TIMES BUSINESS
US TREASURY UNVEILS BLUEPRINT FOR
Over 40% business entities
make zero GST payment
Little More Than 10,000 Paid Two-Thirds Tax In July: Govt
Sidhartha@timesgroup.com
New Delhi: There may be noi-
se over heavy tax burden on
small businesses but initial da-
ta does not support the compla-
int. It turns out that over 40% of
the 54 lakh businesses which fi-
led GST returns in July clai-
med ‘nil’ tax liability and paid
no tax. This means that around
22 lakh did not pay even one ru-
pee GST.
Of the remaining 60% or 32
lakh businesses that filed re-
turns on the GST Network
(GSTN), the IT backbone for
the indirect tax, many did not
have a cash liability as they op-
ted to use the credits available
for service tax or excise that
they had paid before GST kick-
ed in on July 1. Data available
with the government showed
that apart from those with
“nil” returns, close to 70% of
the 32 lakh businesses which
had a tax liability paid anywhe-
re between Re 1and Rs 33,000 in
Ola raises $400m from Tencent
Digbijay.Mishra
@timesgroup.com
Bengaluru: Chinese inter-
net major Tencent will invest
$400 million (Rs 2,580 crore)
in ride-hailing startup Ola, as
per the latest documents filed
with the Registrar of Compa-
nies (RoC). The capital from
Tencent will give a lot of fire
power to Ola in its battle
against Uber, and will also al-
low it to reduce Japanese in-
ternet conglomerate Soft-
Bank's dominance in the
company.
Ola said in a special reso-
lution, filed with RoC, that it
will issue 19,08,143 shares to
Copper Technology, through
which Tencent is investing in
Ola, at a premium of Rs 13,521.
THE TIMES OF INDIA, BENGALURU | SATURDAY, OCTOBER 7, 2017
GOVT TO REDUCE NUMBER OF PSBS TO 10-15 VIA
SWEEPING REFORMS OF CAPITAL MARKETS
HOW IT ADDS UP
Tax paid (in ) % of taxpayer % of taxes
1-33,000 69.5 2.0
33001-66,000 11.1 1.8
66,001-1 lakh 5.2 1.4
1-5 lakh 10.5 7.5
5-10 lakh 1.7
3.9
10-30 lakh 1.2 7.1
30 lakh to 1 cr 0.5 9.8
Over 1 cr 0.3
66.5
Source: Govt data
taxes. from excise, VAT and service
In contrast, just around tax, while 25-26 lakh new taxpa-
0.3%, which is a little over yers have been added, finance
10,000 companies accounted for minister Arun Jaitley said on
almost two-thirds of the GST Friday. He also said that aro-
mopped up by the government und 94-95% of the collection is
in July. The government had from large assessees or those
said that it had mopped up aro- with a turnover of over Rs 1.5
und Rs 94,000 crore during July. crore, who make up around
Currently close to 1 crore 10% of the registered base of
businesses and service provi- taxpayers.
ders are registered with GSTN, “Everyone is simply see-
of which 72 lakh had migrated king exemptions but most are
The capital from Tencent will give
a lot of fire power to Ola in its
battle against Uber, and will also
allow it to reduce Japanese
internet conglomerate SoftBank's
dominance in the company
TOI first reported in its chase request of Copper
July 27 edition that Tencent, Technology in ANI Technolo-
the parent company of pop- gies, which runs Ola.
ular messaging platform We- With this funding, the to-
Chat, was finalising an in- tal funds Ola has raised in
vestment in Ola. this round has touched about
Tencent has also backed $800 million. This includes
internet ventures Flipkart, the approximately $250 mil-
Hike and Practo. On Septem- lion from investors like Fal-
ber 20, the Competition Com- con Edge, an existing inves-
mission of India (CCI) had tor, Rata Tata's RNT Capital
mentioned in a tweet that it Advisors, and Tekne Capital
had approved the share pur- Management, a hedge fund.
not paying taxes,” said an offi-
cial. The government’s move to
usher in GST has faced criti-
cism with political parties bla-
ming poor implementation for
the problems being faced by bu-
sinesses. The government,
while fixing the problems has
said that a part of the reason
for the criticism is due to the
fact that many entities which
were earlier out of the net or
evading taxes are now being
forced to pay up.
Although tax collections
are lower from a majority of
the taxpayers, the government
is hoping that GST will help wi-
den the base and create space
in the future to reduce tax rate.
Jaitley said at Friday’s meeting
that GST Council also decided
on how rates will be tweaked in
the future. “As revenue increa-
ses, and depending on the reve-
nue neutrality situation in the
future, rates will be tailored ac-
cording to the concept paper
(that was cleared),” he said.
When contacted, an Ola
spokesperson declined to
comment on the matter.
Tencent comes into Ola at
a time when Ola's largest in-
vestor SoftBank is in the final
stages of investing in Uber,
which competes with Ola in
India. Industry experts see
this as SoftBank CEO Ma-
sayoshi Son's effort to hedge
his bets in the dynamic on-
line cab hailing space across
the globe.
Tencent's cheque is said to
value Ola at close to $4 billion.
This is higher than in the
immediately preceding
rounds, when valuations
were at $3.5 billion and $3 bil-
lion, but still lower than the
peak valuation of almost $5
billion in 2015.
CONSOLIDATION: FINMIN ADVISER SANJEEV SANYAL
Founders, firm
were accused
of siphoning
off money
Continued from page 1
S Merchant, Says MasterCard CEO Banga
napdeal held 49% stake in
GoJavas and the founders
of the company had sold
it to Rai in a fire sale.
“I’ve sent them a legal no-
tice worth Rs 300 crore for
criminal breach of trust
against GoJavas which result-
ed in erosion of value of
Quickdel,” Rai said.
The notice, reviewed by
TOI, accuses the founders and
the company of criminal
breach of trust and siphoning
off money from GoJavas to
Vulcan Express, the in-house
logistics firm of Snapdeal.
Quickdel’s notice comes
after Jasper Infotech filed a
first information report (FIR)
with the Delhi Police against
the former promoters and di-
rectors of Quickdel — Pra-
veen Sinha, Randhir Singh,
Ashish Chaudhary and Abhi-
jeet Singh.
The four are accused of
cheating, forgery, criminal
breach of trust, conspiracy
and criminal misappropri-
ation of funds. The complaint
said Snapdeal was “induced”
to buy shares in Quickdel.
The timing of Snapdeal’s
complaint was interesting,
coming as it did when it was in
the middle of merger talks
with rival Flipkart.
When contacted, a Snap-
deal spokesperson termed
Quickdel’s allegations as
baseless. The spokesperson
also said it is in direct contra-
diction of the ‘Release and
Settlement Agreement’ exe-
cuted by Rai and Quickdel on
March 31.
This agreement, he said,
had completely released Jas-
per Infotech, Jasper Group
and its officers, employees,
nominees, directors and oth-
ers from all liabilities / conse-
quences arising out of the
share purchase agreement,
share acquisition & sharehol-
ders' agreement, and master
logistics services agreement.
‘Digitisation can’t
be imposed by fiat’
Have To Incentivise Both Customer And
Mayur.Shetty
@timesgroup.com
I
n the eight years since
Ajay Banga took charge
as the first Indian presi-
dent and CEO of Master-
Card, the company has re-
corded average growth in
double digits and seen its
market capitalisation go
from $20 billion to $150 bil-
lion. The company has in-
vested in acquisitions in In-
dia which now accounts for
14% of its workforce.
What impact do you see of
demonetisation in India?
We saw huge growth in
transactions immediately
after demonetisation. While
cash has now come back and
growth has slowed, transac-
tions are still 2x-3x of what it
used to be. But even at 2x le-
vels, cash is a substantial
part of the economy. It is re-
ally hard for a guy who stays
overseas to make a comment
on the implementation. I ha-
ve seen photographs of the
queues — even my mother
had trouble at that time. I am
not trying to ignore the pain
of people or the challenges
faced by businesses but from
my point of view this reform
is one of the better things go-
ing. All reform, by the natu-
re of the word, is disruptive.
How do you see the
implementation of GST
and its impact?
To expect things to settle in
two months is something I
don’t understand. Having
worked in Nestle I know how
long it takes from the time of
input purchase until the
consumer GST is realised. It
is a six-to-nine-month pe-
riod, taking into account the
transport time and invento-
ry holding at company, dis-
tributor and wholesaler le- vestments in India — both
vel. Once the flow is comple- organic and inorganic. A lot
te it won’t happen again. of our acquisitions are in
With GST the merchant has areas like artificial intelli-
no incentive not to issue a gence, analytics, processing
bill and will therefore be mo- and loyalty. We helped UI-
re willing to accept cards. DAI develop a method to use
biometrics to authenticate
Will digitisation and GST transactions. We have put it
lead to growth? onto our core system where
GST and digitisation are on- it reaches 200 countries so I
ly one aspect of it. Today get economies of scale.
80% of the workforce outsi-
de agriculture is in the infor- How do you see the move
mal sector, which does not towards digital currency?
provide any skilling or soci- If the government creates di-
al security benefits and the- gital currency, we will find a
refore there is no increase in way to be in the game. We will
Until 2020, we intend to
make $700-800 million
of investments in India — both
organic and inorganic. A lot of
our acquisitions are in areas like
artificial intelligence, analytics,
processing and loyalty
AJAY BANGA | CEO, MASTERCARD
productivity. We have the provide rails for moving cur-
growth in labour but not in rency from customer to mer-
productivity — which has to chant. The government man-
change. This can happen by dated digital currencies are
growing the formal sector interesting. Non-govern-
through manufacturing and ment mandated currency is
tourism where India has po- junk.
tential and can create jobs.
How long do you think
There is also the question cards will continue as a
of who pays for digital form factor for payment?
transactions? Will cards move to phone?
If you want digitisation — I am not in the card business,
whether it is card, phone or I am in the payment techno-
fingerprint — you cannot logy and data infrastructure
get that by a fiat. You have to business and the card is a re-
encourage and incentivise ally good way of delivering it.
both the customer and the The physical-digital con-
merchant. vergence is going to be driven
by the internet of things.
What are your I think cash and cards will
investment/acquisition continue to exist even if pho-
plans for India? ne, fingerprints or even un-
Until 2020, we intend to ma- der skin chip implants come
ke $700-800 million of in- in as options.