ahmedabad and Chennai.

 

Non-corporate charges

 

Non-corporate charges are those dealing with assessments of individuals, Hindu Undivided Families and partnerships.

 

Initially, 100 cases would be identified for e-hearing in each of these five regions and a major part of the assessment would be done electronically, the CBDT had then decided. Only cases taken up for scrutiny were to be covered under the pilot.

 

Commenting on the move, Aseem Chawla, Partner, MPC Legal, a law firm, said: “If this IT-enabled exercise does succeed, it would usher in a new era in taxpayers’ interaction with tax department in making the process, simpler, economical and hassle-free.”

 

Amit Maheshwari, Partner, Ashok Maheshwary & Associates, a CA firm, said, “The guidelines allay various concerns of the taxpayers on the scheme and once it’s successful would enable quick percolation across the entire tax department and make it a standard practice. One good move is that the communication status would be displayed to the taxpayer in their online account.

 

“This would prevent missed dates, miscommunications and effective follow-ups.”

 

Vikas Vasal, Partner –Tax, KPMG in India, said the Centre has clarified the procedural aspects of usage of electronic communication regarding paperless assessment proceedings.

 

Saving time

 

“Gradually, the aim is to move most of the communication to the electronic format.

 

“Once done, it would save time and effort both for the tax payers and the tax department.

 

“Also, it would bring in more transparency and consistency in tax positions” .

 

A number of tax simplification measures have been announced by the government recently and more are expected in the forthcoming Union Budget, he added.

 

“If this IT-enabled exercise does succeed, it would usher in a new era in taxpayers’ interaction with the department in making the process, simpler, economical and hassle free”.

 

Source: http://www.thehindubusinessline.com/todays-paper/tp-news/cbdt-lays-down-norms-for-eassessments/article8200085.ece

6 Feb 2016

Hong Kong eyes strengthening business ties with India

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0

Pushing for an investment promotion agreement, Hong Kong today called for strengthening business ties with India and boosting bilateral trade.

“India is Hong Kong’s seventh-largest trading partner globally, with bilateral trade of USD 23.7 billion last year. We are looking at strengthening business ties with India and increase trade manifold,” Hong Kong Trade Development Council (HKTDC) Executive Director Margaret Fong told reporters here.

Hong Kong and India enjoy strong ties formed over more than 150 years of business and cultural links, Fong said.

In 2015, India was Hong Kong’s fourth-largest export market with shipments expanding 8.1 per cent y-o-y to USD 13.1 billion.

On the other hand, India was Hong Kong’s ninth-largest source of imports in 2015, amounting to USD 10.6 billion, said Fong, who is leading a business delegation to India.

HKTDC, the global marketing arm for Hong Kong-based manufacturers, traders and service providers, has a proven track record in helping Indian businesses expand into new markets using the special administrative region’s platform, Fong added.

“With India’s tremendous economic potential, trade and investment between Hong Kong and India are expected to expand continuously in the coming years.

“The Investment Promotion and Protection Agreement (IPPA) will further strengthen the economic and investment ties between the two places, bringing mutual economic benefits,” Hong Kong Special Administration Region Chief Executive C Y Leung said in a statement.

“Hong Kong and India will launch negotiations on an IPPA,” Leung added.

Many Indian companies have established offices in Hong Kong. As of June 2015, there were 12 Indian companies with regional headquarters in Hong Kong, 15 with regional and 37 with local offices. The ranges of businesses include trading, banking, IT and logistics.

Leading Indian companies with operations in Hong Kong include Bank of India, UCO Bank, Jet Airways, Infosys and Tata Group.

Source:http://economictimes.indiatimes.com/articleshow/50856674.cms

4 Feb 2016

RBI proposes easier access to foreign capital for start-ups

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The Reserve Bank of India (RBI), in its sixth bi-monthly monetary policy statement, has proposed steps to improve ease of doing business for start-ups through easier access to foreign capital and by enabling smoother transfer of ownership. RBI Governor Raghuram Rajan said the central bank wants to simplify the process and will create an enabling framework for attracting foreign venture capital (VC).

“We are supporting the start-up process by making it easier to raise (capital), often from abroad, but also simplify the compliance with regulations, including putting forms online,” Rajan said during the post-policy press conference on Tuesday.

For easing cross-border transactions, RBI has proposed (in consultation with the government of India) that in case of transfer of ownership of a start-up, permitting receipt of the consideration amount on a deferred basis could be done. It has also proposed to enable escrow arrangement or indemnity arrangement up to a period of 18 months.

In addition, RBI has also proposed (in consultation with the government) to permit start-ups access to rupee loans under the external commercial borrowings framework with relaxations of eligible lenders. It is also looking at issuing innovative foreign direct investment (FDI) instruments like convertible notes by start-ups. Further, RBI is looking into the proposal of issuing shares without cash payment through sweat equity or against any legitimate payment owed by the company, the remittance of which does not require any permission under the Foreign Exchange Management Act (Fema).

Harish H V, partner, Grant Thornton India LLP, said these measures are for helping start-ups in their operations and fundraising. “We look forward to further relaxations around convertible notes as promised. These steps, together with the start-up action plan and more initiatives expected from the ministry of corporate affairs and the Budget, should help the cause of the Stay In India and creating value in India… Every step counts,” he said.

RBI said the aim was to enable start-ups, irrespective of the sector, to receive foreign VC investment and also enable transfer of shares from foreign VC investors to other residents or non-residents.

The central bank has also proposed simplifying the process for dealing with delayed reporting of FDI-related transactions by building a penalty structure into the regulations. The notifications/circulars under Fema, wherever necessary, will be issued shortly.

The regulator said electronic reporting of investment and subsequent transactions will be made on the e-Biz platform only. Here, submission of physical forms will be discontinued with effect from February 8.

Source: http://www.business-standard.com/article/finance/rbi-proposes-easier-access-to-foreign-capital-for-start-ups-116020200565_1.html

2 Feb 2016

Bank of Baroda scam: RBI tells banks to conduct internal audit

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All public sector and private banks have been asked by the Reserve Bank of India to conduct a “thorough internal audit” and put the report before their respective audit committees, as part of the central bank’s efforts to check fraudulent foreign exchange transactions. The move comes in the wake of irregularities that came to light last year in Rs 6,100-crore import remittances effected by Bank of Baroda’s Ashok Vihar branch in New Delhi.

A circular has been issued to all scheduled commercial banks, advising them to conduct a thorough internal audit and place the report before audit committee of the board of the respective banks and to forward the summary of findings to RBI, the central bank said in reply to an RTI query filed by PTI. The RBI was asked to provide details of action being taken by it to check fraudulent forex transactions by banks. “We are in the process of receiving the internal audit report from various banks,”it said.

The RBI has asked Bank of Baroda to conduct a bank-wide review of the outward remittances to rule out similar wrong doings at other domestic branches and submit a report thereof to it. The bank has since completed the internal audit and placed the report before its audit committee for directions. The Bank of Baroda has also selected a consultant to review its Know Your Customer (KYC), Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) policy and practices, to set up robust systems, the central bank said.

“They have also framed a policy for advance import remittance which covers system check points like cooling period of six months in respect of newly opened account, multiple transactions in a day for $100,000 and below, etc,” the RBI said.

Both the Central Bureau of Investigation and Enforcement Directorate (ED) are probing remittances of Rs 6,100 crore to Hong Kong from the Bank of Baroda’s Ashok Vihar branch.

The huge transaction is believed to be trade-based money laundering as the amount was transferred in the garb of payments for imports that never took place, investigators say.

Source: http://www.business-standard.com/article/pti-stories/bob-forex-scam-rbi-tells-all-banks-to-conduct-internal-audit-116013100149_1.html

2 Feb 2016

Foreign firms rush to India’s online marketplace

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India’s booming online marketplace business has attracted a new wave of merchants and sellers from countries such as China, South Korea, Japan, Singapore and the US. In fact, thousands of sellers are getting into tie-ups with Indian e-commerce players to kick-start operations in the country.

 

According to industry insiders, around 50,000 sellers from China, South Korea and Singapore are planning to enter India through online marketplace players.

 

“In business-to-business (B2B) segment, there is no online organised player in the country right now. The market is being created for the online businesses,” said Sanjay Sethi, co-founder and CEO of Shopclues. The company has brought in DHgate, the second largest player in China after Alibaba, on to its platform. It’s also getting 25,000 South Korean merchants on board. Tie-ups are also in process with Singapore Traders Association to enable them to sell on Shopclues.

 

American retail major Walmart is also exploring ways to tie up with leading e-commerce companies in India, including Flipkart, Snapdeal, ShopClues, Grofers and Bigbasket. It is learnt that German wholesale giant Metro Cash and Carry is also in talks with e-commerce marketplace players to sell its products online.

 

Meanwhile, e-commerce giant Alibaba is looking to make a big bang entry into India’s marketplace via One97 Communications-owned Paytm.

 

Alibaba is expected to be the support behind Paytm’s China product portfolio. With that in place, Paytm will aim to become the biggest Indian player insofar as the number of sellers on the platform is concerned. With eight million sellers, Alibaba has the widest seller range as well as product portfolio.

 

This is not for the first time that Paytm is planning to sell Alibaba’s product range. During Diwali last year, Paytm had the whole product catalogue sourced from Alibaba and merchants from China were directly shipping products to customers in India, saving Paytm the hassle of finding warehouses.

 

As for the second top player in China, DHgate, online B2B would be a gateway into India and an opportunity to get connected to 350,000 sellers through the Shopclues portal.

 

DHgate plans to list its products across categories, including electronics, accessories, beauty products and sports. “From China we are getting around 10,000 SKUs (stock keeping units) listed. It is not a retail business and the target audience for this business are other businesses in India,” said Sethi.

 

The foreign investment rules vary across retail platforms and companies often resort to complex structuring to bypass policy. While foreign direct investment (FDI) is capped at 51 per cent in multi-brand retail with states having the last say on whether international players would be permitted to operate or not, there’s no limit of foreign investment in single-brand and business-to-business or cash and carry.

 

In e-commerce, however, FDI is not permitted. But, e-commerce players are mostly run with foreign money by operating marketplace platforms, where rules have not been framed yet.

Source: http://www.business-standard.com/article/companies/foreign-firms-rush-to-india-s-online-marketplace-116020100015_1.html